BlackSky Saw Sharply Higher Revenue, Narrower Loss in 2022 (Image Credit: Payload)
BlackSky Technology nearly doubled its revenue in 2022 while sharply narrowing its net loss as the company expanded its real-time satellite geospatial intelligence services (GEOINT).
BlackSky’s revenue for 2022 was $65.35 million, an increase of 92% over the $34.09 million in 2021. Fourth quarter revenue was $19.4 million, an increase over the $11.49 million from the same period in 2021.
BlackSky’s net loss was $74.34 million for 2022, a reduction from $245.64 million during the previous year.
“2022 was a foundational year for BlackSky, we won up to $1.3 billion in multi-year contracts, nearly doubled revenues to $65.4 million, and demonstrated significant margin performance; this high level of execution has put us on a path to achieving positive adjusted EBITDA in Q4 of 2023,” CEO Brian E. O’Toole said in a press release.
“Increased customer demand worldwide for BlackSky’s dynamic monitoring and analytic solutions drove record revenues in the fourth quarter growing 69% year-over-year to $19.4 million. In addition, we’ve successfully scaled our operations and are now delivering thousands of high-resolution images reliably each day with AI-driven analytics to customers around the world. I want to thank our team for all their hard work and dedication that enabled us to achieve all these milestones. We look forward to another strong year of execution and carrying this strong momentum into 2023,” O’Toole added.
BlackSky had cash, cash equivalents and other assets totaling $75 million at the end of the fourth quarter. Capital expenditures totaled $44.1 million last year.
BlackSky said it expects revenue of $90 million to $96 million in 2023. The company is projecting capital expenditures to range from $40 million to $45 million.
BlackSky announced a private placement of approximately $29.5 million from a syndicate of new and existing institutional investors. The company will use the net proceeds for general corporate purposes and investments in its space and software platforms.
BlackSky also announced a contract worth more than $150 million to provide advanced space-based tactical GEOINT-as-a-service to an international ministry of defense customer.
BlackSky’s financials are below.
BLACKSKY TECHNOLOGY INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(unaudited)
(in thousands, except per share amounts)
| Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | Year Ended December 31, 2022 | Year Ended December 31, 2021 | ||||
| Revenue | |||||||
| Imagery & software analytical services | $16,166 | $5,454 | $47,415 | $15,365 | |||
| Professional & engineering services | 3,251 | 6,035 | 17,935 | 18,720 | |||
| Total revenue | 19,417 | 11,489 | 65,350 | 34,085 | |||
| Costs and expenses | |||||||
| Imagery & software analytical service costs, excluding depreciation and amortization | 3,925 | 3,830 | 14,462 | 13,013 | |||
| Professional & engineering service costs, excluding depreciation and amortization | 3,783 | 6,348 | 21,365 | 21,735 | |||
| Selling, general and administrative | 20,222 | 28,676 | 79,672 | 86,655 | |||
| Research and development | 290 | 27 | 739 | 112 | |||
| Depreciation and amortization | 9,495 | 4,502 | 35,661 | 14,306 | |||
| Satellite impairment loss | — | — | — | 18,407 | |||
| Operating loss | (18,298) | (31,894) | (86,549) | (120,143) | |||
| Gain on debt extinguishment | — | 4,134 | — | 4,059 | |||
| Gain on derivatives | 1,183 | 35,047 | 11,812 | 23,885 | |||
| Income on equity method investment | 1,222 | 234 | 1,916 | 1,027 | |||
| Interest income | 452 | — | 1,116 | — | |||
| Interest expense | (1,669) | (1,502) | (5,425) | (5,165) | |||
| Other income (expense), net | 2,135 | 4 | 2,081 | (147,656) | |||
| (Loss) gain before income taxes | (14,975) | 6,023 | (75,049) | (243,993) | |||
| Income tax (expense) benefit | — | — | — | — | |||
| (Loss) income from continuing operations | (14,975) | 6,023 | (75,049) | (243,993) | |||
| Discontinued operations: | |||||||
| (Loss) gain from discontinued operations | — | (628) | 707 | (1,650) | |||
| Income tax (expense) benefit | — | — | — | — | |||
| (Loss) gain from discontinued operations, net of income taxes | — | (628) | 707 | (1,650) | |||
| Net (loss) income | (14,975) | 5,395 | (74,342) | (245,643) | |||
| Other comprehensive income | — | — | — | — | |||
| Total comprehensive (loss) income | $(14,975) | $5,395 | $(74,342) | $245,643) | |||
| Basic and diluted (loss) income per share of common stock: | |||||||
| (Loss) income from continuing operations | $(0.13) | $0.05 | $(0.64) | $(3.37) | |||
| (Loss) gain from discontinued operations, net of income taxes | — | ; (0.01) | 0.01 | (0.02) | |||
| Net (loss) income per share of common stock | $(0.13) | $0.04 | $(0.63) | $(3.39) | |||
| Weighted average common shares outstanding – basic and diluted | 119,064 | 113,645 | 117,821 | 72,462 |
Note: Effective January 1, 2022, the Company reorganized its classification on the consolidated statements of operations and comprehensive loss to better align the Company’s broad portfolio. As a result, the prior period amounts presented to reflect the impact of the reorganization have been recast.
BLACKSKY TECHNOLOGY INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except par value)
| December 31, 2022 | December 31, 2021 | ||
| Assets | |||
| Current assets: | |||
| Cash and cash equivalents | $34,181 | $165,586 | |
| Restricted cash | 2,835 | 2,518 | |
| Short-term investments | 37,982 | — | |
| Accounts receivable, net of allowance of $0 and $39, respectively | 3,112 | 2,629 | |
| Prepaid expenses and other current assets | 4,713 | 6,264 | |
| Contract assets | 5,706 | 1,678 | |
| Total current assets | 88,529 | 178,675 | |
| Property and equipment – net | 71,584 | 70,551 | |
| Operating lease right of use assets – net | 3,586 | — | |
| Goodwill | 9,393 | 9,393 | |
| Investment in equity method investees | 5,114 | 4,002 | |
| Intangible assets – net | 1,918 | 2,480 | |
| Satellite procurement work in process | 50,954 | 40,102 | |
| Other assets | 2,841 | 560 | |
| Total assets | $233,919 | $305,763 | |
| Liabilities and stockholders’ equity | |||
| Current liabilities: | |||
| Accounts payable and accrued liabilities | $14,367 | $10,837 | |
| Amounts payable to equity method investees | 3,728 | 5,613 | |
| Contract liabilities – current | 6,783 | 11,266 | |
| Other current liabilities | 2,048 | 2,819 | |
| Total current liabilities | 26,926 | 30,535 | |
| Liability for estimated contract losses | 714 | 6,054 | |
| Long-term contract liabilities | 109 | 568 | |
| Operating lease liabilities | 3,132 | — | |
| Derivative liabilities | 5,113 | 16,925 | |
| Long-term debt – net of current portion | 76,219 | 71,408 | |
| Other liabilities | 2 | 653 | |
| Total liabilities | 112,215 | 126,143 | |
| Stockholders’ equity: | |||
| Class A common stock, $0.0001 par value-authorized, 300,000 shares; issued, 121,938 and 117,160 shares; outstanding, 119,508 shares and 114,452 shares as of December 31, 2022 and 2021, respectively. | 12 | 11 | |
| Additional paid-in capital | 666,973 | 650,518 | |
| Accumulated deficit | (545,281) | (470,909) | |
| Total stockholders’ equity | 121,704 | 179,620 | |
| Total liabilities and stockholders’ equity | $233,919 | $305,763 |
BLACKSKY TECHNOLOGY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
| Years Ended December 31, 2022 | Years Ended December 31, 2021 | ||
| Cash flows from operating activities: | |||
| Net loss | $(74,342) | $(245,643) | |
| Gain (loss) from discontinued operations, net of income taxes | 707 | (1,650) | |
| Loss from continuing operations | (75,049) | (243,993) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||
| Depreciation and amortization expense | 35,661 | 14,306 | |
| Operating lease right of use assets amortization | 1,640 | — | |
| Gain on debt extinguishment | — | (4,059) | |
| Bad debt (recovery) expense | (22) | 58 | |
| Stock-based compensation expense | 20,025 | 42,571 | |
| Loss on issuance of 2021 convertible Bridge Notes | — | 99,669 | |
| Issuance costs for derivative liabilities and debt carried at fair value | — | 48,009 | |
| Amortization of debt discount and issuance costs | 1,805 | 1,807 | |
| Gain on equity method investment | (1,916) | (1,027) | |
| Loss on disposal of property and equipment | — | 24 | |
| Gain on derivatives | (11,812) | (23,885) | |
| Satellite impairment loss | — | 18,407 | |
| Interest income | (656) | — | |
| Other, net | 106 | — | |
| Changes in operating assets and liabilities: | |||
| Accounts receivable | (461) | 216 | |
| Contract assets – current and long-term | (5,996) | 2,118 | |
| Prepaid expenses and other current assets | 1,413 | (5,207) | |
| Other assets | (12) | (309) | |
| Accounts payable and accrued liabilities | (75) | 2,543 | |
| Other current liabilities | (1,180) | (2,680) | |
| Contract liabilities – current and long-term | (4,942) | (5,262) | |
| Liability for estimated contract losses | (5,340) | (198) | |
| Other liabilities | 2,355 | 3,020 | |
| Net cash used in operating activities | (44,456) | (53,872) | |
| Cash flows from investing activities: | |||
| Purchase of property and equipment | (11,677) | (1,266) | |
| Satellite procurement work in process | (32,385) | (62,643) | |
| Purchase of short-term investments | (50,343) | — | |
| Proceeds from maturities of short-term investments | 13,000 | — | |
| Purchase of domain name | — | (7) | |
| Proceeds from equity method investment | 804 | 302 | |
| Cash flows used in investing activities – continuing operations | (80,601) | (63,614) | |
| Cash flows used in investing activities – discontinued operations | (978) | — | |
| Net cash used in investing activities | (81,579) | (63,614) | |
| Cash flows from financing activities: | |||
| Proceeds from recapitalization transaction, net of payment of equity issuance costs | — | 244,880 | |
| Payments of transaction costs related to Sponsor Shares | — | (291) | |
| Proceeds from issuance of debt | — | 58,573 | |
| Proceeds from options exercised | 47 | 130 | |
| Proceeds from warrants exercised | — | 163 | |
| Capital lease payments | — | (2) | |
| Debt payments | — | (22,198) | |
| Payments for deferred offering costs | (31) | — | |
| Payments for debt issuance costs | — | (6,238) | |
| Withholding tax payments on vesting of restricted stock units | (5,069) | — | |
| Net cash (used in) provided by financing activities | (5,053) | 275,017 | |
| Net (decrease) increase in cash, cash equivalents, and restricted cash | (131,088) | 157,531 | |
| Cash, cash equivalents, and restricted cash – beginning of year | 168,104 | 10,573 | |
| Cash, cash equivalents, and restricted cash – end of period | $37,016 | $168,104 |
BLACKSKY TECHNOLOGY INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(unaudited)
(in thousands)
| Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | Year Ended December 31, 2022 | Year Ended December 31, 2021 | ||||
| Net loss | $(14,975) | $5,395 | $(74,342) | $ (245,643) | |||
| Interest income | (452) | — | (1,116) | — | |||
| Interest expense | 1,669 | 1,502 | 5,425 | 5,165 | |||
| Depreciation and amortization | 9,495 | 4,502 | 35,661 | 14,306 | |||
| Loss on issuance of Bridge Notes, including debt issuance costs expensed for debt carried at fair value | — | — | — | 147,387 | |||
| Stock-based compensation expense | 3,636 | 13,306 | 20,025 | 42,571 | |||
| Gain on derivatives | (1,183) | (35,047) | (11,812) | (23,885) | |||
| Satellite impairment loss | — | — | — | 18,407 | |||
| Proceeds from earn-out payment | (2,000) | — | (2,000) | — | |||
| Loss (gain) from discontinued operations, net of income taxes | — | 628 | (707) | 1,650 | |||
| Severance | 435 | — | 1,196 | — | |||
| Income on equity method investment | (1,222) | (234) | (1,916) | (1,027) | |||
| Forgiveness of non-trade receivables | — | — | 106 | — | |||
| Contingent legal liability | — | (301) | — | 399 | |||
| Transaction costs associated with derivative liabilities | — | — | — | 291 | |||
| Gain on debt extinguishment | — | (4,134) | — | (4,059) | |||
| Adjusted EBITDA | $(4,597) | $(14,383) | $(29,480) | $(44,438) |
