BlackSky Technology Inc.

Previous wording

Results of Operations for the Three Months Ended March 31, 2025 and 2024

Current wording

Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024

Previous wording

The following table provides the components of results of operations for the three months ended March 31, 2025 and 2024:

Current wording

The following table provides the components of results of operations for the three and six months ended June 30, 2025 and 2024:

Previous wording

Professional and engineering services revenue increased for the three months ended March 31, 2025, as compared to the same period in 2024, primarily due to a new contract for the delivery of one Earth observation satellite. The increase was partially offset by a decrease in revenue in two existing contracts caused by differences in the progress of revenue recognition as these long-term contracts are in various stages of completion. Professional and engineering services revenue contains estimates that can result in the recognition of revenue in a current period for performance obligations which were satisfied or partially satisfied in a prior period. For the impacts of changes in estimates on our contracts, see Note 2—“Basis of Presentation and Summary of Significant Accounting Policies” of the notes to the consolidated financial statements contained within this Quarterly Report on Form 10-Q.

Current wording

Professional and engineering services revenue decreased for the three months ended June 30, 2025, as compared to the same period in 2024, primarily from a difference in the progress of revenue recognition of long-term contracts that are in various stages of completion. Professional and engineering services revenue contains estimates that can result in the recognition of revenue in a current period for performance obligations which were satisfied or partially satisfied in a prior period. For the impacts of changes in estimates on our contracts, see Note 2—“Basis of Presentation and Summary of Significant Accounting Policies” of the notes to the consolidated financial statements contained within this Quarterly Report on Form 10-Q.

Previous wording

Professional & engineering service costs, excluding depreciation and amortization, increased for the three months ended March 31, 2025 as compared to the same period in 2024, primarily due to a one-time impact of incurred work in process costs under a satellite procurement contract that began in the first quarter of 2025.

Current wording

Professional & engineering service costs, excluding depreciation and amortization, increased for the six months ended June 30, 2025 as compared to the same period in 2024, primarily due to a one-time impact of incurred work in process costs under a satellite procurement contract that began in the first quarter of 2025. This increase was partially offset by fewer direct material costs incurred on a professional services contract, related to the program's maturity year-over-year.

Previous wording

Selling, general, and administrative expenses increased during the three months ended March 31, 2025 as compared to the same period in 2024. Salaries and benefit costs increased primarily due to workforce acquired in our acquisition of LeoStella in the fourth quarter of 2024. Professional fees increased as a result of transaction costs associated with finalizing the business acquisition in late 2024. Information technology and other administrative expenses increased primarily due to investments to optimize corporate business and operational systems. These increases were partially offset by a decrease in stock-based compensation that was due to the acceleration of expense for stock options that were voluntarily forfeited during the first quarter of 2024. We expect for selling, general, and administrative expenses to continue to trend higher in 2025 as compared to what was incurred in 2024 as a result of headcount increases and the ongoing integration of LeoStella into our operations.

Current wording

Selling, general, and administrative expenses increased during the three and six months ended June 30, 2025 as compared to the same period in 2024. Salaries and benefit costs increased primarily due to workforce acquired in our acquisition of LeoStella in the fourth quarter of 2024. Stock-based compensation increased as a result of the issuance of stock awards since June 30, 2024. Information technology and other administrative expenses increased primarily due to investments to optimize corporate business and operational systems. Professional fees increased as a result of transaction costs associated with finalizing the business acquisition in late 2024. We expect for selling, general, and administrative expenses to continue to trend higher in 2025 as compared to what was incurred in 2024 as a result of headcount increases and the integration of LeoStella into our operations.

Previous wording

Depreciation expense from satellites decreased for the three months ended March 31, 2025 as compared to the same period in 2024 as satellites launched in 2021 became fully depreciated. We expect for depreciation expense to begin to increase in the remainder of 2025 as additional Gen-3 satellites are launched and placed into service.

Current wording

Depreciation expense from satellites decreased for the three and six months ended June 30, 2025 as compared to the same periods in 2024 as a number of Gen-2 satellites became fully depreciated. These decreases were partially offset by increases related to depreciation expense for our two Gen-3 satellites that were launched in the first half of 2025. We expect to incur additional depreciation expense when each Gen-3 satellite is launched and placed into service.

Previous wording

Depreciation expense from all other property and equipment increased for the three months ended March 31, 2025 as compared to the same period in 2024, primarily driven by the depreciation of increased asset balances for internal-use software.

Current wording

Depreciation expense from all other property and equipment increased for the three and six months ended June 30, 2025 as compared to the same periods in 2024, primarily driven by the depreciation of increased asset balances for internal-use software.

Previous wording

Amortization expense increased for the three months ended March 31, 2025 as compared to the same period in 2024 as a result of intangible assets acquired by the Company in the fourth quarter of 2024.

Current wording

Amortization expense increased for the three and six months ended June 30, 2025 as compared to the same periods in 2024 as a result of intangible assets acquired by the Company in the fourth quarter of 2024.

Previous wording

Fluctuations in our equity warrants and other equity instruments that we classify as derivative liabilities in the unaudited condensed consolidated balance sheets and measure at fair value are significantly driven by our common stock price. Fluctuations to these instruments are inversely related to changes in our common stock price, the volatility of the markets, and the duration of the equity warrants. The gains or losses recognized in the period are non-cash fair value adjustments. These instruments generated a gain during the three months ended March 31, 2025 versus a loss during the three months ended March 31, 2024.

Current wording

Fluctuations in our equity warrants and other equity instruments that we classify as derivative liabilities in the unaudited condensed consolidated balance sheets and measure at fair value are significantly driven by our common stock price. Fluctuations to these instruments are inversely related to changes in our common stock price, the volatility of the markets, and the duration of the equity warrants. The gains or losses recognized in the period are non-cash fair value adjustments. These instruments generated a loss during the three and six months ended June 30, 2025 versus a gain during the three and six months ended June 30, 2024.

Previous wording

Interest income increased during the three months ended March 31, 2025 as a result of higher short-term investment balances during the period as compared to the same period in 2024.

Current wording

Interest income increased during the three and six months ended June 30, 2025 as a result of higher short-term investment balances during the period as compared to the same periods in 2024.

Previous wording

Interest expense increased during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, as a result of more debt outstanding during the three months ended March 31, 2025, as compared to the same period in 2024. Our outstanding debt increased mainly due to non-cash transactions for the transfer of paid-in-kind interest in 2024 and the financing of launch invoices during the past twelve months.

Current wording

Interest expense increased during the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, as a result of more debt outstanding during the three and six months ended June 30, 2025, as compared to the same periods in 2024. Our outstanding debt increased mainly due to the capitalization of paid-in-kind interest in 2024 and May 2025 and the financing of launch invoices during the past twelve months.

Previous wording

The table below reconciles our net loss to Adjusted EBITDA for the three months ended March 31, 2025 and 2024:

Current wording

The table below reconciles our net loss to Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024:

Previous wording

As of March 31, 2025, our existing sources of liquidity included cash and cash equivalents and short-term investments. Our cash and cash equivalents excluding restricted cash totaled $20.7 million and $13.1 million as of March 31, 2025 and December 31, 2024, respectively, and our short-term investments totaled $55.1 million and $39.4 million as of March 31, 2025 and December 31, 2024, respectively. We have incurred year to date losses and generated negative cash flows from operations since our inception in September 2014. As of March 31, 2025, we had an accumulated deficit of $669.0 million.

Current wording

As of June 30, 2025, our existing sources of liquidity included cash and cash equivalents and short-term investments. Our cash and cash equivalents excluding restricted cash totaled $22.6 million and $13.1 million as of June 30, 2025 and December 31, 2024, respectively, and our short-term investments totaled $71.2 million and $39.4 million as of June 30, 2025 and December 31, 2024, respectively. We have incurred year to date losses and generated negative cash flows from operations since our inception in September 2014. As of June 30, 2025, we had an accumulated deficit of $710.2 million.

Previous wording

Our short-term liquidity as of March 31, 2025 was $77.0 million. We expect cash and cash equivalents and cash generated from operating activities to be sufficient to meet our working capital and capital expenditure needs for the foreseeable future. Our future long-term capital requirements will depend on many factors, including our Gen-3 satellite production needs, launch costs and increased insurance costs, as well as our growth rate, customer demand for capacity, the timing and extent of spending to support solution development efforts, the expansion of sales and marketing activities, the ongoing investments in technology infrastructure, the introduction of new and enhanced solutions, and the continuing market acceptance of our solutions.

Current wording

Our short-term liquidity as of June 30, 2025 was $94.9 million. We expect cash and cash equivalents and cash generated from operating activities to be sufficient to meet our working capital and capital expenditure needs for the foreseeable future. Our future long-term capital requirements will depend on many factors, including our Gen-3 satellite production needs, launch costs and increased insurance costs, as well as our growth rate, customer demand for capacity, the timing and extent of spending to support solution development efforts, the expansion of sales and marketing activities, the ongoing investments in technology infrastructure, the introduction of new and enhanced solutions, and the continuing market acceptance of our solutions.

Previous wording

Additionally, we have a vendor financing agreement for multiple satellite launches providing for $27.0 million, of which a portion will be drawn down equally per satellite launch and will be repaid quarterly on a pro-rata basis across a three-year period after each successful launch milestone. Payments will accrue interest at 12.6% per annum, beginning on each launch date. As of March 31, 2025, we estimate we will repay approximately $3.8 million of short-term debt related to the vendor financing agreement in the next 12 months. We may prepay at any time until the maturity date without premium or penalty. See Note 9—“Debt and Other Financing” of the notes to the consolidated financial statements for further information on our debt and financing arrangements and Note 15 - “Commitments and Contingencies” of the notes to the consolidated financial statements for further information on our contractual obligations.

Current wording

We also have a vendor financing agreement for multiple satellite launches providing for $27.0 million, of which a portion will be drawn down equally per satellite launch and will be repaid quarterly on a pro-rata basis across a three-year period after each successful launch milestone. Payments will accrue interest at 12.6% per annum, beginning on each launch date. As of June 30, 2025, we have financed $16.5 million out of our $27.0 million vendor financing agreement, and we estimate we will repay approximately $5.3 million of short-term debt related to the agreement in the next 12 months. We may prepay at any time until the maturity date without premium or penalty.

Previous wording

Our equity issuances during the three months ended March 31, 2025 included an at-the-market (“ATM”) offering. We have the ability to offer and sell from time to time up to $75.0 million of newly issued shares in open trading windows at market prices through a designated broker dealer pursuant to an ATM offering program, of which we sold $5.4 million during the three months ended March 31, 2025.

Current wording

During the six months ended June 30, 2025, we issued and sold shares as a part of the Company's at-the-market (“ATM”) offering. We have the ability to offer and sell from time to time up to $75.0 million of newly issued shares in open trading windows at market prices through a designated broker dealer pursuant to an ATM offering program, of which we sold $42.5 million during the six months ended June 30, 2025.

Previous wording

We have current contract assets of $32.4 million and we anticipate receiving this amount in payments over the next 12 months as interim milestones on a few major customer contracts are met and expected to be billed, further enhancing our liquidity.

Current wording

We have current contract assets of $33.2 million and we anticipate receiving this amount in payments over the next 12 months as interim milestones on a few major customer contracts are met and expected to be billed, further enhancing our liquidity.

Previous wording

We cannot be sure our revenues will exceed expenses in the near term due to the ongoing investments we are making in sales, marketing and products to increase our market share. We expect to continue to incur capital expenditures as we procure and launch Gen-3 satellites, as well as invest in our BlackSky Spectra software platform tosignificantly expand our product capabilities in the future.

Current wording

We cannot be sure our revenues will exceed expenses in the near term due to the ongoing investments we are making in sales, marketing and products to increase our market share. We expect to continue to incur capital expenditures as we procure, build, and launch Gen-3 satellites, as well as invest in our BlackSky Spectra software platform tosignificantly expand our product capabilities in the future.

Previous wording

As of March 31, 2025, our current assets were $121.3 million, consisting primarily of short-term investments, contract assets, accounts receivable, and cash and cash equivalents.

Current wording

As of June 30, 2025, our current assets were $138.8 million, consisting primarily of short-term investments, contract assets, and cash and cash equivalents.

Previous wording

As of March 31, 2025, our current liabilities were $32.0 million, consisting primarily of accounts payable and accrued liabilities. Accordingly, we have sufficient cash and working capital to fund our short-term liquidity requirements.

Current wording

As of June 30, 2025, our current liabilities were $37.4 million, consisting primarily of contract liabilities, the current portion of our debt, and accounts payable and accrued liabilities. Accordingly, we have sufficient cash and working capital to fund our short-term liquidity requirements.

Previous wording

We anticipate that our most significant long-term liquidity and capital needs will relate to continued funding of operations, satellite development capital expenditures, launch capital expenditures, and ongoing investments to optimize our BlackSky Spectra software platform and corporate business and operational systems that will enable us to continue to scale the business efficiently and securely. We can manage the timing for a large part of our capital expenditures, including the design, build, and launch of our new satellites currently under development, to provide us with additional flexibility to optimize our long-term liquidity requirements. Macroeconomic conditions and credit markets could also impact the availability and/or the cost of potential future debt or equity financing.

Current wording

We anticipate that our most significant long-term liquidity and capital needs will relate to continued funding of operations, satellite development capital expenditures, launch capital expenditures, and ongoing investments to optimize our BlackSky Spectra software platform and corporate business and operational systems that will enable us to continue to scale the business efficiently and securely. Upcoming satellite development capital expenditures will include plans to expand our current high frequency monitoring constellation with multispectral, large-area collection satellites. These new satellites will be designed to support country scale digital mapping, navigation, maritime and 3D digital twin applications. We can manage the timing for a large part of our capital expenditures, including the design, build, and launch of our new satellites currently under development, to provide us with additional flexibility to optimize our long-term liquidity requirements. Macroeconomic conditions and credit markets could also impact the availability and/or the cost of potential future debt or equity financing.

Previous wording

The following table provides a summary of cash flow data for the three months ended March 31, 2025 and 2024. Our short-term liquidity at March 31, 2025 was $77.0 million. Short-term investments of $55.1 million are not classified as cash, cash equivalents, or restricted cash.

Current wording

The following table provides a summary of cash flow data for the six months ended June 30, 2025 and 2024. Our short-term liquidity at June 30, 2025 was $94.9 million. Short-term investments of $71.2 million are not classified as cash, cash equivalents, or restricted cash.

Previous wording

For the three months ended March 31, 2025, net cash provided by operating activities was $27.2 million. The significant decrease in cash used during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 was due to an increase in the net cash provided by working capital. The increase in cash provided by working capital was largely related to a cash payment for capacity for future purchase orders that was recorded as deferred revenue as of March 31, 2025 in our unaudited condensed consolidated balance sheets.

Current wording

For the six months ended June 30, 2025, net cash provided by operating activities was $20.0 million. The change was due to an increase in the net cash provided by working capital that was largely related to a cash payment for capacity for future purchase orders that was recorded as deferred revenue as of June 30, 2025 in our unaudited condensed consolidated balance sheets.

Previous wording

The change in net cash used in investing activities was primarily due to increased purchases of short-term investments in government securities of $28.3 million during the three months ended March 31, 2025 partially offset by the redemption and maturity of $13.0 million of these types of securities during the same period. Comparatively, during the three months ended March 31, 2024, we purchased $9.5 million of short-term investments to replace maturing investments and recognized $9.0 million related to the redemption and maturity of short-term investments.

Current wording

The change in net cash used in investing activities was primarily due to increased purchases of short-term investments in government securities of $57.0 million during the six months ended June 30, 2025 compared to $13.5 million of purchases during the six months ended June 30, 2024.

Previous wording

We continue to have significant cash outflows for satellite procurement and launch related services and incur labor costs for internally developed capitalized software as we add innovative new services and tools to our BlackSky Spectra software platform and our corporate business and operational systems. The total amount paid for capital expenditures decreased during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The decrease resulted from payments to LeoStella as a third party in 2024 as compared to the internal operation costs with LeoStella consolidated as a wholly-owned subsidiary in 2025. We expect for cash outflows for satellite production to increase as we continue to build out our Gen-3 constellation.

Current wording

We continue to have significant cash outflows for satellite procurement and launch related services and incur labor costs for internally developed capitalized software as we add innovative new services and tools to our BlackSky Spectra software platform and our corporate business and operational systems. The total amount paid for capital expenditures decreased during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. The decrease resulted from payments to LeoStella as a third party in 2024 as compared to the internal operation costs with LeoStella consolidated as a wholly-owned subsidiary in 2025. We expect for cash outflows for satellite production to increase as we continue to build out our Gen-3 constellation.

Previous wording

The most significant impact on the change in net cash provided by financing activities was the receipt of $5.1 million in proceeds from our equity issuances, net of equity issuance costs, in the three months ended March 31, 2025 as compared to $1.3 million in the three months ended March 31, 2024. Our equity issuances during the three months ended March 31, 2025 consisted of the sale of 0.6 million shares under our ATM offering program which resulted in $5.4 million in gross proceeds, as compared to the sale of 0.1 million shares in the three months ended March 31, 2024, which resulted in $1.4 million in gross proceeds.

Current wording

The most significant impact on the change in net cash provided by financing activities was the receipt of $40.9 million in proceeds from our equity issuances, net of equity issuance costs, in the six months ended June 30, 2025 as compared to $2.9 million in the six months ended June 30, 2024. Our equity issuances during the six months ended June 30, 2025 consisted of the sale of 3.7 million shares under our ATM offering program which resulted in $42.5 million in gross proceeds, as compared to the sale of 0.3 million shares in the six months ended June 30, 2024, which resulted in $3.2 million in gross proceeds. The six months ended June 30, 2024 also included borrowings from our revolving credit facility of 20.0 million.

Previous wording

Expected Term—For options granted since 2021, as there is not a significant history of option exercises as a public company, we consider the option vesting terms and contractual period, as well as the demographics of the holders, in estimating the expected term. For options granted prior to 2021 when we were a private company, the expected term was the estimated duration to a liquidation event based on a weighted average consideration of the most likely exit prospects for that stage of development. We will continue to review our estimate in the future and adjust it, if necessary, due to changes in our historical exercises.

Current wording

Expected Term—For options granted since 2021, as there is not a significant history of option exercises as a public company, we consider the option vesting terms and contractual period, as well as the demographics of the holders, in estimating the expected term. We will continue to review our estimate in the future and adjust it, if necessary, due to changes in our historical exercises.

Previous wording

We have classified the Private Placement Warrants issued in October 2019 and March 2023 and the Osprey pre-merger Class B common shares that were exchanged for shares of our Class A common stock (the "Sponsor Shares") as long-term liabilities in our unaudited condensed consolidated balance sheets as of March 31, 2025 and 2024. The Private Placement Warrants issued in October 2019 and the Sponsor Shares were initially recorded at fair value on the date of the merger and the Private Placement Warrants issued in March 2023 were recorded at fair value on the date of issuance. The Private Placement Warrants were recorded at fair value using a Black-Scholes option pricing model and the Sponsor Shares were recorded at fair value using a Monte Carlo simulation model. These liabilities are re-measured to fair value at each subsequent reporting date and recorded to gain (loss) on derivatives in our unaudited condensed consolidated statements of operations and comprehensive loss. We will continue to adjust the liability for changes in fair value until the financial instruments are exercised, redeemed, cancelled or released.

Current wording

We have classified the Private Placement Warrants issued in October 2019 and March 2023 and the Osprey pre-merger Class B common shares that were exchanged for shares of our Class A common stock (the "Sponsor Shares") as long-term liabilities in our unaudited condensed consolidated balance sheets as of June 30, 2025 and 2024. The Private Placement Warrants issued in October 2019 and the Sponsor Shares were initially recorded at fair value on the date of the merger and the Private Placement Warrants issued in March 2023 were recorded at fair value on the date of issuance. The Private Placement Warrants were recorded at fair value using a Black-Scholes option pricing model and the Sponsor Shares were recorded at fair value using a Monte Carlo simulation model. These liabilities are re-measured to fair value at each subsequent reporting date and recorded to (loss) gain on derivatives in our unaudited condensed consolidated statements of operations and comprehensive loss. We will continue to adjust the liability for changes in fair value until the financial instruments are exercised, redeemed, cancelled or released.