BlackSky Technology Inc (NYSE:BKSY) Reports Mixed Q3 2025 Results with Revenue Miss and Strong International Contract Growth

BlackSky Technology Inc (NYSE:BKSY) reported third quarter 2025 financial results that presented a mixed picture for investors, with significant top-line misses contrasted against a strengthened balance sheet and growing international contract awards. The company's performance in both revenue and earnings per share fell short of analyst expectations, contributing to negative market sentiment in pre-market trading.

Earnings and Revenue Performance

The space-based intelligence company reported financial metrics that diverged significantly from Wall Street projections for the quarter ended September 30, 2025.

• Revenue: $19.6 million actual versus $29.0 million estimated
• EPS (Non-GAAP): -$0.35 per share actual versus -$0.48 per share estimated

While the company's loss per share was narrower than analysts had anticipated, the substantial revenue shortfall of approximately 32% appears to be the primary driver behind the stock's negative reaction. The market typically places heavy emphasis on revenue growth, particularly for companies in the scaling phase of their development.

Market Reaction and Context

The earnings release triggered a sharp negative response in pre-market trading, with the stock declining approximately 10.4%. This reaction occurs within a broader context of weak performance over recent periods.

• Pre-market performance: -10.4%
• One-month performance: -37.5%
• Two-week performance: -13.5%

The significant pre-market drop suggests investors are focusing more on the revenue miss and potential concerns about near-term growth trajectory rather than the better-than-expected EPS figure.

Quarterly Business Highlights

Despite the financial misses, BlackSky's press release highlighted several operational achievements and a shifting business mix toward international customers.

• Contract Awards: Secured over $60 million in new contracts during the quarter, with approximately 91% of the company's $322.7 million backlog now coming from international sources
• Major Deals: Won a multi-year contract valued at over $30 million with an international defense customer for Gen-3 tactical ISR services
• Balance Sheet: Cash position strengthened to $147.6 million, up significantly from previous quarters, bolstered by a convertible note offering completed in July
• Constellation Development: Next Gen-3 satellite is at the launch site with anticipated launch in the coming weeks

CEO Brian E. O'Toole emphasized that "strong international demand for our space-based intelligence solutions" is currently outpacing near-term U.S. government business, citing increased budgets and accelerated acquisition cycles among sovereign nations worldwide.

Financial Position and Outlook

The company maintained its full-year 2025 guidance for revenue, adjusted EBITDA, and capital expenditures, though specific numerical targets were not disclosed in the press release. This maintained guidance will be closely scrutinized against analyst expectations for the full year.

• Analyst Full-Year 2025 Sales Estimate: $117.9 million
• Analyst Q4 2025 Sales Estimate: $35.9 million

The company's ability to meet these full-year estimates will depend heavily on converting its substantial backlog into recognized revenue in the coming quarters, particularly given the noted reduction in the Electro-Optical Commercial Layer contract with the NRO and other U.S. government budget uncertainties mentioned in the release.

Operational Metrics and Challenges

The quarter revealed both strengths and challenges in BlackSky's operational execution:

• Cost Management: Cost of sales as a percentage of revenue increased to 35% from 29% in the prior year period
• Cash Operating Expenses: Rose to $18.2 million from $15.6 million year-over-year, primarily due to overhead expenses related to acquired LeoStella operations
• Adjusted EBITDA: Posted a loss of $4.5 million compared to positive $0.7 million in the third quarter of 2024

The company attributed the year-over-year decrease in adjusted EBITDA primarily to lower EOCL revenues and overhead expenses from the LeoStella operations acquired in November 2024.

For more detailed earnings analysis and future estimates, visit BlackSky's earnings estimates page.

Disclaimer: This article is not investment advice. Investors should conduct their own research and consult with financial advisors before making investment decisions.