Amid a Favorable Environment and Rapid Overseas Growth, BlackSky Looks Attractive
BlackSky (BKSY) reported excellent second-quarter results in August, as its revenue surged 50% versus the same period a year earlier, easily surpassing analysts’ average estimate, and the company’s EBITDA, excluding certain items, turned positive.
BKSY is likely benefiting significantly from both continued elevated geopolitical tension and its meaningful technological advances.
Consequently, I believe that the company could easily deliver better-than-expected Q3 results. It is due to report its Q3 earnings on November 5.
As I pointed out in a previous column , the company “ is continuing to obtain sizable, new orders from Washington.” And now, in addition to BlackSky getting even more deals from the federal government, the firm’s international business is heating up meaningfully.
In light of all of these points, along with the company’s reasonably attractive valuation, I view the shares as an intriguing choice for growth investors.
BlackSky “provides intelligence using detailed satellite imagery.”
Impressive Q2 Results
The company’s top line jumped 50% versus the same period a year earlier to $33 million, well above the Street’s mean estimate of $30.68 million. Further its EBITDA, excluding certain items, came in at $4.7 million, much better than the adjusted EBITDA loss of $2.8 million that it delivered in Q2 of 2025.
Also noteworthy is that its “high-margin imagery and AI subscription services” reached an annualized run rate of $100 million in Q2.
Finally, its international subscription revenue jumped 150% year-over-year, while multi-year international contracts for space-based intelligence subscription services comprise(d) over 80% of (its) total funded backlog” as of the end of Q2 BKSY CEO Brian O’ Toole reported.
Technological Advances, Major, New Contracts, and a Reasonable Valuation
According to O’Toole, the company’s Gen 3 satellites are enabling the firm to generate “strong sales growth across” all of its offerings. What’s more, the satellites are causing the growth of its bottom line to accelerate, the CEO stated.
The Gen 3 products “continue to exceed expectations and are consistently delivering exceptional 35-centimeter imaging performance,” he said.
Further, many “major customers” are starting to view BlackSky’s satellites as “essential,” for “national security,” O’Toole reported.
In August, BKSY received “an international seven-figure, multi-year contract for combined Assured and On-Demand subscriptions.” Under the deal, the firm will provide “integrated, low-latency Gen-2 and Gen-3 imagery and AI-enabled analytics services. “
Last week, BlackSky obtained “an expanded seven-figure Gen-3 Assured contract with an international defense partner.” Due to geopolitical tensions, the latter customer’s subscription fees doubled “in less than six months,” the firm noted.
And in June, America’s National Reconnaissance Office (NRO) paid BlackSky additional fees to “accelerate the development” of its “ Broad area collection satellites.” The NRO’s eagerness for the spacecraft suggests that Washington;s demand for BKSY’s services is intensifying.
The shares are changing hands for 3.7 times analysts’ average 2027 sales estimate for the firm. Since analysts on average expect its sales to climb 33% this year and 37% in 2027, while the company’s EBITDA has turned positive, its valuation is quite attractive.
To read more about BKSY, please view my previous column.
I do not have a position in the stock.
