HawkEye 360, Inc.

The following table sets forth a summary of our condensed consolidated results of operations for three months ended June 30, 2026 and 2025.

Revenue

Total revenue increased by $23.2 million, or 87% , to $49.8 million during the three months ended June 30, 2026 from $26.6 million during the three months ended June 30, 2025, primarily driven by the factors discussed below. Revenue from related parties totaled $1.4 million (3% of revenue) for the three months ended June 30, 2026 versus $3.5 million (13% of revenue) for the three months ended June 30, 2025. The decrease in related party revenue is driven by the completion of the IPO, after which the customers were no longer considered related parties.

The following table sets forth a summary of our consolidated revenue by type for the periods indicated, and the changes between comparative periods.

U.S. revenue

U.S. revenue increased by $11.1 million for three months ended June 30, 2026, or 63%, to $28.8 million for the three months ended June 30, 2026 from $17.6 million for the three months ended June 30, 2025. The increase was driven by $14.4 million from the ISA acquisition, partially offset by a $3.2 million decrease in government and other revenue due to reduced sales of radio frequency data.

International revenue

International revenue increased by $12.0 million, or 134% , to $21.0 million for the three months ended June 30, 2026 from $9.0 million for the three months ended June 30, 2025, primarily due to stronger sales of radio frequency data, with contributions from both existing and new customers.

Direct cost of sales, excluding depreciation and amortization

Direct cost of sales increased $9.9 million or 198% to $14.9 million for three months ended June 30, 2026 from $5.0 million for three months ended June 30, 2025. The increase in direct cost of sales was driven primarily by increased headcount, largely attributable to the acquisition of ISA, which accounted for $8.4 million of the year over year increase, and higher stock-based compensation. Direct cost of sales increased as a percentage of revenue from 19% for the three months ended June 30, 2025 three months ended March 31, 2025 to 30% for the three months ended June 30, 2026, primarily driven by increased headcount, largely attributable to the acquisition of ISA.

Indirect cost of sales and other expenses, excluding depreciation and amortization

Indirect cost of sales increased $4.3 million or 1336% to $4.6 million for the three months ended June 30, 2026 from $0.3 million for the three months ended June 30, 2025. The increase in indirect cost of sales was driven primarily by costs related to the acquisition of ISA in late 2025, which accounted for$4.1 millionof the year over year increase.

Selling, general, and administrative (“SG&A”) expenses increased by $16.2 million, or 184% to $25.0 million for the three months ended June 30, 2026 from $8.8 million for the three months ended June 30, 2025. This growth was primarily attributable to higher employee compensation-related costs including stock-based compensation, and professional services costs.

Research and development expenses increased by $2.4 million, or 41% to $8.2 million for the three months ended June 30, 2026, from $5.9 million for the three months ended June 30, 2025. The increase was primarily driven by higher employee compensation-related costs including stock-based compensation

Depreciation and amortization expenses increased by $2.8 million, or 48% to $8.6 million for the three months ended June 30, 2026 from $5.9 million for the three months ended June 30, 2025. The increase was mainly due to $1.8 million in ISA amortization of acquisition-related intangible assets, in addition to a $0.3 million increase in depreciation expense associated with satellite assets.

Interest income increased by $1.9 million, or 203% to $2.9 million for the three months ended June 30, 2026, from $0.9 million for the three months ended June 30, 2025. This increase was mainly due to interest income earned on the cash received in the IPO.

Interest expenses increased by $0.9 million to $0.9 million for the three months ended June 30, 2026 from $17 thousand for the three months ended June 30, 2025. The increase was mainly due to interest expense on the 2025 Loans.

Loss from changes in fair value of financial liabilities

Loss from changes in fair value of financial liabilities was $2.8 million for the three months ended June 30, 2026, as compared to no such losses in the prior year period. The current period loss was primarily driven by change in fair value of warrant liabilities of $2.2 million and change in fair value of contingent and deferred consideration of $0.6 million

Loss from extinguishment of debt

Loss from extinguishment of debt was $2.7 million for the three months ended June 30, 2026, as compared to no such loss in the prior period. The current period loss was driven by the repayment of the Company's 2025 Loans in connection with the IPO and included the write-off of unamortized debt discounts and debt issuance costs.

Other income (expense), net

Other income (expense), net increased$0.2 million for the three months ended June 30, 2026, or 186% to again of $0.1 million for the three months ended June 30, 2026 from a loss of $0.1 million for the three months ended June 30, 2025 The increase was primarily driven by an ISA acquisition related matter.

Results of Operations

The following table sets forth a summary of our condensed consolidated results of operations for six months ended June 30, 2026 and 2025.

Revenue

Total revenue increased by $50.0 million, or 101%, to $99.6 million during the six months ended June 30, 2026 from $49.6 million during the six months ended June 30, 2025, primarily driven by the factors discussed below. Revenue from related parties totaled $6.2 million (6% of revenue) for the six months ended June 30, 2026 versus $8.6 million (17% of revenue) for the six months ended June 30, 2025. The decrease in related party revenue is driven by the completion of the IPO, after which the customers were no longer considered related parties.

The following table sets forth a summary of our consolidated revenue by type for the periods indicated, and the changes between comparative periods.

U.S. revenue

U.S. revenue increased by $25.2 million for six months ended June 30, 2026, or 77%, to $57.7 million for the six months ended June 30, 2026 from $32.5 million for the six months ended June 30, 2025. The increase was driven by$29.3 million from the ISA acquisition, partially offset by a$4.1 million decrease in government and other revenue due to reduced sales of RF data.

International revenue

International revenue increased by $24.8 million, or 145%, to $41.9 million for the six months ended June 30, 2026 from $17.1 million for the six months ended June 30, 2025, primarily due to stronger sales of RF data, with contributions from both existing and new customers.

Direct cost of sales, excluding depreciation andamortization

Direct cost of sales increased $21.1 million, or 214% to $30.9 million for six months ended June 30, 2026 from $9.9 million for six months ended June 30, 2025. The increase in direct cost of sales was driven primarily by the acquisition of ISA, which accounted for $18.5 million of the year over year increase. Direct cost of sales increased as a percentage of revenue from 20% for the six months ended June 30, 2025, to 31% for the six months ended June 30, 2026, primarily driven by increased headcount, largely attributable to the acquisition of ISA.

Indirect cost of sales and other expenses, excluding depreciation and amortization

Indirect cost of sales increased$8.3 million, or 1238% to $8.9 million for the six months ended June 30, 2026 from $0.7 million for the six months ended June 30, 2025. The increase in indirect cost of sales was driven primarily by costs related to the acquisition of ISA, which accounted for$8.0 million of the year over year increase.

Selling, general, and administrative (“SG&A”) expenses increased by $26.4 million, or 158% to $43.1 million for the six months ended June 30, 2026 from $16.7 million for the six months ended June 30, 2025. This growth was primarily attributable to higher compensation, including stock-based compensation, and professional services costs.

Research and development expenses increased by $4.6 million, or 36% to $17.4 million for the six months ended June 30, 2026 from $12.8 million for the six months ended June 30, 2025. The increase was primarily driven by higher employee compensation-related costs, including stock-based compensation.

Depreciation and amortization expenses increased by $5.5 million, or 51% to $16.4 million for the six months ended June 30, 2026 from $10.9 million for the six months ended June 30, 2025. The increase was mainly due to$3.5 million in ISA amortization of acquisition-related intangible assets, in addition to a$0.9 million rise in depreciation expense associated with satellite assets.

Interest income increased by $1.8 million, or 98% to $3.7 million for the six months ended June 30, 2026, compared to $1.9 million for the six months ended June 30, 2025. This increase was mainly due to interest income earned on the cash received in the IPO.

Interest expenses increased by $2.2 million to $2.3 million for the six months ended June 30, 2026 from $35 thousand for the six months ended June 30, 2025.. The increase was mainly due to interest expense on the 2025 Loans.

Loss from changes in fair value of financial liabilities

Loss from changes in fair value of financial liabilities was $5.7 million for the six months ended June 30, 2026, as compared to no such loss in the prior period. The current period loss was primarily driven by change in fair value of warrant liabilities of $4.5 million and change in fair value of contingent and deferred consideration of $1.2 million.

Loss from extinguishment of debt

Loss from extinguishment of debt was $2.7 million for the six months ended June 30, 2026, as compared to no such loss in the prior period. The current period loss was driven by the repayment of the Company's 2025 Loans in connection with the IPO and included the write-off of unamortized debt discounts and debt issuance costs.

Other income (expense), net

Other income (expense), net increased $0.7 million for the six months ended June 30, 2026, or 130% to a gain of $0.2 million for the six months ended June 30, 2026 from a loss of $0.5 million for the six months ended June 30, 2025. The increase was primarily driven by an ISA acquisition related matter.

Liquidity and Capital Resources

We measure liquidity in terms of our ability to fund the cash requirements of our business operations, including working capital needs, capital expenditures, contractual obligations, debt service, acquisitions and other commitments with cash flows from operations and other sources of funding. We have historically financed our operations primarily through cash from operating activities, cash on hand, the issuance of convertible preferred stock and amounts available under our Loan and Security Agreement. Our primary uses of cash are operating expenses, including capital expenditure, personnel salaries and benefits, acquisitions and servicing debt obligations.

Our primary source of liquidity as of June 30, 2026, is our existing cash and cash equivalents of $503.4 million and the $125.0 million aggregate principal amount available from our 2026 Credit Agreement.

We believe that our existing cash and cash equivalents, together with our cash from operations, will be adequate to meet our liquidity requirements for at least twelve months following the date of this Quarterly Report on Form 10-Q. Our future capital requirements will depend on several factors, including our financial performance, which is subject to many economic, commercial, regulatory, financial, and other factors that are beyond our control.

We will also incur significant expenses as a public company that we have not incurred as a private company, including costs associated with public company reporting requirements of the Exchange Act, as well as the corporate governance standards of the Sarbanes-Oxley Act. In the future, we could be required, or may elect, to seek additional funding through the sale of equity securities or debt financing arrangements; however, additional funds may not be available on terms acceptable to us, if at all. Any inability to raise capital could adversely affect our ability to achieve our business objectives.

IPO

On May 8, 2026, the Company closed its IPO and received aggregate gross proceeds of $478.4 million before deducting underwriting discounts and commissions and offering expenses. Our gross proceeds were reduced by $33.5 million of underwriting discounts and commissions and $7.4 million of offering costs. Additionally, in connection with the IPO, the Company used $7.5 million of the net proceeds to fund the deferred payment payable in connection with its December 2025 acquisition of ISA and used $49.5 million to repay all outstanding borrowings and associated fees under the Loan and Security Agreement. The repayment of this debt reduced the Company’s leverage and future debt service obligations and enhanced liquidity available for working capital and other general corporate purposes.

2026 Credit Facility

On May 19, 2026, the Company entered into a new senior secured revolving credit agreement (the “2026 Credit Agreement”) with Bank of America, N.A. The 2026 Credit Agreement provides for a revolving credit facility in an aggregate principal amount of $125.0 million (the “Revolving Credit Facility”), maturing on May 19, 2031. Borrowings under the Revolving Credit Facility bear interest at a variable rate equal to, at the Company’s option, either (i) Term SOFR plus an applicable margin of 2.25% to 3.00% per annum, or (ii) an alternative base rate plus an applicable margin of 1.25% to 2.00% per annum, in each case based on our Total Net Leverage Ratio. A commitment fee ranging from 0.250% to 0.500% per annum applies to unused commitments under the Revolving Credit Facility.

The Revolving Credit Facility is guaranteed by each of our existing and future material domestic subsidiaries and is secured by first-priority liens on substantially all of our and the guarantors’ personal property assets and certain equity interests, subject to customary exceptions. The Credit Agreement contains customary affirmative and negative covenants and requires us to maintain compliance with the following financial covenants, each tested quarterly on a trailing four fiscal quarter basis: ((i) a maximum Total Net Leverage Ratio as defined by the 2026 Credit Agreement, commencing at 3.5 to 1.00, and (ii) a minimum Interest Coverage Ratio as defined by the 2026 Credit Agreement of 3.00 to 1.00. As of the date of this filing, we have no borrowings outstanding under the Revolving Credit Facility and the commitment fees were $36.5 thousand for the three and six months ended June 30, 2026. We intend to use available borrowings for working capital, capital expenditures, strategic investments, and other general corporate purposes.

Prior Loan and Security Agreement

As of June 30, 2026, the Company did not have any outstanding debt. As noted above, subsequent to the IPO, the Company paid of all of its outstanding debt, which consisted of borrowings under the 2025 Mezzanine Loan and 2025 Term Loan.

In connection with the issuance of the 2025 Mezzanine Loan, the Company executed agreements with the Mezzanine Loan lenders to issue certain new warrants (the “2025 Bank Warrants”) to purchase a total of 173,591 shares of common stock at an exercise price of $11.42. The warrants remain outstanding at June 30, 2026.

We also maintain performance bonds in the form of letters of credit for international customers, reported as restricted cash. As of June 30, 2026, the Company had four standby letters of credit from Silicon Valley Bank (the "Bank") outstanding, totaling approximately $5.0 million.

Convertible Preferred Stock and Warrants

On December 18, 2025, the Company entered into an agreement to issue 53,012 shares of Series E Preferred Stock to certain investors at$18.86 per share (the "Series E Per Share Price"). The Company received approximately$1.0 million for these shares on January 14, 2026 and subsequently issued the related shares. On January 9, 2026, we issued and sold an aggregate of 756,754 shares of Series E Preferred Stock to certain investors at the Series E Per Share Price for aggregate gross proceeds of$14.3 million. Additionally, in a closing on February 3, 2026, we issued and sold an aggregate of 5,301 shares of Series E Preferred Stock to certain investors at the Series E Per Share Price for aggregate gross proceeds of$0.1 million, in a closing on February 6, 2026, we issued and sold an aggregate of 74,217 shares of Series E Preferred Stock to certain investors at the Series E Per Share Price for aggregate gross proceeds of$1.4 million, and in a closing on February 23, 2026, we issued and sold an aggregate of 106,025 shares of Series E Preferred Stock to certain investors at the Series E Per Share Price for aggregate gross proceeds of$2.0 million.

In connection to the IPO in May 2026, all 68,987,988 shares of preferred stock outstanding immediately prior to the IPO were converted into 68,987,988 shares of common stock.

Preferred Stock Financing Warrants

In March 2026 an investor exercised 6,521 Preferred Stock Financing Warrants for an aggregate consideration of$0.1 million. In May 2026, prior to the IPO, investors exercised an aggregate of 783,924 Preferred Stock Financing Warrantsfor aggregate consideration of$0.1 million.

In connection with the completion of the IPO discussed in Note 1- Nature of Business and Basis of Presentation, all remaining 3,873,643 Preferred Stock Financing Warrants were net exercised, resulting in the issuance of 3,719,010 shares ofcommon stock.

Bank Warrants

During three and six months ended June 30, 2026, a total of 305,788 warrants were net exercised for the issuance of an aggregate of 291,042 shares of common stock.

Cash Flows

The following table summarizes our cash flows and cash and cash equivalents for the six months ended June 30, 2026 and 2025.

Cash Provided by (Used in) Operating Activities

Net cash provided by (used in) operating activities improved by $11.2 million, or 390%, to net cash provided by $8.4 million for the six months ended June 30, 2026 as compared to a net cash use of $2.9 million for the six months ended June 30, 2025.

The improvement in cash provided by (used) by operating activities is primarily driven by favorable working capital movements, including changes in operating assets and liabilities, and higher non-cash expenses, partially offset by a higher net loss of $24.3 million compared to net income of $20.0 thousand in the prior period.

Cash Provided by (Used in) Investing Activities

Net cash provided by (used in) investing activities decreased by $40.9 million, or 134%, with a net cash use of $10.3 million for the six months ended June 30, 2026 as compared to a net cash provided by investing activities of $30.6 million for the six months ended June 30, 2025. The variance was primarily driven by absence of proceeds from the redemption of short-term investments of $39.7 million in the prior period. In addition, there was a higher use of cash for the purchase of satellites, property and equipment which totaled $10.3 million in the current period, as compared to $9.1 million in the prior period.

Cash Provided by Financing Activities

Net cash provided by financing activities rose to $413.0 million for the six months ended June 30, 2026 as compared to net cash provided by financing activities of $27.0 thousand for the six months ended June 30, 2025. The increase was primarily driven by proceeds from the issuance of common stock of $478.4 million pursuant to the IPO. In addition, proceeds from the issuance of preferred stock of $18.8 million and from the exercise of stock options and warrants of $3.8 million further contributed to the increase in the current period. These inflows were partially offset by payments for offering costs and the repayment of the 2025 Loans.

Off-Balance Sheet Arrangements

As of June 30, 2026, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Critical Accounting Estimates

Our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP. Preparation of the financial statements requires management to make judgments, estimates, and assumptions that impact the reported amount of net sales and expenses, assets and liabilities, and the disclosure of contingent assets and liabilities. We consider an accounting judgment, estimate, or assumption to be critical when the estimate or assumption is complex in nature or requires a high degree of judgment and the use of different judgments, estimates, and assumptions could have a material impact on our condensed consolidated financial statements. We periodically review our estimates and make adjustments when facts and circumstances dictate. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected.

Business Combinations

We account for business combinations under the acquisition method of accounting. Under this method, acquired assets, including separately identifiable intangible assets, and any assumed liabilities are recorded at their acquisition date estimated fair value. The excess of purchase price over the fair value amounts assigned to the assets acquired and liabilities assumed is recorded as goodwill. When the consideration transferred by us in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition date fair value and included as part of the consideration transferred in the business combination with subsequent fair value adjustments recorded in results of operations. These fair value determinations require judgment and involve the use of significant estimates and assumptions, including assumptions with respect to the selection of valuation methodologies, estimates of future cash inflows and outflows, discount rates, and selection of comparable companies. During the measurement period, which may be up to one year from the acquisition date, if the initial accounting for a business combination is incomplete, we may record adjustments to the fair value of assets acquired and liabilities assumed, with a corresponding offset to goodwill. Transaction expenses incurred in connection with a business combination, other than costs associated with the issuance of debt or equity securities, are expensed as incurred. The operating results of acquired businesses are included in our results of operations beginning as of their effective acquisition dates.

Revenue recognition

We generate revenue primarily from contractual arrangements with the U.S. Government, prime contractors, and international customers in the intelligence, defense, maritime awareness, and crisis response sectors. Our sales are derived from a diverse stream of offerings, including mapping products that utilize our proprietary algorithms to analyze and track radio waves, on-demand access to archived data, subscription-based future data services and professional services that leverage our geospatial and intelligence expertise. We also provide engineering services, systems integration and mission support. To a lesser extent, we also partner with resellers, including exclusive resellers, who market our data products to end users, primarily in international locations where we are legally-obligated to work with a local partner.

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. To the extent a contract includes multiple promised goods and services, we apply judgment to determine whether promised goods and services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation.

Transaction prices include fixed fees, reimbursable costs and variable consideration such as award fees, which are estimated at inception and updated as performance criteria are assessed. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. For arrangements with multiple performance obligations, which represent promises within an arrangement that are distinct, we allocate revenue to all distinct performance obligations based on their relative stand-alone selling prices (“SSPs”), unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation.

We typically have more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we may use information such as the nature of the customer and distribution channel in determining the SSP. When available, we use observable prices to determine SSPs. When observable prices are not available, we typically determine the SSP using an adjusted market assessment approach using information that may include market conditions and other observable inputs.

Certain performance obligations are recognized over time using a cost-based input method to measure progress towards completion. For these arrangements, revenue is recognized based on the ratio of costs incurred to date relative to total estimated costs at completion.

Management’s estimates of total costs to be incurred and variable revenue to be earned are significant inputs, are highly subjective and dependent on past experience and operations. Estimating total contract costs requires significant judgment and consideration of numerous factors, including labor utilization, subcontractor performance, material costs, technical complexity, schedule changes, cost efficiencies, and other risks associated with contract execution.

Management reviews contract estimates on a regular basis and revises them as facts and circumstances change. Changes in estimates of total contract costs, contract revenues, or the measure of progress toward completion are recognized on a cumulative catch-up basis in the period the changes are identified.

Stock-based compensation

Prior to the IPO, we were required to estimate the fair value of the common stock underlying our equity awards when performing fair value calculations. Due to the absence of a public trading market, the fair value of our common stock underlying our stock-based awards had historically been determined by our Board, with input from management and contemporaneous independent third-party valuations.

Subsequent to the IPO, judgment will continue to be required for inputs to calculate the fair value of certain stock based awards. Such inputs could include volatility and expected term.

Fair Value of Warrants

We used a market approach to estimate our enterprise value and then allocated the enterprise value to the liability-classified warrants using an option-pricing model. We are required to estimate the fair value of the common stock underlying the warrants when performing fair value calculations.

Recently Issued and Adopted Accounting Standards

Recently issued and adopted accounting pronouncements are described in Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Emerging Growth Company Accounting Election

We are an “emerging growth company” under the JOBS Act, which permits us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to use this extended transition period until we are no longer an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period. As a result, our financial results may not be comparable to companies that comply with new or revised accounting pronouncements applicable to public companies.