BlackSky Reports Second Quarter 2022 Results

About BlackSky Technology Inc.

BlackSky is a leading provider of real-time geospatial intelligence. BlackSky delivers on-demand, high frequency imagery, monitoring and analytics of the most critical and strategic locations, economic assets and events in the world.

BlackSky designs, owns and operates one of the industry’s leading low earth orbit small satellite constellations, optimized to capture imagery cost-efficiently where and when our customers need it. BlackSky’s Spectra AI software platform processes data from BlackSky’s constellation and from other third-party sensors to develop the critical insights and analytics that our customers require.

BlackSky is relied upon by 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 Twitter.

Non-GAAP Financial Measures

Adjusted EBITDA is defined as net income or loss attributable to BlackSky before interest expense, income taxes, depreciation and amortization, as well as significant non-cash and/or non-recurring expenses as management believes these items are not as useful in evaluating the Company’s core operating performance. These items include, but are not limited to, realized loss on conversion of bridge notes, stock-based compensation expense, unrealized (gain)/loss on certain warrants/shares classified as derivatives, satellite impairment loss, (gain)/loss on debt extinguishment, (gain)/loss from discontinued operations, severance, loss/(gain) on equity method investment, transaction related legal settlements, and transaction costs associated with derivative liabilities.

Adjusted EBITDA is a non-GAAP financial performance measure. It 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 SEC filings for a reconciliation of Adjusted EBITDA to Net Loss, the most comparable measures reported in accordance with GAAP and for a discussion of the presentation, comparability, and use of Adjusted EBITDA.

Forward-Looking Statements

Certain statements and other information included in this 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. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks, and uncertainties, as well as other statements referring to or including forward-looking information included in this release.

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 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, the risk factors and other disclosures about BlackSky and its business included in BlackSky's disclosure materials filed from time to time with the U.S. Securities and Exchange Commission ("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 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 release or other specified date and speak only as of such date. BlackSky disclaims any intention or obligation to update or revise any forward-looking statements in this release as a result of new information or future events, except as may be required under applicable securities law.

BLACKSKY TECHNOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

(unaudited)

(in thousands)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Revenue

 

 

 

 

 

 

 

Imagery & software analytical services

$

13,350

 

 

$

5,118

 

 

$

23,122

 

 

$

11,116

 

Engineering & systems integration

 

1,752

 

 

 

2,247

 

 

 

5,876

 

 

 

3,543

 

Total revenue

 

15,102

 

 

 

7,365

 

 

 

28,998

 

 

 

14,659

 

Imagery & software analytical service costs, excluding depreciation and amortization

 

5,350

 

 

 

4,171

 

 

 

11,257

 

 

 

8,550

 

Engineering & systems integration costs, excluding depreciation and amortization

 

4,436

 

 

 

2,237

 

 

 

9,484

 

 

 

3,367

 

Selling, general and administrative

 

17,739

 

 

 

8,827

 

 

 

40,275

 

 

 

17,305

 

Research and development

 

106

 

 

 

 

 

 

252

 

 

 

28

 

Depreciation and amortization

 

9,177

 

 

 

3,537

 

 

 

16,568

 

 

 

6,301

 

Satellite impairment loss

 

 

 

 

18,407

 

 

 

 

 

 

18,407

 

Operating loss

 

(21,706

)

 

 

(29,814

)

 

 

(48,838

)

 

 

(39,299

)

(Loss) gain on derivatives

 

(4,646

)

 

 

(967

)

 

 

3,494

 

 

 

(14,975

)

Income on equity method investment

 

1,213

 

 

 

767

 

 

 

1,470

 

 

 

963

 

Interest income

 

178

 

 

 

 

 

 

178

 

 

 

 

Interest expense

 

(1,275

)

 

 

(1,270

)

 

 

(2,530

)

 

 

(2,438

)

Other expense, net

 

(42

)

 

 

(3,279

)

 

 

(40

)

 

 

(147,370

)

Loss before income taxes

 

(26,278

)

 

 

(34,563

)

 

 

(46,266

)

 

 

(203,119

)

Income tax (expense) benefit

 

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations

 

(26,278

)

 

 

(34,563

)

 

 

(46,266

)

 

 

(203,119

)

Discontinued operations:

 

 

 

 

 

 

 

Loss from discontinued operations (including loss from disposal of Spaceflight Inc. of $0, $1,022, $0, and $1,022 for the three and six months ended June 30, 2022 and 2021, respectively)

 

 

 

 

(1,022

)

 

 

 

 

 

(1,022

)

Income tax (expense) benefit

 

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations, net of income taxes

 

 

 

 

(1,022

)

 

 

 

 

 

(1,022

)

Net loss

 

(26,278

)

 

 

(35,585

)

 

 

(46,266

)

 

 

(204,141

)

Other comprehensive loss

 

 

 

 

(1,930

)

 

 

 

 

 

(541

)

Total comprehensive loss

$

(26,278

)

 

$

(37,515

)

 

$

(46,266

)

 

$

(204,682

)

 

 

 

 

 

 

 

 

Basic and diluted loss per share of common stock:

 

 

 

 

 

 

 

Loss from continuing operations

$

(0.22

)

 

$

(0.61

)

 

$

(0.40

)

 

$

(3.87

)

Loss from discontinued operations, net of income taxes

 

 

 

 

(0.02

)

 

 

 

 

 

(0.02

)

Net loss per share of common stock

$

(0.22

)

 

$

(0.63

)

 

$

(0.40

)

 

$

(3.89

)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - basic and diluted

 

118,112

 

 

 

56,704

 

 

 

116,803

 

 

 

52,434

 

 

BLACKSKY TECHNOLOGY INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except par value)

 

 

June 30,

 

December 31,

 

2022

 

2021

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

64,827

 

 

$

165,586

 

Restricted cash

 

2,518

 

 

 

2,518

 

Short-term investments

 

43,833

 

 

 

 

Accounts receivable, net of allowance of $0 and $39, respectively

 

3,417

 

 

 

2,629

 

Prepaid expenses and other current assets

 

4,275

 

 

 

6,264

 

Contract assets

 

5,502

 

 

 

1,678

 

Total current assets

 

124,372

 

 

 

178,675

 

Property and equipment - net

 

83,899

 

 

 

70,551

 

Goodwill

 

9,393

 

 

 

9,393

 

Investment in equity method investees

 

5,159

 

 

 

4,002

 

Intangible assets - net

 

2,199

 

 

 

2,480

 

Satellite procurement work in process

 

35,761

 

 

 

40,102

 

Other assets

 

346

 

 

 

560

 

Total assets

$

261,129

 

 

$

305,763

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

$

13,877

 

 

$

10,837

 

Amounts payable to equity method investees

 

1,537

 

 

 

5,613

 

Contract liabilities - current

 

4,931

 

 

 

11,266

 

Other current liabilities

 

2,835

 

 

 

2,819

 

Total current liabilities

 

23,180

 

 

 

30,535

 

Liability for estimated contract losses

 

3,384

 

 

 

6,054

 

Long-term contract liabilities

 

 

 

 

568

 

Derivative liabilities

 

13,431

 

 

 

16,925

 

Long-term debt - net of current portion

 

72,425

 

 

 

71,408

 

Other liabilities

 

5,162

 

 

 

653

 

Total liabilities

 

117,582

 

 

 

126,143

 

Commitments and contingencies

 

 

 

Stockholders’ equity:

 

 

 

Class A common stock, $0.0001 par value-authorized, 300,000 shares; issued, 120,926 and 117,160 shares; outstanding, 118,453 shares and 114,452 shares as of June 30, 2022 and December 31, 2021, respectively.

 

12

 

 

 

11

 

Additional paid-in capital

 

660,710

 

 

 

650,518

 

Accumulated deficit

 

(517,175

)

 

 

(470,909

)

Total stockholders’ equity

 

143,547

 

 

 

179,620

 

Total liabilities and stockholders’ equity

$

261,129

 

 

$

305,763

 

 

 

 

 

BLACKSKY TECHNOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

 

 

Six Months Ended June 30,

 

2022

 

2021

Cash flows from operating activities:

 

 

 

Net loss

$

(46,266

)

 

$

(204,141

)

Loss from discontinued operations, net of income taxes

 

 

 

 

(1,022

)

Loss from continuing operations

 

(46,266

)

 

 

(203,119

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Depreciation and amortization expense

 

16,568

 

 

 

6,301

 

Bad debt expense

 

(1

)

 

 

4

 

Stock-based compensation expense

 

13,226

 

 

 

772

 

Loss on issuance of 2021 convertible Bridge Notes

 

 

 

 

96,476

 

Loss on issuance of 2021 convertible Bridge Notes Rights Offering

 

 

 

 

3,193

 

Issuance costs for derivative liabilities and debt carried at fair value

 

 

 

 

47,718

 

Amortization of debt discount and issuance costs

 

1,018

 

 

 

823

 

Gain on equity method investment

 

(1,470

)

 

 

(963

)

Loss on disposal of property and equipment

 

 

 

 

24

 

(Gain) loss on derivatives

 

(3,494

)

 

 

14,975

 

Satellite impairment loss

 

 

 

 

18,407

 

Other, net

 

16

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(787

)

 

 

(1,293

)

Contract assets

 

(3,824

)

 

 

1,151

 

Prepaid expenses and other current assets

 

1,914

 

 

 

(405

)

Other assets

 

(30

)

 

 

(150

)

Accounts payable and accrued liabilities

 

389

 

 

 

(2,604

)

Other current liabilities

 

16

 

 

 

(2,067

)

Contract liabilities - current and long-term

 

(6,903

)

 

 

(952

)

Liability for estimated contract losses

 

(2,670

)

 

 

(1,047

)

Other liabilities

 

4,509

 

 

 

1,644

 

Net cash used in operating activities

 

(27,789

)

 

 

(21,112

)

Cash flows from investing activities:

 

 

 

Purchase of property and equipment

 

(5,289

)

 

 

(207

)

Satellite procurement work in process

 

(20,208

)

 

 

(11,205

)

Purchase of short-term investments

 

(43,774

)

 

 

 

Purchase of domain name

 

 

 

 

(7

)

Proceeds from equity method investment

 

313

 

 

 

 

Net cash used in investing activities

 

(68,958

)

 

 

(11,419

)

Cash flows from financing activities:

 

 

 

Proceeds from issuance of debt

 

 

 

 

58,573

 

Proceeds from options exercised

 

25

 

 

 

7

 

Proceeds from warrants exercised

 

 

 

 

120

 

Debt payments

 

 

 

 

(750

)

Payments for deferred offering costs

 

 

 

 

(3,487

)

Payments for debt issuance costs

 

 

 

 

(646

)

Withholding tax payments on vesting of restricted stock units

 

(4,037

)

 

 

 

Net cash (used in) provided by financing activities

 

(4,012

)

 

 

53,817

 

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

(100,759

)

 

 

21,286

 

Cash, cash equivalents, and restricted cash – beginning of year

 

168,104

 

 

 

10,573

 

Cash, cash equivalents, and restricted cash – end of period

$

67,345

 

 

$

31,859

 

 

BLACKSKY TECHNOLOGY INC.

RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA

(unaudited)

(in thousands)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Net loss

$

(26,278

)

 

$

(35,585

)

 

$

(46,266

)

 

$

(204,141

)

Interest income

 

(178

)

 

 

 

 

 

(178

)

 

 

 

Interest expense

 

1,275

 

 

 

1,270

 

 

 

2,530

 

 

 

2,438

 

Depreciation and amortization

 

9,177

 

 

 

3,537

 

 

 

16,568

 

 

 

6,301

 

Loss on issuance of Bridge Notes, including debt issuance costs expensed for debt carried at fair value

 

 

 

 

3,288

 

 

 

 

 

 

147,387

 

Stock-based compensation expense

 

2,986

 

 

 

264

 

 

 

13,226

 

 

 

772

 

Loss (gain) on derivatives

 

4,646

 

 

 

967

 

 

 

(3,494

)

 

 

14,975

 

Satellite impairment loss

 

 

 

 

18,407

 

 

 

 

 

 

18,407

 

Loss from discontinued operations, net of income taxes

 

 

 

 

1,022

 

 

 

 

 

 

1,022

 

Severance

 

705

 

 

 

 

 

 

705

 

 

 

 

Income on equity method investment

 

(1,213

)

 

 

(767

)

 

 

(1,470

)

 

 

(963

)

Forgiveness of non-trade receivable

 

75

 

 

 

 

 

 

75

 

 

 

 

Adjusted EBITDA

$

(8,805

)

 

$

(7,597

)

 

$

(18,304

)

 

$

(13,802

)





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