BlackSky, a satellite imaging company, announced a net income of $675,000 in the third quarter of 2023, marking its first-ever positive net income. However, CFO Henry Dubois clarified that this was primarily due to accounting treatment of the company’s warrant liability exposure. Discounting warrant gains and losses, BlackSky’s net loss in Q3 2023 showed a significant improvement of $3.9 million compared to the same period in 2022.
CEO Brian O’Toole stated that BlackSky is on track to achieve positive Adjusted EBITDA in the fourth quarter. The company reported a record revenue of $21.3 million in Q3, which represents a 26% increase year-over-year. The revenue growth was driven by increased demand from new and existing government customers in the U.S. and international markets for BlackSky’s imagery and software analytical services.
BlackSky’s professional and engineering services also saw significant growth, with revenue totaling $6.0 million in Q3 2023. This marked an 86% increase compared to the prior year period, attributed to new programs the company won this year.
O’Toole expressed optimism about the future, stating, “We continue to see growing demand from government agencies around the world for BlackSky space-based intelligence capabilities.” He highlighted the company’s success in converting its sales pipeline into new and expanded contracts, which, combined with effective cost management, puts BlackSky on a clear path towards long-term profitable growth.
In addition, BlackSky improved the cost of sales for its imagery and software analytical services, reducing it to 23% from 26% in the previous year’s quarter. The company adjusted its 2023 revenue outlook, narrowing the range to between $84 million and $90 million, representing a 33% increase over 2022 revenue.
BlackSky also increased its expectations for capital expenditures for the full year, now anticipating them to be between $48 million and $54 million. This increase is attributed to the company’s satellite constellation program, with the Gen-3 satellite launch scheduled for 2024. BlackSky reported a backlog of approximately $252 million at the end of September.
Furthermore, BlackSky announced the successful integration of its high frequency imagery services with the National Reconnaissance Office’s commercial imagery and architecture for the Electro-Optical Commercial Layer (EOCL) contract. This integration enables BlackSky to deliver its imagery to government end users via APIs and strengthens access and utilization of BlackSky’s imagery within the U.S. government.
Overall, BlackSky’s positive net income and revenue growth, along with successful contract acquisitions and technological advancements, position the company for continued success in the satellite imaging industry.