BlackSky secures $6 million defense contract extension with Investing.com
HERNDON, Va. – BlackSky Technology Inc. (NYSE: BKSY), a provider of real-time geospatial intelligence, has announced a contract extension worth approximately $6 million with an international defense customer. This increase brings the total annual commitment to approximately $18 million in Guaranteed access based on the company’s Gen-2 imaging services.
Gen-2 high-cadence, low-latency imaging services are part of BlackSky’s current capabilities, providing fast-revisited satellite imagery—an essential element of real-time surveillance and intelligence. The contract renewal underscores the market demand for BlackSky’s services, particularly in the defense and intelligence sectors.
According to BlackSky CEO Brian O’Toole, the company’s Gen-2 capabilities provide a level of continuous monitoring and transparency in key areas of interest. O’Toole also highlighted the anticipation of BlackSky’s Gen-3 capabilities, which are expected to improve spatial and temporal resolution for customers, providing images with very high resolution and revisit times and sub-hour delivery times.
BlackSky’s Assured access customers benefit from the ability to process and access thousands of high-resolution images and statistics every month, covering strategic areas such as border crossings, nuclear and port facilities, and other critical national security and economic infrastructure.
The company operates a constellation of small satellites in low earth orbit, designed to provide cost-effective imaging to meet customer needs. BlackSky’s Spectra AI software platform processes data from its constellation and other third-party sensors to deliver the necessary insights and statistics.
This announcement is based on a press release and contains forward-looking statements about BlackSky’s expectations of future events, which are subject to risks and uncertainties. BlackSky is headquartered in Herndon, VA, and its shares are publicly traded on the New York Stock Exchange.
In other recent news, BlackSky Technology Inc. reported full-year revenue growth of 29% in the second quarter of 2024, totaling $24.9 million. The company also received a multi-year contract with NASA worth up to $476 million to provide satellite re-observation data. In addition, BlackSky secured $40 million in new contracts and extensions, which contributed to positive adjusted EBITDA for the third consecutive quarter.
HC Wainwright boosted their price target on BlackSky stock from $2.50 to $15.00, maintaining a buy rating. Lake Street Capital Markets reiterated its buy rating on BlackSky, despite the quarterly revenue miss. The company’s analyst praised BlackSky’s financial position following the funding increase, which is believed to have netted the company approximately $85 million.
The company has announced plans to launch its first Gen-3 satellite in the fourth quarter of this year. This next-generation satellite capability is expected to allow BlackSky to charge higher prices and contribute to revenue growth. BlackSky Technology Inc. has been awarded a US Navy research contract to integrate optical intersatellite link terminals on its Gen-3 imaging satellites.
The company also announced a public offering of its Class A common stock priced at $4.00 per share, and Oppenheimer & Co. and Lake Street Capital Markets acting as joint book-runners. Finally, BlackSky’s Board of Directors approved a 1-for-8 reverse stock split of Class A common stock, aligned with BlackSky’s recent development.
InvestingPro Insights
The latest contract extension for BlackSky Technology Inc. demonstrates the company’s ability to protect and grow its customer base in the defense sector. However, a closer look at the company’s financial metrics reveals a more complicated picture.
According to InvestingPro data, BlackSky’s revenue growth has been impressive, as it has increased by 43.02% in the last twelve months from Q2 2024. This is in line with the company’s success in expanding its contracts and services. Additionally, the company has a strong gross margin ratio of 69.14%, which indicates good fundamental performance.
However, investors should note that BlackSky is currently unprofitable, with an operating income margin of -41.66% over the same period. This is reflected in one of InvestingPro’s Tips, which says that analysts do not expect the company to make a profit this year.
The stock’s performance has been challenging, as it is down 46.62% over the past month and down 56.11% over the past six months. This volatility is consistent with another InvestingPro Tip, which indicates that the stock generally trades with high price volatility.
Despite these challenges, BlackSky’s liquid assets exceed its short-term liabilities, suggesting some financial stability in the near term. However, the company is quickly burning through cash, which could be a concern for long-term investors.
For those interested in a comprehensive analysis, InvestingPro offers 14 additional tips for BlackSky Technology Inc., providing a deeper understanding of the company’s financial health and market conditions.
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