BKSY

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 8:30 a.m. ET Vice President of Investor Relations - Aly Bonilla Chief Executive Officer - Brian O'Toole Chief Financial Officer - Henry Dubois Operator: Ladies and gentlemen, thank you for joining us and welcome to BlackSky Technology Second Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Aly Bonilla, Vice President of Investor Relations. Aly, please go ahead. Aly Bonilla: Good morning and thank you for joining us. Today I'm joined by our Chief Executive Officer, Brian O'Toole, and our Chief Financial Officer, Henry Dubois. On today's call, Brian will provide some highlights on the quarter and give a strategic update on the business. Henry will then review the company's financial results and outlook for 2026. Following our prepared remarks, we will open the line for your questions. A replay of this conference call will be available later today. Information to access the replay can be found in today's press release. Additionally, a webcast of this earnings call will be available in the Investor Relations section of our website at www.blacksky.com. In conjunction with today's call, we have posted a quarterly earnings presentation on the Investor Relations website that you may use to follow along with our prepared remarks. Before we begin, let me remind you that we will make forward-looking statements during today's conference call, including about our plans, objectives, and future outlook. Actual results may differ materially as these statements are based on our current expectations as of today and are subject to risks and uncertainties, including those stated in our Form 10-K and SEC filings. BlackSky assumes no obligation to update forward-looking statements except as may be required by applicable law. In addition, during today's call, we will refer to certain non-GAAP financial measures, including adjusted EBITDA and cash operating expenses. Definitions and reconciliations between our GAAP and non-GAAP results are included in our earnings press release and presentation, which are posted on our Investor Relations website. At this point, I'll turn the call over to Brian O'Toole. Brian? Brian O’Toole: Thanks, Aly, and good morning, everyone. Thank you for joining us on today's call. Beginning with slide 3, I'm happy to report that the second quarter delivered strong operating performance and growing business momentum. The exceptional performance of Gen-3 is driving increasing customer demand and strong sales growth across all aspects of our business. This quarter marked an important milestone as Gen-3 imagery services began to scale and accelerate significant top-line revenue and bottom-line earnings growth. We have now unlocked a phase of rapid growth driven by a growing backlog and strong visibility from multi-year subscription contracts for our high-margin space-based intelligence and AI services. We are well positioned to maintain this momentum and deliver a strong second half of the year, capturing new opportunities to continue this growth trajectory in 2027, which has us on a path towards sustainable, long-term profitable growth. Turning to slide 4. Behind our growing momentum is the success of Gen-3. Our Gen-3 satellites continue to exceed expectations and are consistently delivering exceptional 35-centimeter imaging performance. Our space-based intelligence and sovereign mission solutions are rapidly becoming an essential capability for major customers around the world at a time when real-time space-based intelligence is critical to national security imperatives. Now with over a year of on-orbit operating performance, Gen-3 is a proven best-in-class space vehicle delivering high-quality imagery, operational agility, and scalability at about 1/5 the cost of legacy platforms. We are successfully leveraging the superior technology, cost, and performance advantages of Gen-3 as a major differentiator, fueling TAM expansion opportunities and multiple growth vectors that span each of the elements of our business. First, the very high-resolution imagery from our Gen-3 constellation, combined with low latency delivery and real-time AI insights from our Spectra platform, is driving high-quality revenue growth in our space-based intelligence and AI subscription services. Second, the proven on-orbit performance and unit economics of Gen-3 satellites are an attractive, high-performance, low-risk option for customers seeking to accelerate their sovereign space-based intelligence capabilities. And third, the Gen-3 architecture offers a proven technology platform that can be expanded and leveraged to accelerate the development of next-generation space systems. We are winning major new advanced technology programs from customers that are seeking to rapidly develop and deploy advanced space capabilities. Our capital-efficient approach to advancing our edge in space is delivering strong operating results. Gen-3 related products and services are winning in the market and driving 90% of our growth at attractive margins. Moving to slide 5. With a rapidly changing global landscape, now more than ever, real-time space-based intelligence is an essential element of national security. Tactical and autonomous space sensors combined with AI are fueling major economic growth opportunities as space has transitioned from a niche set of capabilities to an emerging growth industry. For major governments and enterprises around the world, sovereign space capabilities are no longer an option, but a necessity. BlackSky saw this opportunity years ago before the need for tactical space-based intelligence emerged as a critical layer in our customers' defense technology stack. We have developed a vertically integrated and purpose-built platform to meet this moment in the market. And the execution of that vision is now translating into numerous growth opportunities for the company and driving top- and bottom-line performance. Now let me turn to key highlights from the quarter. Moving to slide 6. When we entered 2026, we expected to unlock a phase of strong growth as we scaled and brought Gen-3 related offerings to market. In Q2, we hit that inflection point and are proud to report strong operating results driven by focused execution in the first half of the year. First, total revenues in Q2 grew 50% year-over-year, driven by record space-based intelligence and AI services revenue. Second, we delivered significant positive adjusted EBITDA growth unlocked by high-margin Gen-3 imaging services revenue. Third, we secured up to $200 million in year-to-date bookings and continue to increase our contract backlog and our revenue visibility. Fourth, we continue to diversify our customer base and grew revenues from our international customers by 200% over the prior period. And finally, we significantly strengthened our balance sheet and cash position through a successful $150 million capital raise, increasing our total liquidity to over $325 million. With this strong start to the year, we are well positioned to sustain this growth through the second half of the year and beyond. Now let's move on to key highlights from each of the 3 elements of our business. Turning to slide 7 and our space-based intelligence and AI services. Gen-3 adoption, combined with a major step-up in imagery subscription contracts, was a key driver to delivering 50% sequential growth in this part of the business. During the quarter, we hit an important milestone, achieving a $100 million annual run rate for our high-margin imagery and AI subscription services. This was a major achievement as this revenue hurdle begins to accelerate incremental earnings growth as evidenced by the positive adjusted EBITDA performance, we delivered during the quarter. We are achieving this operating leverage by combining a right-sized constellation with high-quality satellites and imaging capability. This strategy results in a highly optimized and capital-efficient model to deliver strong revenue and earnings growth and significant returns on invested capital. As you can see from our Q2 performance, we're delivering 14% adjusted EBITDA margins on $33 million of revenue driven by our high-performing constellation. We have a business model that is working with high-performing small satellites that provide strong operating leverage which we can scale efficiently to meet demand and rapidly launch new capacity as needed commensurate with the needs of our customers and the business. Our superior Gen-3 technology, combined with our industry-leading intelligence platform, enables us to meet mission-critical customer needs for real-time tactical intelligence in a rapidly changing global environment. As a result, we are continuing to see strong demand internationally as evidenced by 150% year-over-year growth in international subscription revenues. Multi-year international contracts for space-based intelligence subscription services now comprise over 80% of our total funded backlog. We expect this momentum to continue as new customers adopt Gen-3 services and current customers expand existing contracts to take advantage of growing Gen-3 capacity, improving latency, and revisit performance. Moving on to slide 8. We are continuing to successfully scale our Gen-3 production operations to support the delivery of Gen-3 satellites for the expansion of our commercial constellation while meeting delivery milestones for a number of sovereign mission solutions programs. Our next 2 satellites in our commercial constellation are on track for launch in Q3. Despite some launch-related delays, we remain on track with our deployment plans to have 8 Gen-3 satellites on orbit by the end of the year. As a reminder, we do not require any additional Gen-3 satellites to hit our 2026 revenue targets. We have a pipeline of over 20 Gen-3 satellites underway and are scaling production of these satellites to support future capacity demands and anticipated expansion of the Mission Solutions business. Now let's turn to Mission Solutions on slide 9. We are continuing strong execution across our portfolio of key Mission Solutions programs, as evidenced by ongoing revenue growth from this part of the business. We are on track for an on-time delivery of our first sovereign Gen-3 satellite in 2026 and expect to hit other major delivery milestones this year, contributing to second-half revenue growth. As Gen-3 continues to demonstrate exceptional on-orbit performance, we are actively growing our pipeline and working to capture a number of new sovereign opportunities to build additional backlog and contribute to our future growth. Our strategy of bundling our subscription services with sovereign space solutions enables us to deliver high-margin growth while building long-term relationships that will drive recurring revenue. We have a distinct advantage in that our customers can operate firsthand the capabilities they are seeking to acquire from a mature and proven commercial on-orbit system. This massively reduces their risk of designing, building, and deploying an unproven capability, and when combined with our attractive economics and our ability to rapidly deliver systems through a scaled production capacity, provides customers with better cost, schedule, and performance certainty. We believe we are well positioned to rapidly grow this business, especially at a time when countries are accelerating the development and deployment of their current and future space-based intelligence capabilities and are demanding proven best-in-class assets and technology. Moving on to slide 10 and our advanced technology programs. This element of our business continues to serve as another growth vector while extending our technology leadership in space and AI that is highly aligned with customer needs. The Gen-3 architecture offers a proven technology platform that can be expanded and leveraged to accelerate the development of next-generation space systems. We are winning major new advanced technology programs, and here are some of the highlights from the quarter. First, we were awarded an 8-figure contract from the U.S. government to accelerate AROS development to meet mission-critical foundation mapping needs and provide a cost-effective alternative to traditional commercial capabilities. Second, we grew revenues from our growing portfolio of advanced technology programs by 65% over the prior quarter. Third, we won additional R&D contracts for the advancement of AI-enabled space-based solutions in support of defense-related tactical intelligence. And finally, we expanded multiple existing contracts associated with the development of optical intersatellite links and advanced payload technologies as an extension to current and next-generation space platforms. This part of our business is accelerating our ability to leverage customer-funded development programs to advance critical technologies and space capabilities that, in turn, ultimately strengthen our commercial offerings and competitive differentiation. This model results in improving capital efficiency and increasing revenue growth while minimizing R&D costs. Turning to slide 11, we continue to make excellent progress advancing the development of AROS. And with the NRO contract award, we are able to accelerate this program to support a targeted launch in 2028. The AROS satellites are being designed to address a critical market need in that timeframe. A number of legacy systems are expected to reach end of life and leave a gap in the market. This capacity gap creates an opportunity for cost-effective and very high-resolution solutions to support country-scale digital mapping, broad area monitoring, maritime surveillance, and 3D digital twin applications. This capability will deliver foundational services in support of current and emerging tactical mission applications. This system will leverage Gen-3 technology and our existing space infrastructure, software platform, and operational architecture. When integrated with our Gen-3 constellation, customers will be able to combine broad area search and mapping with high-frequency dynamic monitoring and AI-driven analytics through a unified platform. In summary, we have established multiple growth vectors of a highly capital-efficient platform that is driving a flywheel effect for long-term sustainable growth. The execution of this strategy is clear. Space-based intelligence generates high-margin recurring revenue. Mission Solutions expands strategic customer relationships and drives growth through the delivery of sovereign solutions. And advanced technology programs accelerate innovation and extend our technology leadership through customer-funded investments. Together, these business elements reinforce one another, creating a highly differentiated platform that is an essential element of our customers' defense technology stack as the space autonomous and AI-enabled solutions accelerate in the market. With that, I'll turn it over to Henry to go through the financial results. Henry? Henry Dubois: Thank you, Brian. And good morning, everyone. The second quarter marked an important financial milestone for BlackSky as we delivered record space-based intelligence revenue, significant year-over-year revenue growth, expanded gross margins, strong positive adjusted EBITDA, continued backlog growth, and a strengthened balance sheet. Perhaps most importantly, these financial results demonstrate the strong operating leverage inherent in our business model. As Gen-3 capacity expands and high-margin subscription services become a larger portion of our revenue mix, we're beginning to realize the financial benefits of our business. With that, let's turn to our results. Beginning with slide 13, revenues for the second quarter of 2026 were $33.3 million, up 50% over the prior year quarter, and up 60% sequentially from Q1. This strong performance was driven by our space-based intelligence and AI services business, which delivered a record revenue of $24.5 million, representing a 50% growth from Q1. This growth was attributable to a step up in our recurring subscription revenue driven by the expansion of international customer demand. In fact, our international space-based intelligence and AI services revenue grew 150% as compared to Q2 2025. In Q2, our Mission Solutions revenue contributed to year-over-year growth as we continued strong execution against major contract milestones. Our advanced technology program revenue also drove growth in the quarter as we began work on the NRO contract to support the development of AROS that we won earlier in the quarter. As you can see, all aspects of our business contributed to the significant growth in the quarter. Turning to slide 14, Q2 cash operating expenses for the quarter remain flat while we grew revenues by 50% year-over-year. This performance demonstrates the strong operating leverage in our business. As a reminder, cash operating expenses exclude stock-based compensation, depreciation, and amortization expenses. Moving on to slide 15, our adjusted EBITDA for the second quarter of 2026 increased to $4.7 million, a $7.5 million improvement over the prior year quarter. Driven by 50% growth in our high-margin space-based intelligence and AI services revenue, the $4.7 million achievement represents an adjusted EBITDA margin of 14.2% on total revenues of $33.3 million. Let's move on to our cash and liquidity position as shown on slide 16. We ended the second quarter with a cash balance of $244.1 million, representing an increase of over 150% compared to the prior year quarter. We raised $150 million through our ATM offerings. This capital raise was executed opportunistically to strengthen our balance sheet and cash position. At the end of Q2, our total liquidity position exceeded $325 million, representing a 108% increase compared to the prior year. Capital expenditures during the quarter were approximately $15 million, bringing year-to-date capital expenditures to about $31 million in line with our expectations. Turning to slide 17, we are reaffirming our full-year guidance, which we previously updated back in May. Specifically, we expect revenue between $130 million and $150 million, adjusted EBITDA between $12 million and $24 million, and capital expenditures between $50 million and $60 million. After increasing our guidance last quarter and with a strong performance in the second quarter, we remain confident in achieving our full-year outlook. In summary, I'm pleased with the strong financial performance in Q2 and the growing momentum in our business. With strong revenue growth, increasing profitability, and a solid balance sheet, we believe we are well positioned to capitalize on the significant market opportunities ahead. With that, back to you, Brian. Brian O’Toole: Thanks, Henry. In closing, we're pleased with the strong operating performance we delivered in the quarter, which marks an important inflection point for the business. The exceptional performance of Gen-3 is driving strong customer demand across all aspects of our business that is now translating into accelerating revenue and expanding earnings growth. As I described earlier, we are achieving a powerful flywheel effect that is fueling long-term sustainable growth. Space-based intelligence generates high-margin recurring revenue. Mission Solutions expands strategic customer relationships and drives growth through the delivery of sovereign solutions. And advanced technology programs accelerate innovation and extend our technology leadership through customer-funded investments. The strong execution of our strategy is playing out as evidenced by the results in the quarter, and we're well positioned to build on this momentum in the second half of the year and accelerate that growth into 2027. This concludes our remarks for the call and we'll now take your questions. Operator: [Operator Instructions] Your first question comes from the line of Edison Yu at Deutsche Bank. Edison Yu: I want to come back to a comment, Brian, you made about, I think you said 20 satellites in the pipeline. Any more color you can provide on that? In particular, how many of those do you think are for yourself versus potential sovereign customers? Brian O’Toole: Yes, good morning, Edison. Thanks for the question. I think there's a balance of use of those assets. First off, our goal is to maintain an hourly revisit service with our commercial constellation. So that's a constellation of about 12 to 15 satellites. There's obviously a lot of demand, and we have existing contracts for Mission Solutions customers. So some of those assets will be used for those. The remaining satellites are creating inventory that we can leverage and improve our competitive posture for some of the Mission Solutions programs that we're pursuing. We believe that by having that inventory on hand and a scalable production environment, we can start delivering to customers within a year or so of getting those orders, which is highly differentiated if they wanted, if they were going to others and had to start from scratch, what may take as long as 3 to 5 years. So we struck a really good balance, building the capacity and the inventory and having assets available to drive the growth in the business. Edison Yu: Understood. And then separately, just follow up on AROS. I know you got the funding from the NRO. I guess what's the next kind of commercial milestone we may be looking for? Is it something with Apple or Google? And if I think 2028 is the timeline, would you need to get some type of commitment from the commercial guys before 2028 to take off, or is the NRO commitment enough? Brian O’Toole: Right now, the NRO commitment is enough. There's clearly a gap coming and we're seeing strong commercial opportunities for AROS. So right now, this was a pretty significant contract award. It's sufficient capital, along with some internal investments that we'll use to augment that to keep this thing on track. And then so I guess you'll see some incremental announcements over time as we are talking to other customers and continue to evaluate the size of that constellation and the rate at which we need to produce those satellites. But right now we're in really good shape. There's clear demand, and it's a capital-efficient approach to getting this capability into the market. Operator: Your next question comes from the line of Chris Quilty. Christopher Quilty: How much of that -- I mean, is that all pure service revenue that is recurring, like think of it as ARR from this point going forward where you'll build on that base? Or were there any one-time recognitions in the quarter? Brian O’Toole: Good morning, Chris. Sorry, I think we missed the beginning of your question. Could you say it again? Christopher Quilty: In the space-based intelligence and AI, you had a nice $8 million sequential step up. And I was wondering is that, were there any one-time elements in there or is that a good base on a go-forward basis? Brian O’Toole: It's a really good base on a go-forward basis. It's all subscription revenue. As we've been saying, as we get the first tranche of Gen-3 satellites in orbit and delivering that service, we expect to begin to unlock revenue growth from that part of the business. And that's what you saw happen in the second quarter. And of course, you're seeing that revenue step up translate into bottom-line growth. So we see this as a base for moving forward and we anticipate this type of performance is going to continue. Christopher Quilty: Got you. So that's genuinely just a Gen-3 unlock of contracts you had in place. I guess the question is, did all of your customers turn on their Gen-3 contracts in a quarter, or are there more that will in the back half of the year? Brian O’Toole: Well, there's more customers coming. I think also keep in mind, there is still a lot of our customers that also use Gen-2. So, what you saw happening here was new customers. As we've been saying, we had a number of customers that last year started with some small pilots that quickly went to 7- and 8-figure subscription deals, so you're seeing those kick in, seeing other pilot programs come online, and we're also seeing other existing customers starting to expand their contracts and transition into Gen-3 services. So we're seeing a lot of momentum and opportunity across multiple vectors for driving growth around Gen-3 services. Christopher Quilty: Great. And Henry, it looks like that NRO contract is now up around like $150 million. Can you remind us how that's going to flow through the P&L and also is it reflected as part of the backlog? Brian O’Toole: Yes, Chris, let me take that one. I think when you look at that broader number, it's the total amount of contract dollars that we've, we're getting through that contract, which consists of the base subscription for EOCL imagery services, as well as things like the AROS development, which is more of an R&D program rather than a subscription business. So I just want to be clear that when you hear that number, that's a total number from a point of year-to-date. So -- and then how that revenue gets applied to the business is the EOCL subscription revenue falls under the space-based intelligence business. And right now the AROS work goes into the advanced technology program line. And that's a contracted date number. Christopher Quilty: Got you. And so when would we see that ramp, and would it shift, would it stay in the advanced technology programs? Brian O’Toole: We're anticipating that it'll shift into Mission Solutions. And it will also, as we build out the commercial aspect of that, drive revenue in the space-based intelligence business as well. But I think we're seeing opportunities for AROS where there is strong interest both here and internationally for a government-owned commercially operated model for AROS, which would be part of the Mission Solutions offering. And we see a pure-play commercial imagery service for those types of mapping capabilities that would come off of a baseline commercial constellation. Christopher Quilty: Got you. And so obviously you had a design for the system. You had a customer who stepped in and said we like this and we'd like to do certain things with it. Does that imply that there will be 2 designs, a specific one for that customer and then another baseline that you'll operate on? Or is it same design? Brian O’Toole: Same design. Yes, and Chris, just to be clear, the reason we're moving forward with this is, as I mentioned in my remarks, there's a lot of the mapping capacity in the market right now comes from a handful of really large, expensive satellites that are coming out of service in the next couple of years, creating a gap. So customers have been coming to us seeking this solution. So we've optimized the design to be a single design to support the commercial and the government requirements. And I should also add, it's really building on the advanced and superior technology we have in Gen-3. So that's giving the customers a lot of comfort in that Gen-3 obviously is a best-in-class space vehicle built on a long heritage of small satellite capability that we've developed here at BlackSky. So that's giving us a significant competitive advantage. Operator: Your next question comes from the line of Jeff Van Rhee from Craig-Hallum Capital Group. Jeff Van Rhee: Just a few for me. Maybe, Brian, last quarter you mentioned you had a couple dozen Gen-3 6-figure pilots working through. And just curious if you can quantify to the degree that pipeline has expanded evolution there, paths to full deploy, just maybe a little more color along that sort of set of metrics that would be nice. Brian O’Toole: Yes, Jeff, I think the way to think about it is, we've been continuing to expand the pilot projects. You can see from some of our announcements, those pilots are transitioning to 7- and 8-figure subscription contracts. We've got a very good pipeline of customers that are moving through that funnel. So I mean, without getting into quantifying it, it's a significant number of customers that are looking at the system and trying it out. And then what we're seeing is a very high conversion rate of those customers into the next phase of contract growth. Jeff Van Rhee: Maybe just one follow on there. If you look at the very large portion of the pipeline, very large deal portion of the pipeline, primarily sovereigns. Just any color on the evolution of those deals and how changes and how those deals are moving forward, things they're focused on, competitive landscape timing, that kind of thing. Just maybe an update on the sovereign/very large deal portion. Brian O’Toole: Yes, I think what we're seeing Jeff, and I think it's really, as I mentioned in my remarks, the exceptional performance of Gen-3 as a best-in-class space vehicle is a competitive differentiator. And as we bundle that with the very high-resolution imaging services from our Gen-3 constellation, it's a very attractive offer for these customers that are seeking to accelerate their capabilities. The -- so what we're seeing is because of that success, we're seeing a growth in the pipeline. And that is also triggering initial subscription contracts. And it's driving expanded discussions on how to accelerate their programs with Gen-3 satellites that we can take off the production line. And that's -- again, Jeff, it's another driver to why we have invested in the inventory for the 20 satellites that I mentioned. Jeff Van Rhee: Yes, yes, makes sense. And congrats on the Gen-3, by the way. The imagery you guys are sharing is just fantastic. One last for me on space domain awareness. Just kind of curious, a lot of folks talking, although it's very seemingly misunderstood in terms of the in-space warfare aspect and just awareness of who's where doing what. You made a couple announcements about some of the things you're capable of and starting to do there. Just any sense of scope, timing, when you think that will turn into anything material? Brian O’Toole: Yes, I would say we're early days on that. We have an architecture that supports non-Earth imaging. You've seen some of that come out of Gen-2. It's extremely compelling and high performance and we're able to support those applications with our real-time architecture. Gen-3 will be able to provide that capability as well. We have been receiving funding under some of our advanced technology programs to advance the automation of this. So we have some incremental programs and revenue moving through the system and it's still early, but we're going to expect that to grow. Operator: Your next question is from the line of Timothy Horan from Oppenheimer. Timothy Horan: Can you talk about how rapidly your AI analysis is improving and your time to delivery maybe, where you were a year or 2 from now, and how are you improving on that? And can you just elaborate a little bit more on these new space-based systems? What's your skill set that's unique and customers are looking for from you? Just any more color on your barriers to entry? Brian O’Toole: Yes, maybe I'll start with your second question first. I think you're obviously seeing the performance of Gen-3 is exceptional, and customers are seeing that exceeded expectations right out of the gate. And the on-orbit performance of that has emerged as a best-in-class space vehicle. The 35-centimeter image quality for this class is exceptional and you can see that being reflected in the growth of our revenue and earnings on the bottom line. I think what's important to understand is we were able to achieve this level of performance and technology lead right out of the gate, because this is the third-generation satellite for us. And we're building on significant on-orbit experience and a strong technology heritage for satellites of this class. If you look back, we haven't had to launch tech demos to prove out the technology. Our satellites have worked right out of the box as expected. There's others in the market that have not internally built a satellite of this class before. And when you look at the technology that's going into orbit, there's a huge difference in image quality. And this is the part of the system that matters most to customers as we're in a time when mission capability is critical. Also, when you kind of look at the cost performance perspective of this, compared to the larger, more expensive satellites, we're offering really significant value at an attractive point for customers, which is also contributing to the performance of Gen-3. I'd say this technology heritage also extends into AI. We started investing in AI 10 years ago. It's been built into our platform from day 1. And we deliver AI-enabled intelligence in real time. So as the data is coming off the satellites, we're able to bring that directly to the customers without having to bring it to the ground, process it for hours and then deliver it to customers. So we're scaling our AI capability in multiple directions. We are improving the speed of that capability. And at the same time, we're improving the quality of the algorithms and the performance of the insights that we can derive off of satellites. The exceptional performance of Gen-3 gives us another competitive advantage because the very high-resolution case when applying AI algorithms delivers exceptional insights and other analytic products that are more difficult to achieve with lower-resolution satellites. Now, I also want to add that this technology baseline translates into the competitive advantage for our Mission Solutions business where customers can try all of this out firsthand as they're developing their acquisition program. So I think we built a very strong, technology-based, experienced team. And we're on our third generation of this, and that's being reflected in the leadership we're bringing to the market. Timothy Horan: And then lastly, we haven't really ever modeled in sovereign all that much or these new space-based systems. Can you talk about what percentage of revenue these 2 could represent if we're going out longer term? Just any sense. Brian O’Toole: Yes, look, I think right now, space-based intelligence services, the high-margin part of the business is about 70% of our revenues. Obviously, that's going to continue to grow. I think as we get into next year and the year after and we start to capture some larger Mission Solutions deals, you'll see some of the growth in that business. But I think the goal is because we're bundling these things together, we're going to be able to maintain a very high gross margin performance across all 3 elements of the business. Timothy Horan: And that 70%, will that be maintained or these other businesses will be growing a lot faster, maybe that drops to 50%? Brian O’Toole: I don't want to get into forecasting that, but I think that keep in mind these Mission Solutions tend to be very large and they get delivered over a couple of years. Those are lumpy businesses, so we'll see how that plays out. But we expect all of -- as I mentioned in my remarks, all 3 aspects of our business we expect to grow. And as we win Mission Solutions deals, you can expect there is going to be some large lumpy ones that are going to create some quarter-over-quarter variability. Operator: Your next question comes from the line of Austin Moeller at Canaccord Genuity. Please go ahead. Austin Moeller: On the Mission Solutions, are those all sovereign governments or are there potential U.S. intel agencies that would be interested in a responsive launch of an ISR satellite? Brian O’Toole: We see opportunity both within the U.S. government and internationally. I would say the strongest demand right now is internationally, but obviously, we do a lot of work with the U.S. government and we feel there's some emerging opportunities there. Austin Moeller: And within the current quarter, are you seeing the most meaningful budget dollars from the U.S. customer coming out of the fiscal year '26 budget as people are trying to spend the appropriated dollars before the end of the year? Or are you also starting to see funds from reconciliation bills like big beautiful bill that had some space funding. Brian O’Toole: I think that's all still playing out. I think we're seeing all that flow through multiple types of contracts. EOCL obviously continues at the current levels for us. You're seeing an uptick from us in U.S. government funding for advanced technology programs, both for AROS and our next-generation payloads with advanced segmented optics capabilities. So -- and then of course, we're pursuing a number of other opportunities that leverage both of those things. So the budget's still playing out, even though it's getting late in the year, but we're capturing what we planned. Operator: Your next question is from the line of Sheila Kahyaoglu from Jefferies. Adam Samuelson: This is Adam Samuelson on for Sheila. I guess the first question is in the space-based intelligence and AI, just trying to get a better sense of how much of your customer base is already converted to Gen-3 versus kind of, or what's that mix look like today? Just thinking about the potential kind of revenue uplift that would come as you see more customers switching to the Gen-3 offering. Brian O’Toole: I think almost all the customers we have, the large ones are using both because they're taking advantage of the constellation of Gen-2s and Gen-3s to get this very high revisit responsive tactical capability. What we're seeing is that as they start to use Gen-3 in their operations that they're going to be shifting to higher levels of Gen-3 tasking over time, which is a win-win in the sense that they'll start getting high-valued, very high-resolution imagery as a higher value product for us. So that helps drive our earnings growth. So I think at the end of the day, we've got a very compelling offering with the constellation we have. And as we add more Gen-3s, that's going to keep getting better. Adam Samuelson: Okay. And then just a quick follow-up in the quarter prepared remarks detailed 150% international revenue growth. I know in the filings you've provided North America revenue, so it's not quite necessarily international, but if international is growing 150% and presumably the most support from all of North America is the U.S. Why is the U.S. business was flat, maybe slightly down in the quarter? Is that correct or am I missing something there? Brian O’Toole: Yes, I would say what we're seeing in the U.S. is what we expected, primarily driven by EOCL. And that's, as we've said in the past, that last year we assume this year last year's run rate, right? So, I think you're seeing that reflected in the quarterly numbers. Henry, do you have anything you want to add to that? Henry Dubois: Yes, I mean, Adam, if you take a look at the Q2 this year versus Q2 last year, you may recall last year we had some adjustments on the U.S., between the second quarter and third quarter. And so the second quarter, you still had higher U.S. government spending. And so it's the growth from the international in that quarter to the growth in international this quarter that we were comparing. Operator: Your next question is from the line of Greg Pendy from Clear Street. Gregory Pendy: Just want to shift gears a bit to the balance sheet. The ATM gave you, you raised $150 million. You said total liquidity is at $325 million. And that stacks against CapEx at $50 million to $60 million. So just wondering what -- how should we think about that? I think in the last quarter you said AROS could be a CapEx-lite strategy with partnerships? Does this give you flexibility to possibly just do this alone? Wondering how we should think about the strong liquidity position you're on now. Brian O’Toole: Yes, I think the way to think about it is we were -- we had a good opportunity to raise that capital to strengthen our balance sheet and improve our cash position. And it's there for if and when we need it. We are employing a CapEx lite strategy for AROS. As you can see, we won an 8-figure contract from a customer to essentially fund that program out of the gate. And so, yes, that $150 million is there opportunistically and it's there if and when we need it. Operator: Your next question is from the line of Ryan Koontz at Needham & Company. Ryan Koontz: Just reflecting on your progress in your non-traditional U.S. government business. Maybe share a little more color in your differentiation on the mission systems and kind of operations support that you've got there for onboarding new customers, and also reflect on maybe changes you've made, investments in go-to-market that give you reach and how do you plan to support these sort of customers to scale in an OPEX-efficient way. Brian O’Toole: Yes, as I said before, our advantage in the Mission Solutions business is the exceptional performance -- on-orbit performance of Gen-3, combined with the unit economics of that platform and our ability to quickly pull those satellites, pull satellites off the production line and put that capability, a high level of certainty to customers, both from a cost performance perspective to meet their requirements. Also, we can bundle that with our commercial services, which give them immediate additional capabilities and the opportunity for them to test the system and try it out firsthand with mature technology and mature operating capability. That's a competitive advantage for us in the sense that our software platform, the real-time capabilities with AI is highly mature and works operationally at scale and the satellites are best-in-class. So that combination of capability is creating a number of opportunities for us. Ryan Koontz: That's helpful. How about investments in go-to-market on that line? How does that scale going forward? Do you feel like you have the resources you need? How has that evolved over the last several quarters? Brian O’Toole: We have been investing in sales and marketing. We have been investing in the scaling of our sales organization, including our partner network, which is giving us scale globally, so we're making very good progress from that perspective. And again, we started focusing on this international strategy years ago and you're seeing the results. Operator: Your next question is from the line of Greg Burns at Sidoti. Gregory Burns: What is the size of the Mission Solutions backlog? Brian O’Toole: Greg, we don't break that out. We just provide a single number for the total business. Gregory Burns: Okay. And then we saw a strong kind of unlock from Gen-3 this quarter with a big step up in imaging revenue. Is there another unlock to happen, or now we at a run rate? Do you get up 4 more satellites and there's another unlock, or does it kind of build incrementally from this level now that you have 4 Gen-3 operational now? Like, how should we think about kind of the revenue progression? Brian O’Toole: Yes, I think we've established a very strong base, which is to build and grow from as a strong subscription base. So the way you should think about it is that you'll start seeing that incrementally grow, both top line and bottom line, quarter-over-quarter. We will put additional Gen-3 satellites on orbit, which will improve the service and the level of capacity in different regions. So that will contribute to the scaling of that business. But you should think about where we are now as a solid baseline of subscription revenue. And as we mentioned at this $100 million run rate, which gets us over a revenue hurdle, which is driving bottom-line performance for every incremental dollar we generate from there going forward. Gregory Burns: Okay. And what is the NRO's current budget for broad area mapping? How much are they spending a year currently on that? Brian O’Toole: Yes, that's something I can't share in public. Gregory Burns: Okay. And do you have a sense of the NRO budget, like where that's landing? Is funding getting restored to prior levels? Like, do you have any sense of maybe that revenue line item stepping back up to where it was? Brian O’Toole: We're seeing how that manifests in the '26, we've got good visibility. For '27, it's still unclear. I just think from our perspective, we assumed that the current levels from last year, but we are seeing growing interest in adoption on Gen-3. And they're very interested in that capability. And we think that's going to drive some growth going into '27. Operator: Your next question is from the line of Dave Storms at Stonegate. David Storms: The CapEx guide was obviously unchanged. You started investing in AI like 10 years ago, but is there anything about the broader AI infrastructure build-out that's causing any constraints or higher costs or competition for AI talent, anything like that, you're navigating? Brian O’Toole: Not really. I think, as you said, we started investing in this 10 years ago, both with technology, scalable infrastructure and talent. We're able to acquire the talent we need. I'll say we have been able to build quite a bit of efficiencies into our AI processing. We are really set up with our architecture to process where we can generate revenue to minimize our costs and maximize the value we're delivering to customers. And so I think we're in a great spot. And the expansion of our AI capabilities is baked into our model. David Storms: Got it. That's helpful. And then maybe one quick follow-up. I know you can't share specifics, but broadly how do you think about M&A? Are there any capabilities or assets you'd consider adding through another kind of LeoStella-type transaction? Brian O’Toole: Yes, Dave, we're always looking at opportunities, so that can grow our business or improve our competitive posture. So whether that's in space or on ground in AI or through expanding customers' reach. We look at those things all the time and if we see something that's interesting and makes sense, we'll take a look at it. Operator: There are no further questions at this time. We have reached the end of the Q&A session. This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in BlackSky Technology, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and BlackSky Technology wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends BlackSky Technology. The Motley Fool has a disclosure policy. BlackSky (BKSY) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in BlackSky Technology Inc.? Here are five stocks we like better. Strong Q2 performance: Revenue rose 50% year over year to $33.3 million, while adjusted EBITDA reached $4.7 million, or a 14.2% margin. Subscription-based space intelligence and AI revenue climbed to a record $24.5 million. Gen-3 is driving growth: Gen-3 products accounted for 90% of quarterly growth, helping imagery and AI subscriptions reach a $100 million annual run rate. BlackSky expects eight Gen-3 satellites in orbit by year-end and plans to launch two more in Q3. Outlook reaffirmed: BlackSky ended the quarter with more than $325 million in liquidity and maintained 2026 guidance for $130 million–$150 million in revenue, $12 million–$24 million in adjusted EBITDA and $50 million–$60 million in capital expenditures. 3 Satellite Stocks To Check Out Before SpaceX's IPO BlackSky Technology (NYSE:BKSY) reported second-quarter 2026 revenue growth of 50% from a year earlier as adoption of its Gen-3 satellite imagery services increased, helping the company reach positive adjusted EBITDA and reaffirm its full-year outlook. Revenue for the quarter totaled $33.3 million, up 60% sequentially from the first quarter, Chief Financial Officer Henry Dubois said. Space-based intelligence and AI services generated a record $24.5 million in revenue, rising 50% sequentially, driven by expanding recurring subscription revenue and international demand. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth 3 Stocks With Near-Unanimous Buys That Could Rally Higher The company’s adjusted EBITDA was $4.7 million, compared with a loss implied by a $7.5 million year-over-year improvement. Adjusted EBITDA margin was 14.2% on total revenue. Cash operating expenses were flat from the prior-year period despite the 50% increase in revenue, according to Dubois. Chief Executive Officer Brian O’Toole said BlackSky’s Gen-3 satellites are delivering 35-centimeter imagery and have become the primary driver of growth. He said Gen-3-related products and services accounted for 90% of the company’s growth during the quarter. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High BlackSky reached a $100 million annual run rate for imagery and AI subscription services in the quarter. O’Toole said the higher-margin subscription business is beginning to produce operating leverage as Gen-3 capacity expands. International space-based intelligence and AI services revenue rose 150% from the second quarter of 2025, while total international revenue increased 200% over the prior-year period. Multi-year international subscription contracts represent more than 80% of BlackSky’s funded backlog, O’Toole said. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling During the question-and-answer session, O’Toole said the quarterly increase in space-based intelligence and AI revenue was entirely subscription revenue rather than one-time recognition. He said additional customers are still coming online and that existing customers are expanding contracts and shifting more tasking toward Gen-3 services. The company plans to launch two additional satellites for its commercial constellation in the third quarter. Despite launch-related delays, BlackSky expects to have eight Gen-3 satellites in orbit by year-end. O’Toole said no additional Gen-3 launches are required for the company to achieve its 2026 revenue targets. BlackSky has more than 20 Gen-3 satellites in production or in its pipeline. O’Toole said the satellites will support the commercial constellation, existing Mission Solutions customer contracts and inventory for prospective sovereign customers. The company’s target commercial constellation comprises roughly 12 to 15 satellites to maintain hourly revisit service, according to O’Toole. Maintaining available satellite inventory could allow BlackSky to begin delivering systems within about a year after receiving customer orders, compared with what O’Toole said could be a three- to five-year process for competitors starting from scratch. BlackSky said it remains on track to deliver its first sovereign Gen-3 satellite in 2026 and expects additional delivery milestones to contribute to second-half revenue. O’Toole said demand for sovereign Mission Solutions is currently strongest internationally, though the company also sees opportunities with U.S. government customers. Management said Mission Solutions can be uneven because contracts tend to be large and are delivered over multiple years. BlackSky does not separately disclose its Mission Solutions backlog. BlackSky received an eight-figure U.S. government contract during the quarter to advance development of its AROS system, designed for foundation mapping and broader-area monitoring applications. The company said the National Reconnaissance Office contract supports a targeted 2028 launch timeline for AROS. Advanced Technology Program revenue increased 65% from the prior quarter as BlackSky began work under the AROS-related contract. The company also cited additional research and development contracts involving AI-enabled space-based intelligence, optical intersatellite links and advanced payload technology. O’Toole said the NRO commitment, together with internal investment, is sufficient to keep AROS on track at this stage. He described the strategy as capital-expenditure light and said the company expects AROS-related work to move initially from Advanced Technology Programs to Mission Solutions, while a commercial constellation could eventually contribute to space-based intelligence revenue. BlackSky said it is designing a single AROS configuration intended to meet both commercial and government requirements. The system is expected to build on Gen-3 technology and BlackSky’s existing space infrastructure, software platform and operational architecture. BlackSky ended the quarter with $244.1 million in cash, up more than 150% from a year earlier. The company raised $150 million through at-the-market offerings during the quarter, bringing total liquidity to more than $325 million, a 108% year-over-year increase. Capital expenditures were approximately $15 million in the second quarter and about $31 million through the first half of the year. BlackSky reaffirmed its 2026 guidance for: Revenue of $130 million to $150 million Adjusted EBITDA of $12 million to $24 million Capital expenditures of $50 million to $60 million O’Toole said the company expects all three business lines—space-based intelligence services, Mission Solutions and Advanced Technology Programs—to grow, while the recurring subscription business remains the company’s largest revenue component at approximately 70% of revenue. BlackSky Technology, Inc operates Earth observation and geospatial intelligence services through a constellation of small satellites and an analytics platform. The company collects and processes high-revisit satellite imagery, enabling near-real-time monitoring of global events and locations. Clients across government, defense and commercial sectors leverage BlackSky’s imagery and data to support decision-making in areas such as supply chain monitoring, humanitarian aid, infrastructure management and security operations. Founded in 2014 as part of Spaceflight Industries, BlackSky has grown its satellite constellation and analytics capabilities to deliver satellite imagery with high revisit rates and rapid tasking. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "BlackSky Technology Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved a major inflection point in Q2 with 50% year-over-year revenue growth, driven by the scaling of Gen-3 imagery services and record space-based intelligence revenue. Reached a $100 million annual run rate for high-margin imagery and AI subscription services, which management identifies as a critical hurdle for accelerating incremental earnings growth. Leveraged Gen-3's superior 35-centimeter imaging performance and unit economics—at approximately 1/5 the cost of legacy platforms—to capture 90% of the company's current growth. Expanded international footprint significantly, with international subscription revenues growing 150% year-over-year and now comprising over 80% of the total funded backlog. Capitalized on a vertically integrated platform to meet the rising global demand for sovereign space capabilities, which management views as a necessity rather than an option for national security. Maintained flat cash operating expenses despite 50% revenue growth, demonstrating the inherent operating leverage of the business model as high-margin services become a larger portion of the mix. Reaffirmed full-year 2026 guidance with revenue expected between $130 million and $150 million and adjusted EBITDA between $12 million and $24 million. On track to have 8 Gen-3 satellites on orbit by the end of 2026, though management noted that hitting 2026 revenue targets does not require additional launches beyond current capacity. Accelerating the AROS (Advanced Real-time Optical System) program for a targeted 2028 launch to fill an expected market gap as legacy systems reach end-of-life. Scaling production with a pipeline of over 20 Gen-3 satellites to support future commercial capacity and anticipated expansion of the Mission Solutions business. Anticipating continued momentum into 2027 as new customers adopt Gen-3 services and existing customers expand contracts to utilize improved latency and revisit performance. Strengthened liquidity to over $325 million following a successful $150 million capital raise via ATM offerings to provide strategic flexibility. Secured an 8-figure U.S. government contract to accelerate AROS development, utilizing a customer-funded R&D model to minimize internal capital requirements. Noted some launch-related delays but confirmed the deployment plan for the commercial constellation remains on schedule for the second half of the year. Reported that the first sovereign Gen-3 satellite delivery remains on track for 2026, which is expected to contribute to second-half revenue growth. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explained the inventory allows them to deliver Mission Solutions to customers within approximately one year of an order, compared to a 3-to-5-year lead time for competitors. The assets will be balanced between maintaining an hourly revisit commercial service and fulfilling specific sovereign mission contracts. Management confirmed this is a solid base for future growth, consisting entirely of subscription revenue unlocked by Gen-3 capacity. The growth was driven by the conversion of small pilot programs into 7- and 8-figure multi-year subscription deals. BlackSky emphasized that Gen-3 is their third-generation satellite, benefiting from significant on-orbit heritage that ensures systems work "right out of the box." Management noted that competitors who have not internally built satellites of this class often struggle with image quality and require tech demos to prove capability. Current AROS funding is recognized under advanced technology programs but is expected to shift toward Mission Solutions and space-based intelligence as it matures. The program follows a single design to meet both commercial mapping and government requirements, ensuring capital efficiency.

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. BlackSky Technology (BKSY) stock is in focus after the company reported second quarter 2026 results that combined 50.1% year over year revenue growth, a narrower loss, and reaffirmed full year revenue guidance of US$130 million to US$150 million. See our latest analysis for BlackSky Technology. BlackSky Technology's latest earnings announcement and reaffirmed revenue guidance have coincided with a sharp rebound in the stock, with a 1-day share price return of 10.37% and 7-day share price return of 23.73%. That follows a weaker patch that included a 90-day share price return that declined 29.56%. However, the year-to-date share price return of 33.48% and 1-year total shareholder return of 61.48% suggest momentum has been rebuilding over a longer window despite earlier volatility. If BlackSky's recent move has you looking across space and AI infrastructure, it could be worth scanning other opportunities in the sector through the 55 AI infrastructure stocks. You may find companies with very different growth and risk profiles. After BlackSky Technology’s sharp move and a share price of US$27.79 against both analyst targets and intrinsic value estimates that sit meaningfully higher, the real tension is whether the stock already reflects that optimism or not. BlackSky Technology's most followed narrative sets a fair value of $40.50 against the current $27.79 share price, which frames the recent move in a very different light. Read the complete narrative. Want to see what sits behind that confidence in BlackSky Technology? The narrative leans heavily on future revenue, earnings and a rich profit multiple. Curious which assumptions need to hold for that fair value to make sense. Result: Fair Value of $40.50 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, BlackSky Technology's story still carries execution and funding risk, with heavy capital needs and early access Gen 3 contracts that may not convert as quickly as hoped. Find out about the key risks to this BlackSky Technology narrative. The SWS DCF model also points to BlackSky Technology trading well below its estimated value. At a share price of $27.79 and a future cash flow value estimate of $69.89, the gap suggests a wide margin between market price and that model’s assumptions. Which set of expectations do you trust more? Look into how the SWS DCF model arrives at its fair value. With BlackSky Technology's mixed signals in mind, the balance of risks and rewards is not straightforward, so it makes sense to move quickly and test the numbers yourself. To weigh both sides before deciding where you stand, start by reviewing the 2 key rewards and 3 important warning signs. If BlackSky Technology has sharpened your focus, do not stop here. Use the Simply Wall Street Screener to quickly surface other stocks that match your criteria. Target established companies that look mispriced by starting with 49 high quality undervalued stocks and compare how their fundamentals stack up against expectations. Prioritise resilience and capital strength by reviewing the solid balance sheet and fundamentals stocks screener (49 results) so you are not caught off guard by weak financial foundations. Get ahead of the crowd by scanning the screener containing 19 high quality undiscovered gems before attention and capital move on to the next set of stories. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include BKSY. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Total Revenue Grows 50% YoY Driven by Demand for Gen-3International Revenue Grows 200% YoY from Diversified Customer BaseSpace-Based Intelligence Revenue Grows 50% Sequentially Accelerating Contribution Performance HERNDON, Va., August 06, 2026--(BUSINESS WIRE)--BlackSky Technology Inc. ("BlackSky" or the "Company") (NYSE: BKSY) announced results for the second quarter ended June 30, 2026. "Strong sales performance is accelerating revenue and earnings growth, driven by a 50% growth in space-based intelligence services from Q1," said Brian E. O’Toole, BlackSky CEO. "With the exceptional performance of Gen-3, we’re seeing momentum across all aspects of our business resulting in an expanding customer base, a growing pipeline, and increasing backlog. During the quarter, we added approximately $150 million of cash to further strengthen our balance sheet and cash position." Second Quarter Financial Highlights: Total revenue of $33 million, up 50% from prior year Record space-based intelligence & AI services revenue of $25 million Cash balance of $244 million as of June 30, 2026 Recent Highlights Awarded an eight-figure contract with the NRO to accelerate development of AROS, a high-performance digital mapping system, as a critical commercial alternative for foundation imagery Converted another international pilot program into a seven-figure subscription contract for Gen-3 and Gen-2 Assured and On-Demand imagery and analytic services Secured renewal awards over seven-figures supporting NGA Luno program with location, positioning, and facility monitoring services Won several six-figure contracts with commercial customers for global monitoring and analytic services Awarded multiple U.S. R&D contracts to field mission-critical Gen-3 AI solutions to enhance customer’s space-based tactical ISR operations Continued to win new orders through the U.S. Space Force Global Data Marketplace Next two Gen-3 satellites expected to launch in the third quarter Financial Results Revenues Total revenue for the second quarter of 2026 was $33.3 million, compared to $22.2 million in the second quarter of 2025. The year-over-year increase of $11.1 million, or 50%, was primarily driven by record space-based intelligence and AI services revenue from accelerating customer adoption of Gen-3 subscription services. Cost of Sales(1) Total cost of sales as a percentage of revenue improved to 27% for the second quarter of 2026, compared to 28% for the second quarter of 2025. Operating Expenses Operating expenses for the second quarter of 2026 were $32.1 million, which included $4.1 million of non-cash stock-based compensation expense and $8.0 million in depreciation and amortization expenses. Operating expenses for the second quarter of 2025 were $29.9 million, which included $3.3 million in non-cash stock-based compensation expense and $7.2 million in depreciation and amortization expenses. Excluding the non-cash stock-based compensation and depreciation and amortization expenses from both years, cash operating expenses(2) for the second quarter of 2026 were $20.0 million, essentially flat compared to $19.4 million in the prior year quarter. Net Loss Net loss for the second quarter of 2026 was $20.8 million, compared to a net loss of $41.2 million for the second quarter of 2025. The year-over-year improvement of $20.4 million was primarily due to changes in the gain/(loss) on derivatives, which are driven by fluctuations in the Company’s equity warrants and other equity instruments that are measured at fair value and driven by the Company’s common stock price. Adjusted EBITDA(2) Adjusted EBITDA for the second quarter of 2026 was $4.7 million, a 14.2% margin on $33.3 million in revenue. The year-over-year increase of $7.5 million was primarily driven by increased revenues of high-margin space-based intelligence and AI services. Balance Sheet & Capital Expenditures As of June 30, 2026, cash and cash equivalents, restricted cash, and short-term investments totaled $244.1 million. During the quarter, the Company raised $150 million from the issuance of 3.6 million shares under the Company’s at-the-market equity program. Capital expenditures for the second quarter of 2026 were 15.4 million. 2026 Outlook BlackSky is reaffirming its full year 2026 outlook, which was previously updated on May 7, 2026. The Company expects full year revenue between $130 million and $150 million, Adjusted EBITDA between $12 million and $24 million, and capital expenditures between $50 million and $60 million. BlackSky has not reconciled its non-GAAP financial outlook to the most directly comparable GAAP measures because certain reconciling items, such as stock-based compensation expenses, change in fair value of warrant liabilities, and depreciation and amortization are uncertain or out of BlackSky’s control and cannot be reasonably predicted. The actual amount of these expenses will have a significant impact on BlackSky’s future GAAP financial results. Accordingly, a reconciliation of BlackSky’s non-GAAP outlook to the most comparable GAAP measures is not available without unreasonable efforts. Investment Community Conference Call BlackSky will host a conference call and webcast for the investment community this morning at 8:30 a.m. EDT. Senior management will review the second quarter results, discuss BlackSky’s business, and answer questions. To access the live webcast, please visit the Company’s investor relations website at http://ir.blacksky.com and then select "News & Events". A presentation accompanying the webcast can also be found on the investor relations website. The webcast and conference call will be archived on the investor relations website following completion of the call. 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 system 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, unrealized gain or loss on certain warrants/shares classified as derivative liabilities; loss on debt extinguishment; non-recurring transaction costs; litigation, settlements, and related costs; severance; and impairment, obsolescence, and asset disposals. Cash operating expenses is defined as operating expenses less stock-based compensation expense for selling, general, and administrative costs, and depreciation and amortization expense. The Company believes evaluating cash operating expenses is useful to manage expenses as it excludes non-cash items that may obscure the underlying business performance. Adjusted EBITDA and cash operating expenses are non-GAAP financial performance measures. These measures 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. Please refer to the schedule herein for a reconciliation of cash operating expenses to operating expenses, the most comparable measure reported in accordance with GAAP, and this press release for a discussion of the use of cash operating expenses. 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, expected revenues and expected capital expenditures, our ability to sustain revenue growth, pipeline growth, backlog growth, expectations regarding the receipt of cash from customers over the next 12 months, expectations regarding global demand for our products and services, expectation regarding fulfillment of contracts with U.S. government customers and other government customers due to budget uncertainties, our anticipated liquidity and cash flows, our anticipated Gen-3 satellite launch timing, demand for Gen-3 solutions, 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, U.S. government budget uncertainties, 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, our most recent Quarterly Report on Form 10-Q, 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20260806116227/en/ Contacts Investor Contact Aly BonillaVP, Investor [email protected] 571-591-2864 Media Contact Pauly CabellonSenior Director, External [email protected] 571-591-2865

This article first appeared on GuruFocus. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Total revenues grew 50% year-over-year in Q2 2026, driven by record space-based intelligence and AI services revenue. Achieved a $100 million annual run rate for high-margin imagery and AI subscription services, a key milestone for earnings growth. Adjusted EBITDA turned strongly positive at $4.7 million, a $7.5 million improvement year-over-year, with margins expanding to 14.2%. Secured up to $200 million in year-to-date bookings, increasing contract backlog and revenue visibility, with international revenues growing 150% year-over-year. Strengthened balance sheet with a $150 million capital raise, boosting total liquidity to over $325 million. Gen-3 satellites are performing exceptionally, delivering 35-centimeter imagery at about a fifth of the cost of legacy platforms, driving competitive advantage. Won an eight-figure U.S. government contract to accelerate AROS development, with a targeted launch in 2028, addressing a market gap. Advanced technology program revenues grew 65% sequentially, supported by customer-funded R&D contracts for AI and optical inter-satellite links. Maintained flat cash operating expenses while growing revenues 50%, demonstrating strong operating leverage. Reaffirmed full-year guidance with revenue expected between $130 million and $150 million and adjusted EBITDA between $12 million and $24 million. U.S. government revenue remained flat, primarily due to EOCL contract levels, with growth driven mainly by international customers. Launch-related delays pushed the next two Gen-3 satellite launches to Q3, though the company remains on track for year-end deployment. The company faces lumpy revenue from mission solutions contracts, which can cause quarter-over-quarter variability. The AROS program's revenue will shift from advanced technology to mission solutions, potentially creating reporting volatility. The company did not provide specific backlog breakdown by segment, limiting visibility into mission solutions performance. The NRO budget for broad area mapping is unclear for 2027, with funding levels still uncertain. The company's growth is heavily dependent on the successful scaling of Gen-3 and international expansion, which may face geopolitical risks. Capital expenditures remain high at $50-60 million for the year, which could pressure cash flow despite the recent capital raise. Warning! GuruFocus has detected 6 Warning Signs with BKSY. Is BKSY fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide more color on the 20 satellites in the pipeline, specifically how many are for BlackSky's own commercial constellation versus potential sovereign customers? A: Brian O'Toole (CEO) explained that the goal is to maintain an hourly revisit service with a commercial constellation of about 12 to 15 satellites. Some assets will be used for existing Mission Solutions contracts, while the remaining satellites create inventory to improve competitive posture for mission solution programs. Having this inventory and scalable production allows BlackSky to deliver to customers within a year of receiving orders, a significant differentiator compared to competitors who may take three to five years starting from scratch. Q: Regarding the $8 million sequential step-up in space-based intelligence and AI revenue, were there any one-time elements, and is this a good base going forward? A: Brian O'Toole (CEO) confirmed this is a strong base for future growth, as it is all subscription revenue. The step-up was driven by the first tranche of Gen. 3 satellites delivering service, which unlocked revenue growth. He noted that more customers are coming online, existing customers are expanding contracts, and transitioning to Gen. 3 services, indicating continued momentum across multiple vectors. Q: The NRO contract is now around $150 million. How will that flow through the P&L, and is it reflected in the backlog? A: Brian O'Toole (CEO) clarified that the total contract dollars include the base subscription for EOCL imagery services and the AROS development (an R&D program). The EOCL subscription revenue falls under space-based intelligence, while AROS work currently goes into the advanced technology program line. He added that AROS revenue will likely shift into mission solutions as it develops, and there are opportunities for a government-owned, commercially operated model for AROS, as well as a pure-play commercial imagery service. Q: How much of the customer base has already converted to Gen. 3, and what is the revenue uplift potential as more customers switch? A: Brian O'Toole (CEO) stated that almost all large customers are using both Gen. 2 and Gen. 3 to take advantage of high revisit and responsive tactical capability. As customers begin using Gen. 3 in operations, they will shift to higher levels of Gen. 3 tasking, which is a higher-value product for BlackSky and will drive earnings growth. Adding more Gen. 3 satellites will continue to improve the offering. Q: With international revenue growing 150%, does that imply the U.S. business was flat or slightly down in the quarter? A: Brian O'Toole (CEO) confirmed that U.S. performance was as expected, primarily driven by EOCL, which was assumed to remain at last year's run rate. Henry Dubois (CFO) added that Q2 2025 had higher U.S. government spending, so the comparison reflects the growth in international revenue this quarter versus the prior year period. Q: Given the $150 million capital raise and $325 million total liquidity, does this give BlackSky flexibility to potentially do AROS alone, despite the CapEx-light strategy? A: Brian O'Toole (CEO) explained that the capital raise was an opportunistic move to strengthen the balance sheet and improve cash position. The capital is available if and when needed. BlackSky is employing a CapEx-light strategy for AROS, as evidenced by the eight-figure contract from a customer to fund the program out of the gate. Q: Can you elaborate on the differentiation in mission systems and operations support for onboarding new customers, and how BlackSky plans to scale in an OpEx-efficient way? A: Brian O'Toole (CEO) highlighted that the advantage in mission solutions is the exceptional on-orbit performance of Gen. 3, combined with unit economics and the ability to quickly pull satellites off the production line. This provides cost and performance certainty for customers. BlackSky can bundle commercial services, allowing customers to test the mature technology and operating capability firsthand. The company has been investing in sales and marketing, including a partner network, to scale globally. Q: Is there another "unlock" from Gen. 3 as more satellites are launched, or will revenue build incrementally from the current level? A: Brian O'Toole (CEO) stated that BlackSky has established a strong subscription base to build and grow from. Revenue will grow incrementally quarter over quarter as additional Gen. 3 satellites improve service and capacity in different regions. At the $100 million annual run rate, the company has crossed a revenue hurdle, and every incremental dollar generated from here will drive bottom-line performance. Q: What is the NRO's current budget for broad area mapping, and is funding being restored to prior levels? A: Brian O'Toole (CEO) declined to share specific budget figures publicly. He noted that BlackSky has good visibility into 2026, but 2027 remains unclear. The company assumed current levels from last year, but is seeing growing interest and adoption of Gen. 3, which could drive growth into 2027. Q: Is the broader AI infrastructure build-out causing any constraints, higher costs, or competition for AI talent? A: Brian O'Toole (CEO) said BlackSky is not facing significant constraints, as the company started investing in AI 10 years ago and has built scalable infrastructure and talent. BlackSky has achieved efficiencies in AI processing and is set up to minimize costs while maximizing customer value. The expansion of AI capabilities is already baked into the company's model. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

AppLovin (APP) came out with quarterly earnings of $3.76 per share, beating the Zacks Consensus Estimate of $3.72 per share. This compares to earnings of $2.26 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +1.08%. A quarter ago, it was expected that this mobile app technology company would post earnings of $3.4 per share when it actually produced earnings of $3.56, delivering a surprise of +4.71%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. AppLovin, which belongs to the Zacks Technology Services industry, posted revenues of $1.92 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.75%. This compares to year-ago revenues of $1.26 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. AppLovin shares have lost about 37.7% since the beginning of the year versus the S&P 500's gain of 13%. While AppLovin has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for AppLovin was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $3.99 on $2.08 billion in revenues for the coming quarter and $15.93 on $8.24 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Technology Services is currently in the bottom 39% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, BlackSky Technology Inc. (BKSY), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly loss of $0.38 per share in its upcoming report, which represents a year-over-year change of +26.9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. BlackSky Technology Inc.'s revenues are expected to be $29.76 million, up 34.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AppLovin Corporation (APP) : Free Stock Analysis Report BlackSky Technology Inc. (BKSY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Aptiv PLC (APTV) came out with quarterly earnings of $1.63 per share, beating the Zacks Consensus Estimate of $1.42 per share. This compares to earnings of $2.12 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +14.79%. A quarter ago, it was expected that this company would post earnings of $1.62 per share when it actually produced earnings of $1.71, delivering a surprise of +5.56%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. APTIV PLC, which belongs to the Zacks Technology Services industry, posted revenues of $3.27 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 1.37%. This compares to year-ago revenues of $5.21 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. APTIV PLC shares have lost about 24.8% since the beginning of the year versus the S&P 500's gain of 11%. While APTIV PLC has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for APTIV PLC was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.59 on $3.36 billion in revenues for the coming quarter and $5.93 on $12.94 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Technology Services is currently in the bottom 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. BlackSky Technology Inc. (BKSY), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly loss of $0.38 per share in its upcoming report, which represents a year-over-year change of +26.9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. BlackSky Technology Inc.'s revenues are expected to be $29.76 million, up 34.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Aptiv PLC (APTV) : Free Stock Analysis Report BlackSky Technology Inc. (BKSY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research