Revenue drops and losses widen at BlackSky (NYSE: BKSY) in Q1 2026
Filing Impact
Filing Sentiment
Form Type
10-Q
BlackSky Technology Inc. reported a weak quarter, with lower revenue and a wider loss. Revenue for the three months ended March 31, 2026 was $20.8 million, down from $29.5 million a year earlier, mainly due to a sharp drop in mission solutions and advanced technology programs.
The company’s net loss widened to $29.7 million from $12.8 million, driven by a loss on derivative liabilities, higher depreciation from new Gen‑3 satellites, and higher interest expense on increased debt. Cash, cash equivalents, and restricted cash totaled $41.4 million, with long‑term debt of $209.2 million. BlackSky reported $351.6 million of backlog, reflecting contracted future work across its space-based intelligence, mission solutions, and advanced technology programs.
Positive
- None.
Negative
- Revenue fell sharply and losses widened: Total revenue declined 29.7% year over year to $20.8 million, led by a 79.6% drop in mission solutions revenue, while net loss more than doubled to $29.7 million, reflecting higher non-cash derivative losses, increased depreciation, and greater interest expense.
Insights
Revenue fell nearly 30% and losses more than doubled, while backlog remains sizable.
BlackSky generated Q1 2026 revenue of $20.8M, down from $29.5M. The decline was concentrated in mission solutions and advanced technology programs, while space-based intelligence & AI services were roughly flat. This mix shift reduces near-term growth momentum.
Net loss increased to $29.7M from $12.8M, reflecting an $8.2M loss on derivatives, higher depreciation from newly launched Gen‑3 satellites, and higher interest expense on total debt of $209.2M. Operating cash flow swung from $27.2M provided to $2.4M used.
Backlog of $351.6M provides contracted revenue visibility, with $69.3M expected over the remaining 2026 period and $55.3M in 2027. Actual performance will depend on executing long-term contracts, managing derivative-liability volatility tied to the share price, and servicing debt while funding satellite and software investments.
Key Figures
Total revenue: $20.8M
Net loss: $29.7M
Loss per share: $0.82
+5 more
8 metrics
Total revenue
$20.8M
Three months ended March 31, 2026; down from $29.5M in 2025
Net loss
$29.7M
Three months ended March 31, 2026; vs. $12.8M prior year
Loss per share
$0.82
Basic and diluted net loss per share for Q1 2026
Backlog
$351.6M
Remaining performance obligations as of March 31, 2026
Cash, cash equivalents and restricted cash
$41.4M
Balance at March 31, 2026
Total long-term debt
$209.2M
Convertible Senior Notes and satellite launch vendor financing
Space-based intelligence & AI services revenue
$16.5M
Q1 2026 segment revenue
Mission solutions revenue
$2.0M
Q1 2026 segment revenue, down from $9.8M in 2025
Key Terms
space-based intelligence & AI services, mission solutions, Convertible Senior Notes, backlog, +1 more
5 terms
space-based intelligence & AI services financial
"Revenue generated from space-based intelligence & AI services and advanced technology programs is classified as service revenue"
mission solutions financial
"Mission solutions revenue is generated from cost-plus contracts and firm fixed price long-term engineering and development contracts"
Convertible Senior Notes financial
"The Company issued $185.0 million aggregate principal amount of Convertible Senior Notes in a private offering during July 2025"
Convertible senior notes are a type of loan that a company issues to investors, which can be turned into company shares later on. They are called "senior" because they are paid back before other debts if the company runs into trouble. This allows investors to earn interest like a loan but also have the chance to own part of the company if its value rises.
backlog financial
"As of March 31, 2026, the Company had $351.6 million of backlog, which represents the transaction price of executed contracts"
A backlog is the amount of work or orders that a company has received but hasn't completed yet. It’s like a restaurant with many dishes to serve; the backlog shows how many orders are still waiting to be finished. It matters because a large backlog can indicate strong demand or potential delays in delivering products or services.
Adjusted EBITDA financial
"management utilizes certain non-GAAP performance measures, such as Adjusted EBITDA, for purposes of evaluating our ongoing operations"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 10-Q
___________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended March 31, 2026
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission file number 001-39113
___________________________________
___________________________________
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of Principal Executive Offices) | (Zip Code) | ||||
(703 ) 935-1930
Registrant’s telephone number, including area code
___________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | o | Accelerated filer | o | ||||||||
☒ | Smaller reporting company | ||||||||||
Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý
As of May 4, 2026, there were 37,109,026 shares of the registrant’s Class A common stock, at $0.0001 par value, outstanding.
Table of Contents
TABLE OF CONTENTS
Page | ||||||||
Part I. Financial Information | ||||||||
Item 1. | Financial Statements | 4 | ||||||
Condensed Consolidated Balance Sheets | 5 | |||||||
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income | 6 | |||||||
Condensed Consolidated Statements of Changes in Stockholders’ Equity | 7 | |||||||
Condensed Consolidated Statements of Cash Flows | 8 | |||||||
Notes to Condensed Consolidated Financial Statements | 10 | |||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 29 | ||||||
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 43 | ||||||
Item 4. | Controls and Procedures | 43 | ||||||
Part II. Other Information | ||||||||
Item 1. | Legal Proceedings | 44 | ||||||
Item 1A. | Risk Factors | 45 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 45 | ||||||
Item 5. | Other Information | 45 | ||||||
Item 6. | Exhibits | 46 | ||||||
Signatures | 47 | |||||||
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risks and uncertainties. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “plan,” “intend,” “could,” “would,” “expect” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. Forward-looking statements included in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding:
•our ability to expand our services and offerings to customers both domestically and internationally;
•our ability to expand within our current customer base;
•our expectations about market trends and needs;
•the performance and capabilities of our Gen-3 satellites (“Gen-3”) and related ground systems;
•our ability to add new satellites and sensors to our commercial operations;
•our ability to compete with legacy satellite imaging providers and other emergent geospatial intelligence providers;
•our ability to expand our product capabilities;
•the performance of our BlackSky Spectra® software platform;
•our ability to invest in our software, research, and development capabilities;
•our ability to integrate proprietary and third-party sensor data;
•our ability to continue delivering data in a cost-effective manner;
•our ability to comply with laws and regulations applicable to our business;
•our ability to maintain and protect our brand;
•our ability to retain or recruit key employees;
•our ability to maintain intellectual property protection for our products or avoid or defend claims of infringement;
•our anticipated capital expenditures, liquidity, and our estimates regarding our capital requirements;
•our estimates of market growth, future revenue, expenses, cash flows, capital requirements, and additional financing;
•our ability to manage the timing of capital expenditures to allow for additional flexibility to optimize our long-term liquidity requirements;
•our ability to optimize our cash spend to meet short- and long-term operational needs;
•the volatility of the trading price of our Class A common stock;
•the impact of local, regional, national, and international economic conditions and events; and
• other factors including but not limited to those detailed under the sections entitled “Risk Factors” in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025 and filed by us with the Securities and Exchange Commission (the “SEC”).
We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in Part II, Item 1A. “Risk
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Factors” in this Quarterly Report on Form 10-Q and Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, whether written or oral, except as required by law.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BLACKSKY TECHNOLOGY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except par value)
March 31, | December 31, | ||||||||||
2026 | 2025 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Short-term investments | |||||||||||
Accounts receivable, net of allowance of $ | |||||||||||
Contract assets | |||||||||||
Inventories | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment - net | |||||||||||
Operating lease right of use assets - net | |||||||||||
Goodwill | |||||||||||
Intangible assets - net | |||||||||||
Satellite work in process | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued liabilities | $ | $ | |||||||||
Contract liabilities - current | |||||||||||
Debt - current portion | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Derivative liabilities | |||||||||||
Long-term debt - net of current portion | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 17) | |||||||||||
Stockholders’ equity: | |||||||||||
Class A common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ | |||||||||
See notes to unaudited condensed consolidated financial statements
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BLACKSKY TECHNOLOGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
(in thousands, except per share amounts)
Three Months Ended March 31, | |||||||||||||||||||||||
2026 | 2025 | ||||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Space-based intelligence & AI services | $ | $ | |||||||||||||||||||||
Mission solutions | |||||||||||||||||||||||
Advanced technology programs | |||||||||||||||||||||||
Total revenue | |||||||||||||||||||||||
Costs and expenses | |||||||||||||||||||||||
Space-based intelligence & AI services costs, excluding depreciation and amortization | |||||||||||||||||||||||
Mission solutions costs, excluding depreciation and amortization | |||||||||||||||||||||||
Advanced technology programs costs, excluding depreciation and amortization | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Operating loss | ( | ( | |||||||||||||||||||||
(Loss) gain on derivatives | ( | ||||||||||||||||||||||
Interest income | |||||||||||||||||||||||
Interest expense | ( | ( | |||||||||||||||||||||
Other (expense) income, net | ( | ||||||||||||||||||||||
Loss before income taxes | ( | ( | |||||||||||||||||||||
Income tax expense | ( | ||||||||||||||||||||||
Net loss | ( | ( | |||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||
Total comprehensive loss | $ | ( | $ | ( | |||||||||||||||||||
Basic and diluted loss per share of common stock: | |||||||||||||||||||||||
Net loss per share of common stock | $ | ( | $ | ( | |||||||||||||||||||
See notes to unaudited condensed consolidated financial statements
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BLACKSKY TECHNOLOGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(unaudited)
(in thousands)
Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In | Accumulated | Total Stockholders' | |||||||||||||||||||||||||||||||||||
Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||||||||||||||
Balance as of January 1, 2026 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units | — | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common stock, net of equity issuance costs | — | — | ||||||||||||||||||||||||||||||||||||
Withholding of stock units to satisfy tax withholding obligations upon the vesting of restricted stock units and exercise of stock options | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||
Balance as of March 31, 2026 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In | Accumulated | Total Stockholders' | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2025 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net of equity issuance costs | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Withholding of stock units to satisfy tax withholding obligations upon the vesting of restricted stock units and exercise of stock options | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2025 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
See notes to unaudited condensed consolidated financial statements
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BLACKSKY TECHNOLOGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Three Months Ended March 31, | |||||||||||
2026 | 2025 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization expense | |||||||||||
Operating lease right of use assets amortization | |||||||||||
Stock-based compensation expense | |||||||||||
Amortization of debt issuance costs and non-cash interest expense | |||||||||||
Loss (gain) on derivatives | ( | ||||||||||
Non-cash interest income | ( | ( | |||||||||
Other | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | |||||||||||
Contract assets - current and long-term | ( | ||||||||||
Inventories | |||||||||||
Prepaid expenses and other current assets | ( | ||||||||||
Other assets | |||||||||||
Accounts payable and accrued liabilities | ( | ( | |||||||||
Other current liabilities | ( | ||||||||||
Contract liabilities - current and long-term | ( | ||||||||||
Other liabilities | ( | ||||||||||
Net cash (used in) provided by operating activities | ( | ||||||||||
Cash flows from investing activities: | |||||||||||
Purchase of property and equipment | ( | ( | |||||||||
Satellite work in process | ( | ( | |||||||||
Purchases of short-term investments | ( | ( | |||||||||
Proceeds from maturities of short-term investments | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from equity issuances, net of equity issuance costs | |||||||||||
Proceeds from options exercised and ESPP shares purchased | |||||||||||
Repayments of debt | ( | ||||||||||
Payments for debt issuance costs | ( | ||||||||||
Withholding tax payments on vesting of restricted stock units | ( | ( | |||||||||
Payments for deferred offering costs | ( | ||||||||||
Net cash provided by financing activities | |||||||||||
Net (decrease) increase in cash, cash equivalents, and restricted cash | ( | ||||||||||
Cash, cash equivalents, and restricted cash – beginning of year | |||||||||||
Cash, cash equivalents, and restricted cash – end of period | $ | $ | |||||||||
See notes to unaudited condensed consolidated financial statements
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The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same such amounts shown in the unaudited condensed consolidated statements of cash flows:
March 31, | |||||||||||
2026 | 2025 | ||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Total cash, cash equivalents, and restricted cash | $ | $ | |||||||||
Three Months Ended March 31, | |||||||||||
2026 | 2025 | ||||||||||
(in thousands) | |||||||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash paid for income taxes | |||||||||||
Supplemental disclosures of non-cash financing and investing information: | |||||||||||
Additions of equipment and other satellite procurement costs accrued but not yet paid | $ | $ | |||||||||
Vendor financed satellite launch costs | |||||||||||
Interest capitalized but not yet paid | |||||||||||
Accretion of short-term investments' discounts and premiums | |||||||||||
Capitalized depreciation expense | |||||||||||
Capitalized stock-based compensation | |||||||||||
Equity issuance costs accrued but not yet paid | |||||||||||
Adjustments to goodwill for changes in the preliminary purchase price allocation | |||||||||||
Deferred offering costs accrued but not yet paid | |||||||||||
See notes to unaudited condensed consolidated financial statements
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BLACKSKY TECHNOLOGY INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
1. Organization and Business
BlackSky Technology Inc. (“BlackSky” or the “Company”), headquartered in Herndon, Virginia, is a space technology company that delivers real-time imagery, analytics and high-frequency monitoring along with solutions that allow customers the ability to acquire, own, and operate their own customized satellite(s) and space-to-ground system(s). The Company owns and operates an advanced purpose-built commercial, real-time intelligence system that combines the power of the BlackSky Spectra tasking and analytics software platform and the Company's proprietary high-resolution low earth orbit (“LEO”) small satellite constellation. The constellation is optimized to cost-efficiently capture imagery at high revisit rates where and when customers need it. The BlackSky Spectra software platform processes millions of observations a day by integrating data from the Company's proprietary satellite constellation and from other third-party sensors such as synthetic aperture radar and radio frequency satellites, millions of GPS-enabled terrestrial data sources and Internet of Things (“IoT”) connected devices. BlackSky Spectra applies advanced, proprietary artificial intelligence (“AI”) and machine learning (“ML”) techniques to process, analyze, and transform these raw feeds into actionable intelligence via alerts, information, and insights. Customers can access BlackSky Spectra's software platform and its data and analytics through easy-to-use web services or through platform application programming interfaces. BlackSky delivers a comprehensive suite of space-based intelligence products and services through three integrated revenue streams—space-based intelligence & AI services, mission solutions, and advanced technology programs.
2. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Preparation
The Company has prepared its unaudited condensed consolidated financial statements in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”) and the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. The Company’s unaudited condensed consolidated financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities, including derivative financial instruments, that are stated at fair value. Unless otherwise indicated, amounts presented in the Notes pertain to the Company’s continuing operations.
Effective January 1, 2025, the Company reclassified its captions on the unaudited condensed consolidated statements of operations and comprehensive loss to better align with the Company’s increasing portfolio of mission solutions product offerings and advanced technology program service offerings. Revenue and costs that were previously classified as imagery & software analytical services are now classified as space-based intelligence & AI services. Professional & engineering services are now either classified as mission solutions if they are related to the Company's product offerings or advanced technology programs if they are related to the Company's service offerings. As a result, for the three months ended March 31, 2025, the amounts presented have been reclassified to conform to the current year presentation.
In addition, certain prior year amounts have been reclassified to conform to the current year presentation.
Use of Estimates
The preparation of the unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingencies at the reporting date, and the reported amounts of revenue and expenses during the reporting period. These estimates are based on management’s best knowledge of current events and actions the Company
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Investments
The Company invests in short-term investments, which generally consist of A-1, or higher, rated corporate debt and governmental securities. The investments are classified as held-to-maturity and have a stated maturity date of one year or less from the balance sheet date. Any investments with original maturities less than three months are considered cash equivalents.
Inventories
Inventories are production costs associated with anticipated future revenue contracts. As of March 31, 2026 and December 31, 2025, the Company had $6.2 0
Fair Value of Financial Instruments
The Company accounts for certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The process for analyzing the fair value measurement of certain financial instruments on a recurring, or non-recurring, basis includes significant judgment and estimates of inputs including, but not limited to, share price, volatility, discount for lack of marketability, application of an appropriate discount rate, and probability of liquidating events. The Company utilizes the market valuation methodology and specific option pricing methodology, such as the Monte Carlo simulation, to value its more complex financial instruments, whereas the Company utilizes the Black-Scholes option-pricing model to value standard common stock warrants and common stock options.
The framework for measuring fair value specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).
The three levels of the fair value hierarchy are as follows:
Level 1 Inputs. Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
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Level 2 Inputs. Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.
Level 3 Inputs. Inputs are unobservable inputs which reflect the Company’s own assumptions on what assumptions market participants would use in pricing the asset or liability based on the best available information.
Revenue Recognition
The Company generates revenue from the sale of space-based intelligence & AI services, mission solutions, and advanced technology programs. Revenue generated from space-based intelligence & AI services and advanced technology programs is classified as service revenue and revenue generated from mission solutions is classified as product revenue. Space-based intelligence & AI services revenue is primarily generated from subscription contracts with domestic and international government agencies and includes imagery, data, software, and analytics. This revenue is primarily recognized from services rendered under non-cancellable subscription order agreements or, in limited circumstances, variable not-to-exceed purchase orders. Mission solutions revenue is generated from cost-plus contracts and firm fixed price long-term engineering and development contracts. Advanced technology programs revenue is primarily generated from cost-plus contracts, time and materials basis contracts and firm-fixed price service solutions contracts.
In accordance with Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“Accounting Standards Codification (“ASC”) 606”), the Company uses the five-step model of identifying the contract with a customer, identifying the performance obligations contained in a contract, determining the transaction price, allocating the transaction price, and determining when performance obligations are satisfied. Application of this model requires the application of significant judgment, as further discussed below.
Revenue is measured as the fair value of consideration received or receivable and net of discounts. The Company applies a policy election to exclude transaction taxes collected from customer sales when the tax is both imposed on and concurrent with a specific revenue-producing transaction. The Company estimates any variable consideration, and whether the transaction price is constrained, upon execution of each contract. Variable consideration is estimated as the most likely amount that is dependent upon the occurrence or non-occurrence of a future event. We continually review, and may reassess, the transaction price based on forecasted service level provisions within a limited amount of our customer purchase orders, costs incurred to date and historical experience. As a result, we may update our estimated constraints on revenue, which are generally provided on a prospective basis. The Company did not have any active contracts with significant variable consideration as of March 31, 2026.
Space-Based Intelligence and AI Services Revenue
Space-based intelligence & AI services revenue include imagery delivered from the Company’s proprietary satellite constellation and BlackSky Spectra software platform and, in limited cases, imagery directly uploaded to certain customers. Customers can directly task the Company's proprietary satellite constellation to collect and deliver imagery over specific locations, sites and regions that are critical to their operations. The Company offers customers several service level subscription options that include on-demand tasking or multi-year assured access programs. Assured access customers can secure priority access and imaging capacity at a premium over a region of interest on a take or pay basis. Imagery revenue is recognized over the subscription period based on the promise to continuously provide contractual satellite capacity for tasked imagery or analytics at the discretion of the customer. These products, based on the context of the contract, are capable of being distinct performance obligations.
The Company leverages proprietary AI and ML algorithms to analyze data coming from both the Company’s proprietary sensor network and third-party space and terrestrial sources to provide hard-to-get data, insights, and analytics for customers. The Company continues to integrate and enhance its offerings by
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performing contract development, while retaining the intellectual property rights. The Company also offers services related to object, change and anomaly detection, site monitoring, and enhanced analytics services that can detect key pattern of life changes in critical locations such as ports, airports, and construction sites; retail activity; commodities stockpiles; and other sites that contain critical commodities and supply chain inventory.
The Company's analytics services are also offered on a similar subscription basis and provide customers with access to the Company's site monitoring, event monitoring and global data services. Analogous with the recognition of revenue for imagery, software analytical services revenue is recognized ratably over the subscription period.
Mission Solutions Revenue
The Company provides mission solutions, which develop and deliver customized advanced satellite and payload systems for a limited number of customers, leveraging the Company’s capabilities in mission systems engineering and operations. These offerings furnish government customers with an end-to-end pathway to customized sovereign space-based intelligence capabilities, enabling nations to accelerate the development, launch, and operation of their own space programs with full autonomy and control, ground station operations, and software and systems development. Mission solutions revenue is generated from cost-plus contracts and firm fixed price long-term engineering and development contracts. Mission Solutions is often purchased in conjunction with our imagery and analytics to address interim or additional capacity or capability needs, or coupled with our advanced technology programs to further optimize a customer’s experience.
Advanced Technology Programs Revenue
The Company offers various advanced technology programs, including technology enabled professional service solutions to support customer-specific software development requests, integration, testing, and training. These services, based on the context of the contract, are capable of being distinct performance obligations.
Advanced technology programs revenue is generated from cost-plus contracts, time and materials basis contracts and firm-fixed price service solutions contracts. For contracts structured as cost-plus or on a time and materials basis, the Company recognizes revenue based on the right-to-invoice practical expedient, as the Company is contractually able to invoice the customer based on the control transferred to the customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date.
Estimate at Completion ("EAC") Adjustments
For firm fixed price mission solutions and advanced technology programs contracts, the Company recognizes revenue over time using the cost to cost input method to measure progress to complete the performance obligation. A performance obligation's EAC includes all direct costs such as labor, fringe, materials, subcontract costs and overhead. The Company uses significant judgment to estimate total costs at completion on a performance obligation by performance obligation basis including, but not limited to, labor productivity, program schedule, technical risk analysis, complexity, scope of the work and identified risks. Due to the continuous nature of the work, as well as when a change in circumstances warrants a modification, the EAC is reviewed and may result in cumulative changes to the contract profit. The Company recognizes changes in estimated contract sales or costs and the resulting changes in contract profit on a cumulative basis in the period in which the change is identified. If, at any time, the estimate of contract profitability indicates a probable anticipated loss on a contract, the Company recognizes the total loss as and when known. The following table presents the effect of aggregate net EAC adjustments on the Company's contracts:
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Three Months Ended March 31, | ||||||||||||||||||||||||||
2026 | 2025 | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Revenue | $ | ( | $ | ( | ||||||||||||||||||||||
Basic and diluted net loss per share | $ | $ | ( | |||||||||||||||||||||||
Costs and Expenses
Space-based intelligence & AI services costs primarily include cloud computing and hosting services, internal labor to support the ground station network and space operations, and third-party data and imagery. Mission solutions costs primarily include the cost of direct materials to build and test specific components, such as the communications system, payloads, and sensor integration, as well as internal labor for design and engineering in support of long-term development contracts for customized customer satellites and payload systems. The Company also recognizes internal labor costs and external subcontract labor costs for its customer-centric software products. Advanced technology programs costs primarily include the cost of internal labor for service solutions that enhance customer adoption and operational integration of our technology.
Additionally, the Company recognizes stock-based compensation expense for those employees who provide direct labor to support the Company's product and service offerings.
Sponsor Shares
Stock-Based Compensation
Restricted Stock Units
The Company grants restricted stock units ("RSUs") to certain employees, for which the grant date fair value is equal to the fair value of the Class A common stock on the date of grant. The Company uses the New York Stock Exchange (“NYSE”) trading price as the fair value of the Class A common stock for valuation purposes. For all awards where vesting is only subject to a service condition, including those subject to graded vesting, the Company has elected to use the straight-line method to recognize the fair value as compensation cost over the requisite service period. Expense related to stock-based payments is classified in the unaudited condensed consolidated statements of operations and comprehensive loss based upon the classification of each employee's cash compensation.
Stock Options
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3. Accounting Standards Updates (“ASU”)
Accounting Standards Recently Issued But Not Yet Adopted
In November 2024, the FASB issued ASU No. 2024-03 Disaggregation of Income Statement Expenses. ASU 2024-03 requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 will be effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and will be applied on a prospective basis with the option to apply the standard retrospectively. The Company is evaluating the disclosure impact of ASU 2024-03; however, it is not expected that the standard will have a material impact on the Company’s consolidated financial position, results of operations and/or cash flows.
In September 2025, the FASB issued ASU No. 2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 amends certain aspects of the accounting for and disclosure of software costs, primarily modernizing the guidance to reflect the software development approaches currently used. ASU 2025-06 will be effective for annual periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is in the early stages of evaluating the adoption impact and cannot yet reasonably estimate the impact to the consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-11 Interim Reporting (Topic 270): Narrow-Scope Improvements. ASU 2025-11 clarifies the applicability of Topic 270 and the form and content of interim financial statements. In addition, ASU 2025-11 requires entities to disclose material events occurring since the last annual reporting period. ASU 2025-11 will be effective for interim periods beginning January 1, 2028, and can be applied on a prospective or retrospective basis. The Company is in the early stages of evaluating the adoption impact and cannot yet reasonably estimate the impact to the consolidated financial statements.
4. Segment Information
The Company’s Chief Operating Decision Maker (“CODM”) as defined under GAAP, who is the Company’s Chief Executive Officer, has determined the allocation of resources and assessed performance based upon the consolidated results of the Company. The CODM has utilized consolidated net loss to assess financial performance and allocate resources. Accordingly, for the three months ended March 31, 2026 and 2025, the Company was deemed to be comprised of only one operating segment and one reportable segment. This segment, which comprised the continuing operations of the Company’s single operating and reportable segment, provided space-based intelligence products and services through three integrated revenue streams—space-based intelligence & AI services, mission solutions, and advanced technology programs—along with related costs, primarily consisting of cloud computing and hosting services, direct materials to build and test specific components, and internal labor for service solutions that enhance customer adoption and operational integration of the Company's technology.
The following table presents selected financial information with respect to the Company’s single reportable segment for the three months ended March 31, 2026 and 2025:
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Three Months Ended March 31, | |||||||||||||||||||||||
2026 | 2025 | ||||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Space-based intelligence & AI services | $ | $ | |||||||||||||||||||||
Mission solutions | |||||||||||||||||||||||
Advanced technology programs | |||||||||||||||||||||||
Total revenue | |||||||||||||||||||||||
Costs and expenses | |||||||||||||||||||||||
Space-based intelligence & AI services direct labor costs | |||||||||||||||||||||||
Space-based intelligence & AI services direct materials costs | |||||||||||||||||||||||
Mission solutions direct labor costs | |||||||||||||||||||||||
Mission solutions direct materials costs | |||||||||||||||||||||||
Advanced technology programs direct labor costs | |||||||||||||||||||||||
Advanced technology programs direct materials costs | |||||||||||||||||||||||
Salaries and benefit costs | |||||||||||||||||||||||
Stock-based compensation expense(1) | |||||||||||||||||||||||
Other segment items(2) | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Loss (gain) on derivatives | ( | ||||||||||||||||||||||
Interest income | ( | ( | |||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Other expense (income), net | ( | ||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net loss | $ | ( | $ | ( | |||||||||||||||||||
(1) Relates to stock-based compensation expense within selling, general, and administrative costs.
(2) Other segment items included in net loss primarily includes selling, general, and administrative costs and research and development costs.
As of March 31, 2026 and 2025, the Company's segment assets, which are equal to the Company's consolidated assets on the unaudited condensed consolidated balance sheets, are owned and operated by United States entities and are classified within the United States. See Note 5—“Revenue” for additional information about revenue by geographic region.
5. Revenue
Disaggregation of Revenue
The Company generates revenue from the sale of space-based intelligence & AI services, mission solutions, and advanced technology programs, primarily to domestic and international government agencies. The
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approximate revenue based on the geographic location of end customers was as follows for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31, | ||||||||||||||||||||||||||
2026 | 2025 | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
United States | $ | $ | ||||||||||||||||||||||||
Rest of world | ||||||||||||||||||||||||||
Total revenue | $ | $ | ||||||||||||||||||||||||
The Company has a concentration of contractual revenue arrangements with the U.S. federal government and agencies as well as with international governments. For the three months ended March 31, 2026 and 2025, the rest of world had one and two countries, respectively, that generated 10
Revenue | ||||||||||||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
Customer | Geographic Area(1) | 2026 | 2025 | |||||||||||||||||||||||||||||
U.S. federal government and agencies | United States | |||||||||||||||||||||||||||||||
Customer B | Rest of world | |||||||||||||||||||||||||||||||
Customer C | Rest of world | * | ||||||||||||||||||||||||||||||
* Revenue from these customers were less than 10% of total revenue during the period.
(1) Each customer whose revenue balances balance individually represented 10% or more of the Company’s total revenue relates to a unique country.
As of March 31, 2026 and December 31, 2025, the Company had the following customers whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable:
Accounts Receivable | ||||||||||||||||||||||||||||||||
As of March 31, | As of December 31, | |||||||||||||||||||||||||||||||
Customer | Geographic Area(1) | 2026 | 2025 | |||||||||||||||||||||||||||||
Customer D | Rest of world | |||||||||||||||||||||||||||||||
Customer E | Rest of world | |||||||||||||||||||||||||||||||
(1) Each customer whose accounts receivable balance individually represented 10% or more of the Company’s total accounts receivable relates to a unique country.
Revenue from categories of end customers for the three months ended March 31, 2026 and 2025 was as follows:
Three Months Ended March 31, | ||||||||||||||||||||||||||
2026 | 2025 | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
U.S. federal government and agencies | $ | $ | ||||||||||||||||||||||||
International governments | ||||||||||||||||||||||||||
Commercial and other | ||||||||||||||||||||||||||
Total revenue | $ | $ | ||||||||||||||||||||||||
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Backlog
Backlog represents the future sales the Company expects to recognize on firm orders it receives and is equivalent to the Company’s remaining performance obligations at the end of each period. It comprises both funded backlog (firm orders for which funding is authorized and appropriated) and unfunded backlog. The Company's backlog excludes unexercised contract options. As of March 31, 2026, the Company had $351.6 million of backlog, which represents the transaction price of executed contracts less inception to date revenue recognized. The Company expects to recognize revenue relating to its backlog, a portion of which is recorded in deferred revenue in the unaudited condensed consolidated balance sheets, of $69.3 million, $55.3 million, and $227.0 million in the nine months ending December 31, 2026, fiscal year 2027, and thereafter, respectively.
6. Contract Assets and Liabilities
The components of contract assets and contract liabilities consisted of the following:
March 31, | December 31, | ||||||||||
2026 | 2025 | ||||||||||
(in thousands) | |||||||||||
Contract assets - current: | |||||||||||
Unbilled revenue | $ | $ | |||||||||
Total contract assets - current | $ | $ | |||||||||
Contract assets - long-term: | |||||||||||
Other contract assets - long-term | |||||||||||
Total contract assets - long-term(1) | $ | $ | |||||||||
Contract liabilities - current: | |||||||||||
Deferred revenue - current | $ | $ | |||||||||
Total contract liabilities - current | $ | $ | |||||||||
Contract liabilities - long-term: | |||||||||||
Deferred revenue - long-term | $ | $ | |||||||||
Other contract liabilities - long-term | |||||||||||
Total contract liabilities - long-term(2) | $ | $ | |||||||||
(1) Total contract assets - long term is included in other assets in the unaudited condensed consolidated balance sheets.
(2) Total contract liabilities - long term is included in other liabilities in the unaudited condensed consolidated balance sheets.
Contract liabilities include payments received and billings made in advance of the satisfaction of performance obligations under a contract and are realized when the associated revenue is recognized under a contract. Contract assets include unbilled revenue, which is the amount of revenue recognized in excess of the amount billed to customers, where the rights to payment are not just subject to the passage of time; and costs incurred incremental to the contract to fulfill contract obligations. Other contract assets and other contract liabilities primarily relate to contract commissions on customer contracts.
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Changes in short-term and long-term contract assets and contract liabilities for the three months ended March 31, 2026 were as follows:
Contract Assets | Contract Liabilities | ||||||||||
(in thousands) | |||||||||||
Balance as of January 1, 2026 | $ | $ | |||||||||
Billings or revenue recognized that was included in the beginning balance | ( | ( | |||||||||
Changes in contract assets or contract liabilities, net of reclassification to receivables | ( | ||||||||||
Cumulative catch-up adjustment arising from changes in estimates to complete during the year | ( | ( | |||||||||
Changes in costs to fulfill and amortization of commission costs | ( | — | |||||||||
Changes in contract commission costs | — | ||||||||||
Balance as of March 31, 2026 | $ | $ | |||||||||
7. Prepaid Expenses and Other Current Assets
The components of prepaid expenses and other current assets were as follows:
March 31, | December 31, | |||||||||||||
2026 | 2025 | |||||||||||||
(in thousands) | ||||||||||||||
Receivable for insurance recoveries | $ | $ | ||||||||||||
Prepaid expenses | ||||||||||||||
Other current assets | ||||||||||||||
Total prepaid expenses and other current assets | $ | $ | ||||||||||||
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8. Property and Equipment - net
The following summarizes property and equipment - net as of:
March 31, | December 31, | ||||||||||
2026 | 2025 | ||||||||||
(in thousands) | |||||||||||
Satellites | $ | $ | |||||||||
Software | |||||||||||
Office furniture and fixtures | |||||||||||
Software development in process | |||||||||||
Production and engineering equipment | |||||||||||
Site equipment | |||||||||||
Computer equipment | |||||||||||
Other equipment | |||||||||||
Less: accumulated depreciation | ( | ( | |||||||||
Property and equipment not yet placed in service | |||||||||||
Property and equipment — net | $ | $ | |||||||||
9. Accounts Payable and Accrued Liabilities
The components of accounts payable and accrued liabilities were as follows:
March 31, | December 31, | ||||||||||
2026 | 2025 | ||||||||||
(in thousands) | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued payroll | |||||||||||
Accrued capital expenditures | |||||||||||
Accrued cost of goods sold and other expenses | |||||||||||
Total accounts payable and accrued liabilities | $ | $ | |||||||||
10. Other Current Liabilities
The components of other current liabilities were as follows:
March 31, | December 31, | |||||||||||||
2026 | 2025 | |||||||||||||
(in thousands) | ||||||||||||||
Accrued interest | $ | $ | ||||||||||||
Contingent liabilities | ||||||||||||||
Operating lease right-of-use liabilities | ||||||||||||||
Other current liabilities | ||||||||||||||
Total other current liabilities | $ | $ | ||||||||||||
The Company accrued a liability within other current liabilities and an offsetting current receivable as of March 31, 2026. See Note 17—“Commitments and Contingencies” for additional information on the liability.
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The carrying value of the Company’s outstanding debt consisted of the following amounts:
March 31, | December 31, | ||||||||||
2026 | 2025 | ||||||||||
(in thousands) | |||||||||||
Current portion of long-term debt | $ | $ | |||||||||
Non-current portion of long-term debt | |||||||||||
Total long-term debt | |||||||||||
Unamortized debt issuance costs | ( | ( | |||||||||
Outstanding balance | $ | $ | |||||||||
Effective Interest Rate | March 31, | December 31, | |||||||||||||||
Name of Loan | 2026 | 2025 | |||||||||||||||
(in thousands) | |||||||||||||||||
Convertible Senior Notes | $ | $ | |||||||||||||||
Satellite launch vendor financing | |||||||||||||||||
Total | $ | $ | |||||||||||||||
Convertible Senior Notes
The Company issued $185.0 million aggregate principal amount of Convertible Senior Notes in a private offering during July 2025. The Convertible Senior Notes mature on August 1, 2033 unless earlier converted, redeemed or repurchased. The Convertible Senior Notes bear interest at a rate of 8.25 % per year, payable semiannually in arrears on February 1 and August 1 of each year, beginning on February 1, 2026. The following table summarizes the interest expense for the Convertible Senior Notes for the three months ended March 31, 2026:
Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Coupon interest | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of debt issuance costs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total interest expense | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Holders may convert their Convertible Senior Notes at their option at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Company will pay shares of the Company's Class A common stock, or deliver cash, or a combination of cash and shares of the Company's Class A common stock, at the Company's election. The conversion rate of the notes will initially be 27.1909 shares of BlackSky’s Class A common stock per $1,000 principal amount of Convertible Senior Notes (equivalent to an initial conversion price of approximately $36.78 per share of Class A common stock). The conversion rate is subject to adjustment upon the occurrence of certain events set forth in the indenture governing the terms of the Convertible Senior Notes. The Company may not redeem the Convertible Senior Notes prior to August 4, 2028. The Company may redeem for cash all or any portion of the Convertible Senior Notes, at the Company's option, on or after August 4, 2028 and prior to the 26 th scheduled trading day immediately preceding the maturity date, if (1) the last reported sale price of the Company's Class A common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending
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on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption and (2) certain liquidity conditions are satisfied, at a redemption price equal to 100 % of the principal amount of the Convertible Senior Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. In addition, upon the occurrence of a make-whole fundamental change or our issuance of a notice of redemption, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert such Convertible Senior Notes in connection with such make-whole fundamental change or notice of redemption.
Satellite Launch Vendor Financing
The Company entered into a vendor financing agreement to fund the costs of multiple satellite launches providing for $27.0 million, for which payments accrue interest at 12.6 % per annum. Then, in November 2025, the Company entered into an additional agreement for multiple satellite launches providing for $30.6 million, for which payments accrue interest at 9.50 % per annum. A portion of the vendor financing agreements can 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. Interest begins to accrue on each launch date.
The Company may prepay either agreement at any time until the maturity date without premium or penalty. The outstanding debt related to the vendor financing agreements is guaranteed by the Company’s subsidiaries and secured by substantially all of the assets of the Company and its subsidiaries. During the three months ended March 31, 2026, the Company incurred $3.0 million of additional debt and repaid $2.1 million of principal and interest related to the satellite launch vendor financing agreements.
Debt Maturities
Under the Company’s loan agreements, minimum required maturities are as follows:
For the years ending December 31, | (in thousands) | ||||
2026 | $ | ||||
2027 | |||||
2028 | |||||
2029 | |||||
2030 | |||||
Thereafter | |||||
Total outstanding | $ | ||||
Fair Value of Debt
The following tables present the fair value hierarchy of the Company’s outstanding long-term debt as of March 31, 2026 and December 31, 2025:
March 31, 2026 | Quoted Prices in Active Markets | Significant Other Observable Input | Significant Other Unobservable Inputs | |||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Convertible Senior Notes | $ | $ | $ | |||||||||||||||||
Satellite launch vendor financing | ||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||
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December 31, 2025 | Quoted Prices in Active Markets | Significant Other Observable Input | Significant Other Unobservable Inputs | |||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Convertible Senior Notes | $ | $ | $ | |||||||||||||||||
Satellite launch vendor financing | ||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||
The fair value of the satellite launch vendor financing was estimated using Level 3 inputs, based on interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements and credit rating.
Compliance with Debt Covenants
As of March 31, 2026, all debt instruments contain customary covenants and events of default. There are no covenants tied to financial metrics and the Company was in compliance with all non-financial covenants as of March 31, 2026.
12. Equity Warrants Classified as Derivative Liabilities
Warrant Valuation
Equity warrants that are classified as derivative liabilities are included in derivative liabilities in the Company's unaudited condensed consolidated balance sheets and must be measured at fair value upon issuance and re-valued at the end of each reporting period through expiration. Any change in fair value between the respective reporting dates is recognized as an unrealized gain or loss in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss (see Note 16). As of March 31, 2026 and 2025, the Company's derivative liabilities included only equity warrants and the Sponsor Shares.
The following table is a summary of the number of shares of the Company’s Class A common stock issuable upon exercise of warrants at March 31, 2026:
Number of Shares | Exercise Price | Redemption Price | Expiration Date | Classification | (Gain) Loss in Value for the Three Months Ended March 31, 2026 | Fair Value as of March 31, 2026 | |||||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||||||
Public Warrants | $ | $ | 9/9/2026 | Liability | $ | ( | $ | ||||||||||||||||||||||||||||||||||
Private Placement Warrants - Issued October 2019 | 9/9/2026 | Liability | ( | ||||||||||||||||||||||||||||||||||||||
Private Placement Warrants - Issued October 2019 | 9/9/2026 | Liability | ( | ||||||||||||||||||||||||||||||||||||||
Private Placement Warrants - Issued March 2023 | N/A | 9/8/2028 | Liability | ||||||||||||||||||||||||||||||||||||||
In addition, the Company has 221 thousand Class A common stock warrants outstanding that have an exercise price of $0.88 and expiration dates from June 27, 2028 to October 31, 2029. These warrants are equity classified and were included in additional paid-in capital in the Company’s unaudited condensed consolidated balance sheets.
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13. Net Loss Per Share of Class A Common Stock
The following table includes the calculation of basic and diluted net loss per share:
Three Months Ended March 31, | ||||||||||||||||||||||||||
2026 | 2025 | |||||||||||||||||||||||||
(in thousands except per share information) | ||||||||||||||||||||||||||
Net loss available to common stockholders - basic and diluted | $ | ( | $ | ( | ||||||||||||||||||||||
Basic and diluted net loss per share | $ | ( | $ | ( | ||||||||||||||||||||||
Shares used in the computation of basic and diluted net loss per share | ||||||||||||||||||||||||||
The potentially dilutive securities listed below were not included in the calculation of diluted weighted average common shares outstanding because their effect would have been anti-dilutive during the three months ended March 31, 2026 and 2025.
Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Senior Notes | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock units outstanding | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Private Placement Warrants (exercisable for Class A common stock) treated as liability | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Public Warrants (exercisable for Class A common stock) treated as liability | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options and ESPP shares | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sponsor Shares | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock warrants (exercisable for Class A common stock) treated as equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
14. Stock-Based Compensation
During the three months ended March 31, 2026 and 2025, the Company granted equity awards under the 2021 Equity Incentive Plan and the 2021 Employee Stock Purchase Plan. Stock-based compensation expense is included in the unaudited condensed consolidated statements of operations and comprehensive loss as indicated in the table below:
Three Months Ended March 31, | ||||||||||||||||||||||||||
2026 | 2025 | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Space-based intelligence & AI services costs, excluding depreciation and amortization | $ | $ | ||||||||||||||||||||||||
Mission solutions costs, excluding depreciation and amortization | ||||||||||||||||||||||||||
Advanced technology programs costs, excluding depreciation and amortization | ||||||||||||||||||||||||||
Selling, general and administrative | ||||||||||||||||||||||||||
Total stock-based compensation expense | $ | $ | ||||||||||||||||||||||||
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The Company recorded stock-based compensation related to capitalized internal labor for software development activities and satellite work in process of $0.3 million and $0.2 million during the three months ended March 31, 2026 and 2025, respectively. These amounts were included in property, plant, and equipment - net and satellite work in process in the unaudited condensed consolidated balance sheets.
15. Related Party Transactions
A summary of the Company’s related party transactions during the three months ended March 31, 2026 and 2025 is presented below:
Amount Due to Related Party as of | |||||||||||||||||||||||||||||
Total Payments in the Three Months Ended March 31, | March 31, | December 31, | |||||||||||||||||||||||||||
Nature of Relationship | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
Name | Description of the Transactions | (in thousands) | |||||||||||||||||||||||||||
Ursa Space Systems | Strategic Partner | The Chairman of the Company’s board of directors, Will Porteous, is also an investor and member of the board of directors of Ursa Space Systems. The Company has a non-cancelable operational commitment with Ursa Space Systems. | $ | $ | $ | ||||||||||||||||||||||||
Thales Alenia Space | Shareholder and Parent of Wholly-owned Subsidiary, Seahawk | Design, development and manufacture of telescopes. | |||||||||||||||||||||||||||
Seahawk | Subsidiary of Thales Alenia Space | In 2019, the Company raised and converted $ | |||||||||||||||||||||||||||
Intelsat Jackson Holdings, S.A. ("Intelsat"), which is now part of SES | Former debt Issuer | In 2019, the Company entered into a term loan facility for $ | N/A | N/A | N/A | ||||||||||||||||||||||||
The Company recorded revenue from related parties of $9.7 million for the three months ended March 31, 2025. The amount of revenue from related parties for the three months ended March 31, 2026 was not significant. As of March 31, 2026 and December 31, 2025, the Company had $4.1 million and $3.9 million, respectively, of contract assets from related parties, which the Company anticipates receiving as payments over the next 12 months. As of March 31, 2026, the amounts invoiced by the Company and due from related parties were not significant. As of December 31, 2025, the amounts invoiced by the Company and due from related parties were $9.6 million.
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16. Fair Value of Financial Instruments
The following tables present information about the Company’s liabilities that are measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025 and indicate the fair value hierarchy level of the valuation techniques and inputs that the Company utilized to determine such fair value:
March 31, 2026 | Quoted Prices in Active Markets | Significant Other Observable Input | Significant Other Unobservable Inputs | |||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Public Warrants | $ | $ | $ | |||||||||||||||||
Private Placement Warrants - Issued October 2019 | ||||||||||||||||||||
Private Placement Warrants - Issued March 2023 | ||||||||||||||||||||
Sponsor Shares | ||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||
December 31, 2025 | Quoted Prices in Active Markets | Significant Other Observable Input | Significant Other Unobservable Inputs | |||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Public Warrants | $ | $ | $ | |||||||||||||||||||||||
Private Placement Warrants - Issued October 2019 | ||||||||||||||||||||||||||
Private Placement Warrants - Issued March 2023 | ||||||||||||||||||||||||||
Sponsor Shares | ||||||||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||||||||
The carrying values of the following financial instruments approximated their fair values as of March 31, 2026 and December 31, 2025 based on their short-term maturities: cash and cash equivalents, restricted cash, short-term investments, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities, and other current liabilities.
There were no transfers into or out of any of the levels of the fair value hierarchy during the three months ended March 31, 2026 or 2025.
The following is a summary of changes in the fair value of the Level 3 liabilities during the three months ended March 31, 2026 and 2025:
Sponsor Shares | Private Placement Warrants - Issued October 2019 | Private Placement Warrants - Issued March 2023 | |||||||||||||||
(in thousands) | |||||||||||||||||
Balance as of January 1, 2026 | $ | $ | $ | ||||||||||||||
Loss (gain) from changes in fair value | ( | ||||||||||||||||
Balance as of March 31, 2026 | $ | $ | $ | ||||||||||||||
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Sponsor Shares | Private Placement Warrants - Issued October 2019 | Private Placement Warrants - Issued March 2023 | |||||||||||||||
(in thousands) | |||||||||||||||||
Balance as of January 1, 2025 | $ | $ | $ | ||||||||||||||
(Gain) loss from changes in fair value | ( | ( | |||||||||||||||
Balance as of March 31, 2025 | $ | $ | $ | ||||||||||||||
17. Commitments and Contingencies
Legal Proceedings
From time to time, the Company may become involved in various claims and legal proceedings arising in the ordinary course of business, that, by their nature, are inherently unpredictable. Regardless of outcome, litigation and other legal proceedings can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.
On May 7, 2024, a putative class action relating to the Merger of Legacy BlackSky on September 9, 2021 with a wholly-owned subsidiary of Osprey was filed in the Delaware Court of Chancery. The action was captioned Drulias v. Osprey Sponsor II, LLC, et al. (“Drulias”) (Del. Ch. 2024). The Drulias complaint asserted breach of fiduciary duty and unjust enrichment claims against the former directors of Osprey (the “Osprey Board”); the former officers of Osprey; and Osprey Sponsor II, LLC (the “Sponsor”); and aiding and abetting breach of fiduciary duty claims against HEPCO Capital Management, LLC; JANA Partners LLC; and a director of Legacy BlackSky. The Drulias complaint sought, among other things, damages and attorneys’ fees and costs. The terms of the Merger required the Company to indemnify the directors of Osprey.
On May 8, 2024, a putative class action relating to the Merger was filed in the Delaware Court of Chancery. The action was captioned Cheriyala v. Osprey Sponsor II, LLC (“Cheriyala”) (Del. Ch. 2024). The Cheriyala complaint asserted breach of fiduciary duty claims against the former directors of the Osprey Board, the former officers of Osprey, and the Sponsor; aiding and abetting breach of fiduciary duty claims against BlackSky Holdings, Inc. and certain directors and officers of Legacy BlackSky; and unjust enrichment claims against an Osprey director. The Cheriyala complaint sought, among other things, damages and attorneys’ fees and costs.
The Court of Chancery granted Drulias’ motion to (i) consolidate the Drulias and Cheriyala actions, and (ii) appoint Drulias as lead plaintiff, and Drulias’ counsel as lead counsel, in the consolidated action. On April 15, 2025, Drulias sought to withdraw as the lead plaintiff. That same day, Patrick Plumley (“Plumley”) moved to intervene as a plaintiff in the consolidated action. The Court of Chancery granted Cheriyala’s and Plumley’s stipulation to (i) permit Drulias to withdraw as the lead plaintiff, (ii) permit Plumley to intervene as a plaintiff, and (iii) appoint Cheriyala and Plumley as co-lead plaintiffs, and Cheriyala’s and Plumley’s counsel as co-lead counsel, in the consolidated action.
The parties attended private mediation on September 9, 2025. The parties thereafter reached an agreement on a stipulation of settlement memorializing the terms of the settlement, which was filed with the Court of Chancery on January 7, 2026 (the “Settlement”). In the Settlement, the parties agreed, among other things, that (i) the consolidated actions would be dismissed with prejudice, (ii) the defendants and the Company would be released from claims asserted in the consolidated actions or that could have been asserted in the actions relating to, among other things, the Merger, and (iii) in exchange, members of the class would be paid settlement consideration of $7.5 million, $7.4 million of which was funded from insurance proceeds pursuant to a plan of allocation set forth in the stipulation.
See Note 10—“Other Current Liabilities” of the notes to the unaudited condensed consolidated financial statements for further information on the Settlement. A hearing with the Court of Chancery to consider approval of the Settlement and related matters was held on April 17, 2026. During the hearing, the Court (i) certified the consolidated actions as class actions, (ii) approved the Settlement, including the plan of allocation, (iii)
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18. Subsequent Events
The Company evaluated subsequent events through May 7, 2026 and determined that there have been no events that have occurred that would require adjustments to its disclosures or the consolidated financial statements.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. As discussed in the section titled “Special Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed in the section titled “Risk Factors” under Part I, Item IA of our Annual Report on Form 10-K for the year ended December 31, 2025 and filed with the Securities and Exchange Commission (the “SEC”). Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “BlackSky,” “the Company,” “we,” “us” and “our” refer to the business and operations of BlackSky Holdings, Inc. (“Legacy BlackSky”) and its consolidated subsidiaries prior to the completion of its merger on September 9, 2021 with a wholly-owned subsidiary of Osprey Technology Acquisition Corp. (the “Merger”) and of BlackSky Technology Inc. and its consolidated subsidiaries, following the closing of the Merger.
Company Overview
Founded in 2014, BlackSky is a space technology company that delivers real-time imagery, analytics and high-frequency monitoring of the world’s most critical and strategic locations, economic assets, and events. By taking a software-first technology approach, we are delivering real time space-based intelligence at disruptive speed, scale and economics. BlackSky is trusted by many of the most demanding U.S. and international government agencies and commercial businesses around the world. We are defining a new category of space-based intelligence products and services centered upon real-time imagery and automated analytics, delivered through an easy-to-use interface that operates seamlessly with our high-revisit and low latency satellite constellation. Our first-of-its-kind, purpose-built, secure artificial intelligence ("AI")-enabled space-to-ground architecture helps customers see, understand and anticipate change for a decisive strategic advantage. BlackSky can provide dynamic hourly monitoring over many of the most strategic locations on Earth up to 15 times per day from dawn to dusk.
BlackSky designs, builds, owns and operates the industry’s most advanced, purpose-built commercial, real-time intelligence system that combines the power of the BlackSky Spectra® tasking and analytics software platform with our high resolution, low earth orbit ("LEO") small satellite (“smallsat” or “smallsats”) constellation. Our Gen-3 satellites (“Gen-3”) include significantly enhanced capabilities, including 35-centimeter electro-optical imaging resolution and 1-meter short-wave infrared imaging technology for expanded imaging capabilities in low-light or at night. The Gen-3 constellation also features improved data communications capabilities that significantly increase the end-to-end delivery speed of intelligence products. BlackSky Spectra is a first-of-its-kind commercial tasking, analytics and multi-intelligence data-fusion software platform that helps customers monitor activities from space. The BlackSky constellation is the primary on-orbit data source and communications architecture that delivers space-based information to BlackSky Spectra. BlackSky’s satellites fly in unconventional, inclined orbits, and with built-in automated systems. Our constellation can deliver time-diverse, dawn-to-dusk, rapid revisit imagery, and analytics— with no humans in the loop. BlackSky Spectra provides end users the ability to augment proprietary data collected from our constellations with input from third-party sensors.
Customers experience the value of BlackSky’s space-based intelligence and AI capabilities through subscription-based On-Demand and Assured product offerings. Our Mission Solutions offering allows customers the ability to acquire, own, and operate their own customized Gen-3 satellite(s) and space-to-ground system(s). These solutions leverage our industry-leading, end-to-end satellite to ground infrastructure hardware and software technology stack. BlackSky Mission Solutions give nations the flexibility of owning space assets while having scalable access to additional capacity through BlackSky’s proprietary constellation. BlackSky also offers advanced technology program services that allow customers to conduct advanced R&D using aspects of BlackSky’s space-to-ground system that further enhance the capabilities that we can offer certain customers, or that further integrates BlackSky’s intelligence products into customer secure operational workflows. Our product and service offerings are designed to provide synergy to our customers. For example, when our Mission Solutions offerings are acquired in conjunction with our subscription data services, customers enjoy the benefits of speed, scale and reliability without
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having to own and operate a large constellation. Collectively, our offerings create a unified value proposition that supports national security, supply chain resilience, economic intelligence, and other critical decision-making requirements for customers worldwide.
Components of Operating Results
Revenue
Our revenue is generated by selling space-based intelligence & AI services through our BlackSky Spectra software platform and by providing mission solutions and advanced technology programs to strategic customers on a project basis.
•Space-Based Intelligence and AI Services Revenue: We offer high-revisit, high-resolution, satellite imaging products including dawn-to-dusk, 35 cm resolution electro-optical and nighttime imagery. Through our BlackSky Spectra software platform, customers can directly task our constellation to collect and deliver imagery over specific locations, sites, and regions that are critical to their operations. Customers also have access to multi-frame area 2x1 to capture areas larger than the single frame scene size, like large airports or large ports, burst to analyze motion with five frames collected in a single satellite pass, and stereo pairs (two frames) or sets (fives frames) to build and update 3D products on short timelines. All imagery products are included in our On-Demand and Assured subscription plans. BlackSky also offers non-Earth imagery services for monitoring orbiting spacecraft and other objects of interest.
Our AI-generated analytics are also offered on a subscription basis and provide customers with automated access to our site monitoring, event monitoring, and global data services. Our object change and anomaly detection, site monitoring, and enhanced analytics services can detect key pattern-of-life changes in critical locations. These critical locations include infrastructure, such as maritime ports, airfields, and construction sites; retail activity; commodities stockpiles; and other sites that contain critical commodities and supply chain inventory. Our AI-enabled analytics provide for the automated detection and classification of more than 30 objects of tactical interest.
We generally structure our customer agreements as annual or multi-year subscription contracts. We offer pricing tiers that enable the customer to manage collection priorities. These options provide customers with flexibility to utilize our space-based intelligence and AI services in a manner that best suits their business needs. For example, during critical events, customers may pay a premium to prioritize their monitoring and collection requirements, while at other times, customers can select lower priority collections to allow for more economical use of their overall subscription.
•Mission Solutions Revenue: We develop and deliver customized advanced satellites and payload systems for specific strategic customers that desire to leverage our capabilities in mission systems engineering and operations, ground station operations, software, analytics and systems development. By integrating our Gen-3 satellites, secure ground infrastructure, launch support, operations software, and training, this offering delivers rapid access to actionable intelligence, enhances mission continuity in secure or air-gapped environments, and supports national self-reliance in defense decision-making. Mission solutions empower customers to retain ownership and custody of satellites, tasking, and data while operating within their own borders and security frameworks. With proven, military-grade technology, globally distributed manufacturing, high-availability on-orbit performance, and transfer-of-knowledge programs that develop local workforce expertise, we enable partners to confidently build, operate, and evolve customized sovereign space architectures that strengthen national security and modern deterrence. These systems are sold to government customers under fixed price contracts and are often sold with operating and imagery service subscriptions. We retain rights to intellectual property for developed technology of certain systems. We also provide software systems engineering development services to support the integration of high volume and mass quantities of data in their operating platforms.
•Advanced Technology Programs Revenue: We provide advanced technology solutions that enhance customer adoption and operational integration of our technology. These services include support for customer-specific software feature development, systems testing, and training, as well as the integration of our imagery and analytics products into a customer’s existing processes and workflows. These services can
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also include the development and expansion of our current sensor capabilities. Through these services, we help customers tailor, expand and optimize their use of our platforms and mission capabilities.
Mission solutions and advanced technology programs revenue contain estimates that may result in the recognition of revenue in a current period for performance obligations that 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.
Costs and Expenses
Our costs and expenses, which includes stock-based compensation expense for those employees who support each category, are incurred from the following categories:
•Space-Based Intelligence & AI Services Costs: primarily include third-party data and imagery, ground station service payments, internal labor to support our ground stations and space operations, and compute/storage costs to facilitate our expanding AI/machine learnings ("ML") functionality. Costs are expensed as they are incurred except for incremental costs to obtain a contract, which are primarily sales commissions on contracts greater than one year, and are capitalized and amortized to selling, general, and administrative expenses on a systematic basis consistent with the transfer of goods and services and directly identifiable costs to fulfill a contract. Expense related to stock-based payments is classified in the unaudited condensed consolidated statements of operations and comprehensive loss based upon the classification of each employee's cash compensation.
•Mission Solutions Costs: primarily include the cost of direct materials to build and test specific, customized satellite and payload systems components, such as the communications system, payload demands, and sensor integration, as well as internal labor for design and engineering. These costs are incurred in support of long-term development contracts.
•Advanced Technology Programs Costs: primarily include the cost of internal labor and external subcontract labor costs for our customer-centric software service solutions.
Operating Expenses
Our operating expenses are incurred from the following categories:
•Selling, General, and Administrative Expense: consists of salaries, taxes, and benefit costs, product development costs, professional fees, and other expenses which include other personnel-related costs, stock-based compensation expense for those employees who generally support our business and operations, and occupancy costs.
•Research and Development Expense: consists of employees’ salaries, taxes, and benefits costs incurred while researching next generation space and ground architectures in support of our long-term strategy, which includes investments in satellite design and functionality. Additionally, we employ and classify third-party vendors who help fulfill our strategic projects as research and development expense. We intend to continue to invest appropriate resources in research and development efforts, as we believe that investment is critical to maintaining our competitive position.
•Depreciation Expense: is related to property and equipment, which mainly consist of operational satellites and capitalized internal-use software. Amortization expense is related to intangible assets, which mainly consist of customer relationships. We expect to incur additional depreciation expense when each Gen-3 satellite is launched and placed into service.
Results of Operations for the Three Months Ended March 31, 2026 and 2025
Effective January 1, 2025, we reclassified our captions on the unaudited condensed consolidated statements of operations and comprehensive loss to better align with our increasing portfolio of mission solutions product offerings and advanced technology program service offerings. Revenue and costs that were previously classified as imagery & software analytical services are now classified as space-based intelligence & AI services. Professional &
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engineering services are now either classified as mission solutions if they are related to our product offerings or advanced technology programs if they are related to our service offerings. As a result, for the three months ended March 31, 2025, the amounts presented have been reclassified to conform to the current presentation for three months ended March 31, 2026.
The following table provides the components of results of operations for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31, | $ | % | |||||||||||||||||||||||||||||||||||||||||||||
2026 | 2025 | Change | Change | ||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||||||||||||||||||||
Space-based intelligence & AI services | $ | 16,519 | $ | 16,829 | $ | (310) | (1.8) | % | |||||||||||||||||||||||||||||||||||||||
Mission solutions | 2,009 | 9,842 | (7,833) | (79.6) | % | ||||||||||||||||||||||||||||||||||||||||||
Advanced technology programs | 2,246 | 2,873 | (627) | (21.8) | % | ||||||||||||||||||||||||||||||||||||||||||
Total revenue | 20,774 | 29,544 | (8,770) | (29.7) | % | ||||||||||||||||||||||||||||||||||||||||||
Costs and expenses | |||||||||||||||||||||||||||||||||||||||||||||||
Space-based intelligence & AI services costs, excluding depreciation and amortization | 4,924 | 3,818 | 1,106 | 29.0 | % | ||||||||||||||||||||||||||||||||||||||||||
Mission solutions costs, excluding depreciation and amortization | 1,216 | 6,847 | (5,631) | (82.2) | % | ||||||||||||||||||||||||||||||||||||||||||
Advanced technology programs costs, excluding depreciation and amortization | 1,192 | 1,935 | (743) | (38.4) | % | ||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 22,562 | 21,442 | 1,120 | 5.2 | % | ||||||||||||||||||||||||||||||||||||||||||
Research and development | 170 | 245 | (75) | (30.6) | % | ||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 9,247 | 7,236 | 2,011 | 27.8 | % | ||||||||||||||||||||||||||||||||||||||||||
Operating loss | (18,537) | (11,979) | (6,558) | (54.7) | % | ||||||||||||||||||||||||||||||||||||||||||
(Loss) gain on derivatives | (8,217) | 1,901 | (10,118) | (532.2) | % | ||||||||||||||||||||||||||||||||||||||||||
Interest income | 1,024 | 573 | 451 | 78.7 | % | ||||||||||||||||||||||||||||||||||||||||||
Interest expense | (3,932) | (3,343) | (589) | (17.6) | % | ||||||||||||||||||||||||||||||||||||||||||
Other (expense) income, net | (1) | 65 | (66) | (101.5) | % | ||||||||||||||||||||||||||||||||||||||||||
Loss before income taxes | (29,663) | (12,783) | (16,880) | (132.1) | % | ||||||||||||||||||||||||||||||||||||||||||
Income tax expense | — | (30) | 30 | 100.0 | % | ||||||||||||||||||||||||||||||||||||||||||
Net loss | $ | (29,663) | $ | (12,813) | $ | (16,850) | (131.5) | % | |||||||||||||||||||||||||||||||||||||||
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Revenue
Three Months Ended March 31, | $ | % | |||||||||||||||||||||||||||||||||||||||||||||
2026 | 2025 | Change | Change | ||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Space-based intelligence & AI services | $ | 16,519 | $ | 16,829 | $ | (310) | (1.8) | % | |||||||||||||||||||||||||||||||||||||||
% of total revenue | 79.6 | % | 57.0 | % | |||||||||||||||||||||||||||||||||||||||||||
Mission solutions | 2,009 | 9,842 | (7,833) | (79.6) | % | ||||||||||||||||||||||||||||||||||||||||||
% of total revenue | 9.7 | % | 33.3 | % | |||||||||||||||||||||||||||||||||||||||||||
Advanced technology programs | 2,246 | 2,873 | (627) | (21.8) | % | ||||||||||||||||||||||||||||||||||||||||||
% of total revenue | 10.8 | % | 9.7 | % | |||||||||||||||||||||||||||||||||||||||||||
Total revenue | $ | 20,774 | $ | 29,544 | $ | (8,770) | (29.7) | % | |||||||||||||||||||||||||||||||||||||||
Space-Based Intelligence and AI Services Revenue
Space-based intelligence & AI services revenue was relatively flat for the three months ended March 31, 2026 as compared to the same period in 2025.
Mission Solutions Revenue
Mission solutions revenue decreased for the three months ended March 31, 2026 compared to the same period in 2025, primarily reflecting one-time work in process costs recognized in the first quarter of 2025 on a customized Earth observation satellite for a then-new customer, which did not recur in 2026. The decrease was partially offset by revenue recognized on certain long-term contracts that are in various stages of completion.
Advanced Technology Programs Revenue
Advanced technology programs revenue decreased for the three months ended March 31, 2026 as compared to the same period in 2025, largely due to the timing of completion of design and implementation services performed in 2025. These decreases were partially offset by revenue for providing advanced research and development services for an existing customer to develop next-generation space-based intelligence capabilities.
Costs and Expenses
Three Months Ended March 31, | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||
2026 | 2025 | Change | Change | |||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Space-based intelligence & AI services costs, excluding depreciation and amortization | $ | 4,924 | $ | 3,818 | $ | 1,106 | 29.0 | % | ||||||||||||||||||||||||||||||||||||||||||
Mission solutions costs, excluding depreciation and amortization | 1,216 | 6,847 | (5,631) | (82.2) | % | |||||||||||||||||||||||||||||||||||||||||||||
Advanced technology programs costs, excluding depreciation and amortization | 1,192 | 1,935 | (743) | (38.4) | % | |||||||||||||||||||||||||||||||||||||||||||||
Total costs | $ | 7,332 | $ | 12,600 | $ | (5,268) | (41.8) | % | ||||||||||||||||||||||||||||||||||||||||||
Space-Based Intelligence and AI Service Costs
Space-based intelligence & AI services costs, excluding depreciation and amortization, increased for the three months ended March 31, 2026 as compared to the same period in 2025, driven by increased capacity demand from
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recent global events, which also caused an increase in direct labor fulfillment costs on new and existing long-term contracts.
Mission Solutions Costs
Mission solutions costs, excluding depreciation and amortization, decreased for the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to the impact of incurred work in process costs under a satellite procurement contract that began in 2025.
Advanced Technology Programs Costs
Advanced technology programs costs, excluding depreciation and amortization, decreased for the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to a decrease in direct labor fulfillment costs caused by the timing of completion of design and implementation services performed in 2025. These decreases were partially offset by costs to provide advanced research and development services to an existing customer to develop next-generation space-based intelligence capabilities.
Selling, General, and Administrative
Three Months Ended March 31, | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||
2026 | 2025 | Change | Change | |||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Salaries and benefit costs | $ | 11,739 | $ | 11,703 | $ | 36 | 0.3 | % | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 3,927 | 2,757 | 1,170 | 42.4 | % | |||||||||||||||||||||||||||||||||||||||||||||
Information technology and other administrative expenses | 2,745 | 2,648 | 97 | 3.7 | % | |||||||||||||||||||||||||||||||||||||||||||||
Professional fees | 1,263 | 1,995 | (732) | (36.7) | % | |||||||||||||||||||||||||||||||||||||||||||||
Selling and marketing | 1,307 | 920 | 387 | 42.1 | % | |||||||||||||||||||||||||||||||||||||||||||||
Product development costs | 546 | 344 | 202 | 58.7 | % | |||||||||||||||||||||||||||||||||||||||||||||
Rent expense | 546 | 564 | (18) | (3.2) | % | |||||||||||||||||||||||||||||||||||||||||||||
Insurance | 489 | 511 | (22) | (4.3) | % | |||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | $ | 22,562 | $ | 21,442 | $ | 1,120 | 5.2 | % | ||||||||||||||||||||||||||||||||||||||||||
Selling, general, and administrative expenses increased during the three months ended March 31, 2026 as compared to the same period in 2025, primarily related to an increase in stock-based compensation expense resulting from an increase in the average stock price at the time of the grant of new stock awards in 2026. In addition, selling and marketing expenses increased related to the cost of international sales consultants as we continue to invest in international sales initiatives. These increases were partially offset by decreases in professional fees as a result of one-time transaction costs and accounting fees incurred during 2025 that were associated with finalizing the BlackSky Satellite Systems acquisition that closed in late 2024.
The following is our forecast for total restricted stock units ("RSUs") non-cash stock-based compensation expense as of March 31, 2026, which excludes certain executive RSUs that were forfeited after March 31, 2026 but before the filing date. In addition to the amounts recognized in selling, general, and administrative expenses, this includes the portion that will be capitalized or classified in space-based intelligence & AI services, mission solutions, or advanced technology programs costs:
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(in thousands) | |||||
For the years ending December 31, | |||||
2026 | $ | 10,962 | |||
2027 | 11,008 | ||||
2028 | 7,196 | ||||
2029 | 3,541 | ||||
2030 | 591 | ||||
$ | 33,298 | ||||
Research and Development
Three Months Ended March 31, | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||
2026 | 2025 | Change | Change | |||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Research and development | $ | 170 | $ | 245 | $ | (75) | (30.6) | % | ||||||||||||||||||||||||||||||||||||||||||
Research and development expense decreased for the three months ended March 31, 2026, as compared to the same period in 2025, due to the completion of certain development projects in early 2025.
Depreciation and Amortization
Three Months Ended March 31, | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||
2026 | 2025 | Change | Change | |||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation of satellites | $ | 4,627 | $ | 3,628 | $ | 999 | 27.5 | % | ||||||||||||||||||||||||||||||||||||||||||
Depreciation of all other property and equipment | 4,066 | 3,401 | 665 | 19.6 | % | |||||||||||||||||||||||||||||||||||||||||||||
Amortization | 554 | 207 | 347 | 167.6 | % | |||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | $ | 9,247 | $ | 7,236 | $ | 2,011 | 27.8 | % | ||||||||||||||||||||||||||||||||||||||||||
Depreciation expense from satellites increased for the three months ended March 31, 2026 as compared to the same period in 2025 related to the launch of our Gen-3 satellites throughout 2025 and during the first quarter of 2026. This was partially offset by a decrease in depreciation expense related to Gen-2 satellites becoming fully depreciated in 2025.
Depreciation expense from all other property and equipment increased for the three months ended March 31, 2026 as compared to the same period in 2025. This increase was primarily driven by the depreciation of increasing asset balances for internal-use software as we continue to invest in our BlackSky Spectra software platform, features for our Gen-3 constellation, and internal infrastructure.
Amortization expense increased for the three months ended March 31, 2026 as compared to the same period in 2025 due to the change in the estimated useful life of an intangible asset during the fourth quarter of 2025.
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Non-Operating Expenses
Three Months Ended March 31, | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||
2026 | 2025 | Change | Change | |||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
(Loss) gain on derivatives | $ | (8,217) | $ | 1,901 | $ | (10,118) | (532.2) | % | ||||||||||||||||||||||||||||||||||||||||||
Interest income | 1,024 | 573 | 451 | 78.7 | % | |||||||||||||||||||||||||||||||||||||||||||||
Interest expense | (3,932) | (3,343) | (589) | (17.6) | % | |||||||||||||||||||||||||||||||||||||||||||||
Other (expense) income, net | (1) | 65 | (66) | (101.5) | % | |||||||||||||||||||||||||||||||||||||||||||||
(Loss) gain on derivatives
Our common stock price significantly drives fluctuations in our equity warrants and other equity instruments that we classify as derivative liabilities in our unaudited condensed consolidated balance sheets and measure at fair value. 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. These re-measurements of derivative liabilities generated a loss for the three months ended March 31, 2026 and a gain for the three months ended March 31, 2025.
Interest income
Interest income increased during the three months ended March 31, 2026 as a result of higher short-term investment balances during the period as compared to the same period in 2025.
Interest expense
Interest expense increased during the three months ended March 31, 2026, as compared to the same period in 2025 because our outstanding debt increased from $116.5 million as of March 31, 2025 to $209.2 million as of March 31, 2026. In July 2025, we lowered the average interest rate of our outstanding debt when we repaid $100.2 million of loans from related parties in their entirety, which had a stated interest rate of 12% upon repayment, and issued $185.0 million of Convertible Senior Notes with a stated interest rate of 8.25%.
Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP, management utilizes certain non-GAAP performance measures, such as Adjusted EBITDA, for purposes of evaluating our ongoing operations and for internal planning and forecasting purposes. Our management and board of directors believe that this non-GAAP operating measure, when reviewed with our GAAP financial information, provides useful supplemental information to investors in assessing our operating performance.
Adjusted EBITDA
Adjusted EBITDA is defined as net income or loss attributable to us before interest income, interest expense, income tax expense or benefit, depreciation and amortization, as well as significant non-cash and/or non-recurring expenses as our management believes these items are not useful in evaluating our core operating performance. These items include, but are not limited to, stock-based compensation expense; unrealized gain or loss on certain warrants/shares classified as derivative liabilities; loss on debt extinguishment; non-recurring transaction costs; litigation, settlements, and related costs; severance; and impairment, obsolescence, and asset disposals. We have presented Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the exclusion of certain items in calculating Adjusted EBITDA can produce a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA provides useful information in understanding and evaluating our operating results. In addition, we believe that Adjusted EBITDA provides additional information for investors to use in evaluating our ongoing operating results and trends. This non-GAAP measure provides investors with incremental information for the evaluation of our performance after isolation of certain items deemed unrelated to our core business operations.
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Adjusted EBITDA is presented as a supplemental measure to our GAAP measures of performance. When evaluating Adjusted EBITDA, you should be aware that we may incur future expenses similar to those excluded when calculating this measure. In addition, our presentation of this measure should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Furthermore, our computation of Adjusted EBITDA may not be directly comparable to similarly titled measures computed by other companies, as the nature of the adjustments that other companies may include or exclude when calculating Adjusted EBITDA may differ from the adjustments reflected in our measure. Because of these limitations, Adjusted EBITDA should not be considered in isolation, nor should this measure be viewed as a substitute for the most directly comparable GAAP measure, which is net loss. We compensate for the limitations of non-GAAP measures by relying primarily on our GAAP results. You should review the reconciliation of our net loss to Adjusted EBITDA below and not rely on any single financial measure to evaluate our performance.
The table below reconciles our net loss to Adjusted EBITDA for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31, | |||||||||||||||||||||||
2026 | 2025 | ||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Net loss | $ | (29,663) | $ | (12,813) | |||||||||||||||||||
Interest income | (1,024) | (573) | |||||||||||||||||||||
Interest expense | 3,932 | 3,343 | |||||||||||||||||||||
Income tax expense | — | 30 | |||||||||||||||||||||
Depreciation and amortization | 9,247 | 7,236 | |||||||||||||||||||||
Loss (gain) on derivatives | 8,217 | (1,901) | |||||||||||||||||||||
Stock-based compensation expense | 4,105 | 2,897 | |||||||||||||||||||||
Severance | 72 | 326 | |||||||||||||||||||||
Litigation, settlements, and related costs | 18 | 138 | |||||||||||||||||||||
Non-recurring transaction costs | — | 656 | |||||||||||||||||||||
Impairment and asset disposals | — | 44 | |||||||||||||||||||||
Adjusted EBITDA | $ | (5,096) | $ | (617) | |||||||||||||||||||
Liquidity and Capital Resources
As of March 31, 2026, our existing sources of liquidity included cash and cash equivalents and short-term investments. Our cash and cash equivalents excluding restricted cash totaled $39.4 million and $42.4 million as of March 31, 2026 and December 31, 2025, respectively, and our short-term investments totaled $76.1 million and $82.0 million as of March 31, 2026 and December 31, 2025, 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, 2026, we had an accumulated deficit of $756.1 million.
Our short-term liquidity as of March 31, 2026 was comprised of the following:
(in thousands) | |||||
Cash and cash equivalents | $ | 39,382 | |||
Restricted cash | 2,027 | ||||
Short-term investments(1) | 76,139 | ||||
$ | 117,548 | ||||
(1) Short-term investments were included in cash flows from investing activities in the unaudited condensed consolidated statements of cash flows.
Our short-term liquidity as of March 31, 2026 was $117.5 million. We expect cash and cash equivalents, short-term investments, and cash generated from operating activities to be sufficient to meet our working capital and
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capital expenditure needs for the foreseeable future. Our future long-term capital requirements will depend on many factors, including our Gen-3 satellite and mission solutions production needs, launch and insurance costs, our growth rate, customer demand for capacity, the timing and extent of spending to support solution development efforts, our ongoing investments in technology infrastructure, and the continuing market acceptance of our products and services.
In July 2025, we issued $185.0 million aggregate principal amount of Convertible Senior Notes in a private offering. The Convertible Senior Notes will mature on August 1, 2033 unless earlier converted, redeemed or repurchased. The Convertible Senior Notes will bear interest at a rate of 8.25% per year, payable semiannually in arrears on February 1 and August 1 of each year, beginning on February 1, 2026.
We entered into vendor financing agreements for $57.6 million to fund the costs of multiple satellite launches. Our November 2023 agreement provides for a $27.0 million borrowing commitment and payments accrue interest at 12.6% per annum while our November 2025 agreement is for a $30.6 million borrowing commitment and payments accrue interest at 9.50% per annum. A portion of the vendor financing agreements can 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. Interest begins to accrue on each launch date. During the three months ended March 31, 2026, we incurred $3.0 million of additional debt related to the satellite launch vendor financing agreements. As of March 31, 2026, we have $28.9 million of additional vendor financing available to us for future launches. For additional information regarding the Convertible Senior Notes and vendor financing agreements, see Note 11 – “Debt and Other Financing” included in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements” of this Quarterly Report on Form 10-Q.
During the three months ended March 31, 2026, we issued and sold shares of our Class A common stock under our ATM sales agreement, resulting in gross proceeds of $15.0 million. We have the ability to offer and sell up to $100.0 million of shares of our Class A common stock in open trading windows at market prices through a designated broker dealer pursuant to an ATM offering program.
We had $24.2 million and $28.6 million of current contract assets as of March 31, 2026 and December 31, 2025, respectively. We expect to continue billing for and receiving payments on our contract assets over the next 12 months as interim milestones on a few major customer contracts are met. The timing of customer billing and payment varies from contract to contract and we may continue to generate additional contract assets in 2026 and beyond as we enter into new contracts.
From time to time, we may seek additional equity or debt financing to fund capital expenditures, strategic initiatives or investments and our ongoing operations. If we decide, or are required, to seek additional financing from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition and results of operations could be adversely affected.
Funding Requirements
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 to significantly expand our product capabilities in the future.
Short-Term Liquidity Requirements
As of March 31, 2026, our current assets were $185.3 million, consisting primarily of short-term investments, cash and cash equivalents, accounts receivable, and contract assets.
As of March 31, 2026, our current liabilities were $53.6 million, consisting primarily of contract liabilities, accounts payable and accrued liabilities, and other current liabilities, which includes a $7.5 million liability expected to be offset by an insurance recovery of $7.4 million. Accordingly, we have sufficient cash and working capital to fund our short-term liquidity requirements.
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Long-Term Liquidity Requirements
We anticipate that our most significant long-term liquidity and capital needs will relate to continued funding of operations, including procurement of materials for our missions solutions programs, 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. These ongoing investments in our operational systems include a multi-year minimum commitment for compute/storage costs to facilitate our expanding AI/ML functionality.
Upcoming satellite development capital expenditures include plans to expand our current high frequency monitoring constellation with multispectral, large-area collection satellites. We expect that 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.
Cash Flow Analysis
The following table provides a summary of cash flow data for the three months ended March 31, 2026 and 2025. Our short-term liquidity at March 31, 2026 was $117.5 million. Short-term investments of $76.1 million are not classified as cash, cash equivalents, or restricted cash.
Three Months Ended March 31, | $ | ||||||||||||||||
2026 | 2025 | Change | |||||||||||||||
(in thousands) | |||||||||||||||||
Net cash (used in) provided by operating activities | $ | (2,356) | $ | 27,245 | $ | (29,601) | |||||||||||
Net cash used in investing activities | (9,332) | (24,142) | 14,810 | ||||||||||||||
Net cash provided by financing activities | 9,549 | 4,420 | 5,129 | ||||||||||||||
Net (decrease) increase in cash, cash equivalents, and restricted cash | (2,139) | 7,523 | (9,662) | ||||||||||||||
Cash, cash equivalents, and restricted cash – beginning of year | 43,548 | 14,378 | 29,170 | ||||||||||||||
Cash, cash equivalents, and restricted cash – end of period | $ | 41,409 | $ | 21,901 | $ | 19,508 | |||||||||||
Operating Activities
For the three months ended March 31, 2026, net cash used in operating activities was $2.4 million, which is a decrease as compared to the same period in 2025. The decrease in net cash used in operating activities was largely related to a change in working capital in the first quarter of 2025 when we received a cash payment for capacity for future purchase orders and recorded it as deferred revenue in our unaudited condensed consolidated balance sheets. This decrease was partially offset by an increase in cash collected from interim milestone billings on a few major customer contracts during the three months ended March 31, 2026.
Investing Activities
The change in net cash used in investing activities was primarily due to increased net proceeds from short-term investments in government securities of $6.4 million during the three months ended March 31, 2026 as compared to $15.3 million of net purchases during the three months ended March 31, 2025.
We continue to have significant cash outflows for satellite procurement and launch-related services. We also 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 increased during the three months ended March 31, 2026 as compared to the three months
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ended March 31, 2025 primarily due to an increase in cash paid to procure direct materials and build our Gen-3 satellites, as well as for cash paid for launch insurance. We expect cash outflows for satellite production to increase as we continue to build out our satellite constellation.
Financing Activities
We received $14.3 million in net cash proceeds from our equity issuances during the three months ended March 31, 2026 as compared to $5.1 million in net proceeds during the three months ended March 31, 2025. Our equity issuances during the three months ended March 31, 2026 consisted of the sale of 0.6 million shares of our Class A common stock under the 2025 ATM Agreement, which resulted in $15.0 million in gross proceeds. In comparison, for the three months ended March 31, 2025, we sold 0.6 million shares of our Class A common stock under our 2022 ATM Agreement, which resulted in $5.4 million in gross proceeds. The increase in gross proceeds was the result of an increase in our average stock price during three months ended March 31, 2026 as compared to the same period in 2025.
The increase in net cash provided by financing activities were partially offset by increased withholding tax payments on vesting of restricted stock units as a result of an increase in our stock price between the comparative periods and $1.7 million of debt repayments to our satellite launch vendor financing debt arrangement.
Critical Accounting Estimates
The preparation of our unaudited condensed consolidated financial statements and related notes requires management to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Management has based its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
For a description of our significant accounting policies, see Note 2—“Basis of Presentation and Summary of Significant Accounting Policies” of the notes to the unaudited condensed consolidated financial statements. An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the unaudited condensed consolidated financial statements. Management believes the following critical accounting policies reflect the more significant estimates and assumptions used in the preparation of our unaudited condensed consolidated financial statements.
Revenue Recognition
The recognition and measurement of revenue requires the use of judgments and estimates. Specifically, judgment is used in interpreting complex arrangements with nonstandard terms and conditions and determining when all criteria for revenue recognition have been met, as further discussed below.
We generate revenue from the sale of space-based intelligence & AI services, mission solutions, and advanced technology programs.
Identifying the Contract with the Customer
We evidence approval of the contract with the customer with dual signatures or approved purchase orders that detail the rights of each party and define payment terms. We have never had significant collection issues on contracts with new or recurring domestic and international government customers and we consider this historical trend when assessing the collectability risk for contracts with bespoke effective terms. We also consider the probability of the customer funding the total contract value as a component of the collectability risk.
Identifying the Performance Obligations in a Contract
We execute contracts for a single promise or multiple promises. Specifically, our firm-fixed price contracts may include multiple promises which may be accounted for as separate performance obligations if they are capable of
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being distinct within the context of the contract. Significant judgment is required in determining performance obligations and these decisions could change the amount of revenue and profit or loss recorded in each period.
Classification of Revenue
We classify revenue as space-based intelligence & AI services, mission solutions, and advanced technology programs in our unaudited condensed consolidated statements of operations and comprehensive loss based on the predominant attributes of the performance obligations.
Determination of and Allocation of Transaction Price
Each customer contract sets forth the transaction price for the products and services purchased under the arrangement. We estimate any variable consideration, and whether the transaction price is constrained, upon execution of each contract. Variable consideration is estimated as the most likely amount that is dependent upon the occurrence or non-occurrence of a future event. We continually review, and may reassess, the transaction price based on forecasted service level provisions within a limited number of our customer purchase orders, costs incurred to date and historical experience. As a result, we may update our estimated constraints on revenue, which are generally on a prospective basis. For contracts with multiple performance obligations, we evaluate whether the stated selling prices for the products or services represent their standalone selling prices. When it is necessary to allocate the transaction price to multiple performance obligations, management uses the volume adjusted list price for imagery and analytics subscriptions and the expected cost plus a reasonable profit margin to estimate the standalone selling price of each product or service, which is mostly professional services.
Determination of when Performance Obligations are Satisfied
Space-based intelligence & AI services revenue is recognized over the subscription period based on the promise to continuously provide contractual satellite capacity for tasked imagery or software analytical services at the discretion of the customer. Mission solutions revenue is primarily recognized from firm-fixed price long-term customized satellites and ground station contracts. Advanced technology programs revenue is primarily generated from cost-plus contracts, and time and materials basis contracts and firm-fixed price service solutions contracts.
Due to the long-term nature of some of our contracts, we recognize revenue over time using a cost-to-complete measure of progress because it best depicts the transfer of control to the customer as we incur costs on the contracts. Under this measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs to complete the performance obligation(s). Calculating total estimated costs at completion is subject to many variables and requires significant judgment. We recognize changes in the estimation of total costs at completion on a cumulative catch-up basis in the period in which the changes are identified. Such changes in estimates can result in the recognition of revenue in a current period for performance obligations that were satisfied or partially satisfied in a prior period. If, at any time, the estimate of contract profitability indicates a probable anticipated loss on the contract, we recognize the total loss as and when known.
Equity Valuations
Equity valuations impact various amounts and accounting conclusions reflected in our unaudited condensed consolidated financial statements, including the recognition of equity-based compensation and warrant valuations. The following discussion provides additional details regarding the significant estimates, assumptions, and judgments that impacted the determination of the fair values of equity-based compensation awards, warrants, and the common stock that comprise our capital structure. The following discussion also explains why these estimates, assumptions, and judgments could be subject to uncertainties and future variability.
Equity-Based Compensation
We have equity and equity-based awards outstanding under our 2021 Equity Incentive Plan ("2021 Plan") and our 2014 Equity Incentive Plan ("2014 Plan"). Outstanding awards issued include stock options and RSUs. In addition, our eligible employees can participate in our 2021 Employee Stock Purchase Plan ("ESPP") pursuant to purchase right offerings that are established under the ESPP.
For purposes of recognizing equity-based compensation related to RSUs and stock options granted to employees and other service providers, management estimates the grant date fair values of such awards to measure
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the costs to be recognized as services are received. For awards with time-based vesting conditions, we recognize compensation costs based upon the straight-line amortization of the grant date fair value of the awards over the requisite service period. When equity-based compensation awards include a performance condition, no compensation is recognized until the performance condition is deemed probable to occur; we then recognize compensation costs based on the accelerated attribution method, which accounts for awards with discrete vesting dates as if they were separate awards.
Stock Option and Class A Common Stock Warrant Valuations
We use the Black-Scholes option-pricing model to value all options, including options under our ESPP, and Class A common stock warrants. Estimating the fair value of stock options using the Black-Scholes option-pricing model requires the application of significant assumptions, such as the estimated term of the options, risk-free interest rates, the expected volatility of the price of our Class A common stock, and an expected dividend yield. Each of these assumptions is subjective, requires significant judgment, and is based upon management’s best estimates. If any of these assumptions were to change significantly in the future, equity-based compensation related to future awards may differ significantly, as compared with awards previously granted.
We grant RSUs to the bulk of our employees. For these RSUs, the grant date fair value is equal to the trading price fair value of our Class A common stock on the date of grant. For stock options, which are primarily granted to certain management employees, we use the following inputs under Black-Scholes as follows:
Expected Dividend Yield: The Black-Scholes valuation model requires an expected dividend yield as an input. The dividend yield is based on historical experience and expected future changes. We historically have not paid, and currently have no plans to pay dividends on our Class A common stock. Accordingly, we have assumed no dividend yield upon valuation of our stock options.
Expected Volatility: As there was no observable volatility with respect to Legacy BlackSky Class A common stock and due to the lack of sufficient history of BlackSky Class A common stock, we estimated the expected volatility of Legacy BlackSky and BlackSky Class A common stock based upon the historical share price volatility of guideline comparable companies.
Risk-free Interest Rate: We used the yield on actively traded, non-inflation indexed U.S. Treasury notes to extrapolate an average risk-free interest rate based on the expected term of the underlying grants.
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 and adjust it, if necessary, due to changes in our historical exercises.
Private Placement Warrants and Sponsor Shares
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, 2026 and 2025. Although some of the warrants have expiration dates within one year of March 31, 2026, current liabilities are used principally to designate obligations whose liquidation is reasonably expected to require the use of existing resources properly classifiable as current assets, or the creation of other current liabilities. The Private Placement Warrants issued in October 2019 and the Sponsor Shares were initially recorded at fair value on the date of the Merger, whereas 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 immediately prior to each warrant exercise date. The remeasurements are 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.
The fair value models require inputs including, but not limited to, the fair value of our Class A common stock, the risk-free interest rate, expected term, expected dividend yield and expected volatility. The fair value of our Class
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A common stock is the closing stock price on the NYSE as of the measurement date. The risk-free interest rate assumption is determined by using U.S. Treasury rates for the same period as the expected terms of the financial instruments. The dividend yield assumption is based on the dividends expected to be paid over the expected life of the financial instruments. Expected stock volatility is based on our public warrant historical volatility. Changes in these assumptions can materially affect the estimate of the fair value of these instruments and ultimately the change in fair value.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of reasonably ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2026. Based upon that evaluation, our Certifying Officers concluded that, as of March 31, 2026, our disclosure controls and procedures were effective at a reasonable assurance level.
In designing and evaluating the disclosure controls and procedures, management recognized that controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company will be detected.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be involved in claims and proceedings arising in the course of our business. The outcome of any such claims or proceedings, regardless of the merits, is inherently uncertain.
On May 7, 2024, a putative class action relating to the merger (the “Merger”) of BlackSky Holdings, Inc. (“Legacy BlackSky”) on September 9, 2021 with a wholly-owned subsidiary of Osprey Technology Acquisition Corp. (“Osprey”) was filed in the Delaware Court of Chancery. The action was captioned Drulias v. Osprey Sponsor II, LLC, et al. (“Drulias”) (Del. Ch. 2024). The Drulias complaint asserted breach of fiduciary duty and unjust enrichment claims against the former directors of Osprey (the “Osprey Board”); the former officers of Osprey; and Osprey Sponsor II, LLC (the “Sponsor”); and aiding and abetting breach of fiduciary duty claims against HEPCO Capital Management, LLC; JANA Partners LLC; and a director of Legacy BlackSky. The Drulias complaint alleged the Sponsor and Osprey Board faced conflicts of interests with respect to the Merger, caused Osprey to pay an unfair price to acquire Legacy BlackSky, and made false or misleading disclosure of facts in the proxy statement disseminated in connection with the approval of the Merger (the “Merger Proxy”). The Drulias complaint further alleged that a Legacy BlackSky director aided and abetted breaches of fiduciary duty by the Osprey Directors by conspiring with them to provide misleading financial information in connection with the Merger Proxy. The Drulias complaint sought, among other things, damages and attorneys’ fees and costs. The terms of the Merger required us to indemnify the directors of Osprey.
On May 8, 2024, a putative class action relating to the Merger was filed in the Delaware Court of Chancery. The action was captioned Cheriyala v. Osprey Sponsor II, LLC (“Cheriyala”) (Del. Ch. 2024). The Cheriyala complaint asserted breach of fiduciary duty claims against the Osprey Board, the former officers of Osprey, and the Sponsor; aiding and abetting breach of fiduciary duty claims against Legacy BlackSky and certain directors and officers of Legacy BlackSky; and unjust enrichment claims against the Sponsor and an Osprey director. The Cheriyala complaint alleged the Sponsor and Osprey Board faced conflicts of interests with respect to the Merger, caused Osprey to pay an unfair price to acquire Legacy BlackSky, and made false or misleading disclosure of facts in the Merger Proxy. The Cheriyala complaint further alleges that Legacy BlackSky and certain of its directors and officers prepared misleading projections that did not accurately reflect Legacy BlackSky’s financial prospects, which aided and abetted the Sponsor’s and Osprey Board’s dissemination of misleading information in the Merger Proxy. The Cheriyala complaint sought, among other things, damages and attorneys’ fees and costs.
The Court of Chancery granted Drulias’ motion to (i) consolidate the Drulias and Cheriyala actions, and (ii) appoint Drulias as lead plaintiff, and Drulias’ counsel as lead counsel, in the consolidated action. On April 15, 2025, Drulias sought to withdraw as the lead plaintiff. That same day, Patrick Plumley (“Plumley”) moved to intervene as a plaintiff in the consolidated action. The Court of Chancery granted Cheriyala’s and Plumley’s stipulation to (i) permit Drulias to withdraw as the lead plaintiff, (ii) permit Plumley to intervene as a plaintiff, and (iii) appoint Cheriyala and Plumley as co-lead plaintiffs, and Cheriyala’s and Plumley’s counsel as co-lead counsel, in the consolidated action.
The parties attended private mediation on September 9, 2025. The parties thereafter reached an agreement on a stipulation of settlement memorializing the terms of the settlement, which was filed with the Court of Chancery on January 7, 2026 (the “Settlement”). In the Settlement, the parties agreed, among other things, that (i) the consolidated actions would be dismissed with prejudice, (ii) the defendants and the Company would be released from claims asserted in the consolidated actions or that could have been asserted in the actions relating to, among other things, the Merger, and (iii) in exchange, members of the class would be paid settlement consideration of $7.5 million, $7.4 million of which was funded from insurance proceeds pursuant to a plan of allocation set forth in the stipulation.
A hearing with the Court of Chancery to consider approval of the Settlement and related matters was held on April 17, 2026. During the hearing, the Court (i) certified the consolidated actions as class actions, (ii) approved the Settlement, including the plan of allocation, (iii) approved an award of fees and expenses to plaintiffs’ counsel
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payable out of the settlement fund, and (iv) approved the payment of an incentive fee to plaintiffs. The Court of Chancery entered its final judgment on April 21, 2026. The costs of this case, including the Settlement, have been substantially funded from insurance proceeds and are not expected to have a material impact on our operations or financial condition.
ITEM 1A. RISK FACTORS
For risk factors relating to our business, please refer to the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 and filed by us with the SEC. Any of those factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On December 12, 2025, we entered into an "at the market" (ATM) sales agreement with Deutsche Bank Securities Inc. and Craig-Hallum Capital Group LLC as our sales agents, under which we may offer and sell from time to time up to $100.0 million of shares of our common stock in negotiated transactions or transactions that are deemed to be an ATM offering. During the three months ended March 31, 2026, we raised gross proceeds of $15.0 million through the sale of 631,207 shares in our ATM offering. We sold such shares at an average purchase price per share of $23.76. After deducting commissions and other offering expenses associated with the ATM offering of $0.8 million, the net proceeds to us from the transactions were $14.2 million. We intend to use the net proceeds from the sale of the shares for working capital and other general corporate purposes.
We are subject to restrictions on the payment of cash dividends in our loan and debt agreements. For additional information on our indebtedness and related restrictions therein, see Note 11 —“Debt and Other Financing” of the notes to the consolidated financial statements and “Liquidity and Capital Resources” under Part I—Item 2— “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained within this Quarterly Report on Form 10-Q.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
During the three months ended March 31, 2026, none of our directors or officers adopted terminated
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ITEM 6. EXHIBITS
The documents listed below are incorporated by reference or are filed with this report, in each case as indicated therein.
Exhibit No. | Exhibit Description | Form | SEC File No. | Exhibit No. | Filing Date | Filed or Furnished Herewith | ||||||||||||||
31.1 | Certification of the Company’s Chief Executive Officer, Brian O’Toole, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||
31.2 | Certification of the Company’s Chief Financial Officer, Henry Dubois, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||
32.1* | Certification of the Company’s Chief Executive Officer, Brian O’Toole, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||
32.2* | Certification of the Company’s Chief Financial Officer, Henry Dubois, pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 | X | ||||||||||||||||||
101.INS | Inline XBRL Instance Document | X | ||||||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | X | ||||||||||||||||||
* This certification is deemed not filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act. | ||||||||||||||||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
May 7, 2026 | BlackSky Technology Inc. | ||||
By: /s/ Brian E. O’Toole | |||||
Brian E. O'Toole | |||||
Chief Executive Officer and Director | |||||
(Principal Executive Officer) | |||||
By: /s/ Henry Dubois | |||||
Henry Dubois | |||||
Chief Financial Officer | |||||
(Principal Financial Officer and Principal Accounting Officer) | |||||
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FAQ
How did BlackSky (BKSY) perform financially in Q1 2026?
BlackSky posted weaker results in Q1 2026. Revenue was $20.8 million, down from $29.5 million a year earlier, mainly due to lower mission solutions and advanced technology programs. Net loss widened to $29.7 million, compared with $12.8 million in the prior-year quarter.
What were the main revenue drivers for BlackSky (BKSY) in Q1 2026?
Revenue came primarily from space-based intelligence & AI services at $16.5 million, which was roughly flat year over year. Mission solutions contributed $2.0 million and advanced technology programs added $2.2 million, both down significantly compared with the same period in 2025.
How large was BlackSky’s (BKSY) net loss and EPS in Q1 2026?
BlackSky reported a net loss of $29.7 million for Q1 2026, versus a loss of $12.8 million in Q1 2025. Basic and diluted net loss per share was $0.82, compared with $0.42 per share in the prior-year quarter, reflecting the larger loss and higher share count.
What is BlackSky’s (BKSY) backlog and future revenue visibility?
BlackSky disclosed a backlog of $351.6 million as of March 31, 2026, representing contracted future work. It expects to recognize $69.3 million over the remaining nine months of 2026, $55.3 million in fiscal 2027, and $227.0 million in later periods.
What is BlackSky’s (BKSY) debt and cash position as of March 31, 2026?
BlackSky held $41.4 million in cash, cash equivalents, and restricted cash at March 31, 2026. Total long-term debt was $209.2 million, including $185.0 million of Convertible Senior Notes and $24.2 million of satellite launch vendor financing, before unamortized issuance costs.
How did derivative liabilities affect BlackSky’s (BKSY) Q1 2026 results?
Derivative liabilities had a notable impact. BlackSky recorded an $8.2 million loss on derivatives in Q1 2026, compared with a $1.9 million gain in Q1 2025. These fair value remeasurements, tied to warrants and Sponsor Shares, increased reported net loss but are non-cash items.