Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BlackSky Technology Inc (BKSY, Financial) reported strong year-over-year revenue growth of 22%, driven by new contract awards and expansions.
- The company secured new and follow-on contracts valued at up to $780 million, marking one of the strongest quarters for bookings in the past two years.
- BlackSky raised over $45 million in growth capital, fully funding their baseline Gen-3 constellation and strengthening their balance sheet.
- The company achieved its fourth consecutive quarter of positive adjusted EBITDA, highlighting strong operating leverage and high-margin revenue streams.
- BlackSky was honored with the 2024 Leading Earth Observation Business Award by Nova Space, recognizing its innovative contributions to the global space sector.
Negative Points
- There were timing delays in Q3 related to new customer contract wins, causing some revenue to be pushed into Q4.
- The company faces lumpiness in revenue recognition due to milestone-driven contracts, impacting quarterly financial performance.
- Despite strong bookings, there is uncertainty surrounding the timing of contract execution and revenue recognition, affecting financial projections.
- The integration of Optical Intersatellite Link (OISL) technology into Gen-3 satellites presents potential challenges in implementation and cost management.
- BlackSky's reliance on government contracts means that sales cycles remain lengthy and subject to geopolitical influences, which can delay revenue realization.
Q & A Highlights
Q: Can you quantify how much revenue was pushed from Q3 to Q4?
A: As mentioned, some revenues were pushed into the quarter due to milestone-driven contracts. This is natural for the business, and we expect to deliver a strong fourth quarter and remain in line with our guidance. - Brian O'Toole, CEO
Q: How much of the Q3 bookings activity was related to Gen 3 capacity?
A: None of the Q3 bookings were specifically related to Gen 3. The bookings were primarily driven by our current capabilities, particularly our software and AI analytics. We have secured Gen 3 contracts, but they are driven by software and AI. - Brian O'Toole, CEO
Q: What does the cadence of the $26 million in milestone payments look like over the next 12 months?
A: The payments are tied to milestone-based contracts, which are all different, so you won't see smooth recognition. We expect these to come in over the next 12 months, but they are somewhat lumpy. - Henry Dubois, CFO
Q: With Gen 3 launches coming up, will there be any changes in OpEx or costs directly tied to managing Gen 3?
A: We are maintaining our guidance for this year, and there shouldn't be any significant changes in costs. Gen 3 uses the same ground network and infrastructure, so no significant changes are expected. - Henry Dubois, CFO
Q: Are you seeing any changes in the sales cycle due to geopolitical factors?
A: We are seeing growing demand, reflected in the contracts we're winning and the backlog we're building. The sales cycles remain typical for government contracts, both in the US and internationally. - Brian O'Toole, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
