HERNDON, Va. - BlackSky Technology Inc. (NYSE: BKSY), a provider of real-time geospatial intelligence, has announced a contract expansion worth approximately $6 million with an international defense customer. This increase brings the total annual commitment to nearly $18 million for the company's subscription-based Assured access to Gen-2 imagery services.
The Gen-2 high-cadence, low-latency imagery services are part of BlackSky's current satellite capabilities, which offer rapid-revisit satellite imaging—a key feature for real-time monitoring and intelligence. The contract renewal underscores the market demand for BlackSky's services, particularly in the defense and intelligence sectors.
According to BlackSky CEO Brian O’Toole, the company's Gen-2 capabilities provide a level of persistent monitoring and transparency over critical areas of interest. O'Toole also highlighted the anticipation of BlackSky's Gen-3 capabilities, which are expected to further enhance spatial and temporal resolution for customers, offering very high-resolution imagery and sub-hourly revisit and delivery timelines.
BlackSky's Assured access customers benefit from the ability to task and receive thousands of high-resolution images and analytics monthly, covering strategic locations such as border crossings, nuclear and port facilities, and other vital national security and economic infrastructure.
The company operates a constellation of small satellites in low earth orbit, designed for cost-efficient image capture in response to customer needs. BlackSky's Spectra AI software platform processes data from its constellation and other third-party sensors to deliver the required insights and analytics.
This announcement is based on a press release statement and contains forward-looking statements regarding BlackSky's expectations for future events, which are subject to risks and uncertainties. BlackSky is headquartered in Herndon, VA, and its shares are publicly traded on the New York Stock Exchange.
In other recent news, BlackSky Technology Inc. reported a year-over-year revenue growth of 29% in the second quarter of 2024, totaling $24.9 million. The company also secured a multi-year contract with NASA worth up to $476 million to provide high-revisit satellite imaging data. Furthermore, BlackSky has secured $40 million in new contracts and extensions, contributing to a positive adjusted EBITDA for the third consecutive quarter.
H.C. Wainwright upgraded its price target for BlackSky's stock from $2.50 to $15.00, maintaining a Buy rating. Lake Street Capital Markets reiterated its Buy rating for BlackSky, despite a slight miss in revenue for the quarter. The firm's analyst praised BlackSky's improved financial position following a capital raise, which is believed to have provided the company with around $85 million in cash reserves.
The company has communicated its plans to launch the first of its Gen-3 satellites in the fourth quarter of this year. This next-generation satellite capability is anticipated to enable BlackSky to command higher pricing and contribute to revenue growth. BlackSky Technology Inc. has been awarded a U.S. Navy research contract to integrate advanced optical intersatellite link terminals into its Gen-3 imaging satellites.
The company has also announced a public offering of its Class A common stock priced at $4.00 per share, with Oppenheimer & Co. and Lake Street Capital Markets serving as joint book-running managers. Lastly, BlackSky's Board of Directors has approved a 1-for-8 reverse stock split of its Class A common stock, aligning with the recent developments for BlackSky.
InvestingPro Insights
BlackSky Technology Inc.'s recent contract expansion demonstrates the company's ability to secure and grow its customer base in the defense sector. However, a closer look at the company's financial metrics reveals a more complex picture.
According to InvestingPro data, BlackSky's revenue growth has been impressive, with a 43.02% increase in the last twelve months as of Q2 2024. This aligns with the company's success in expanding its contracts and services. Additionally, the company boasts a strong gross profit margin of 69.14%, indicating efficient core operations.
However, investors should note that BlackSky is currently not profitable, with an operating income margin of -41.66% over the same period. This is reflected in one of the InvestingPro Tips, which states that analysts do not anticipate the company to be profitable this year.
The stock's performance has been challenging, with a 46.62% decline in the past month and a 56.11% drop over the last six months. This volatility is consistent with another InvestingPro Tip, which indicates that the stock generally trades with high price volatility.
Despite these challenges, BlackSky's liquid assets exceed its short-term obligations, suggesting some financial stability in the near term. However, the company is quickly burning through cash, which could be a concern for long-term investors.
For those interested in a more comprehensive analysis, InvestingPro offers 14 additional tips for BlackSky Technology Inc., providing a deeper understanding of the company's financial health and market position.
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