0001753539-26-000064
SEC filingBlackSky's Q1 2026 net loss widened 131.5% YoY to $29.7M, driven by an $8.2M derivative loss and a 29.7% revenue decline from a non-recurring mission solutions contract.
For the three months ended March 31, 2026, BlackSky Technology Inc. reported a net loss of $29.7 million, a significant 131.5% increase from the $12.8 million loss in the prior year period. This deterioration was primarily driven by a $10.1 million swing in non-operating items, specifically an $8.2 million loss on derivatives compared to a $1.9 million gain in Q1 2025, stemming from the re-measurement of warrant liabilities tied to fluctuations in the company's common stock price. Total revenue contracted sharply by 29.7% year-over-year to $20.8 million, while total costs and expenses decreased by a lesser 41.8%, leading to an operating loss of $18.5 million, a 54.7% widening from the $12.0 million loss in Q1 2025. The operating loss expansion was fueled by a 29.0% increase in Space-Based Intelligence & AI services costs and a 27.8% rise in depreciation and amortization, which outpaced the decline in mission solutions and advanced technology programs costs.
The company's revenue mix underwent a dramatic shift. Space-Based Intelligence & AI Services, the core subscription business, demonstrated resilience with revenue of $16.5 million, a marginal 1.8% decline, and grew to represent 79.6% of total revenue, up from 57.0% a year ago. However, costs for this segment rose 29.0% due to increased capacity demand from global events and higher direct labor fulfillment costs. In contrast, Mission Solutions revenue plummeted 79.6% to $2.0 million, as the prior year period included a large, non-recurring recognition of work-in-process costs on a customized satellite for a new customer. Advanced Technology Programs revenue also fell 21.8% to $2.2 million, attributed to the timing of project completions in 2025, partially offset by new R&D service contracts. Selling, general, and administrative expenses increased 5.2% to $22.6 million, driven by a 42.4% jump in stock-based compensation and higher international sales and marketing investments, partially offset by lower professional fees following the 2024 acquisition integration.
Management's outlook emphasizes continued investment in scaling the business, particularly through the procurement, build, and launch of its enhanced Gen-3 satellite constellation, which is already increasing depreciation costs. The company forecasts total non-cash stock-based compensation expense of $11.0 million for the remainder of 2026. BlackSky's liquidity position of $117.5 million, including $76.1 million in short-term investments and $39.4 million in cash, is deemed sufficient for near-term working capital and capital expenditure needs. The company retains flexibility to manage the timing of significant long-term capital outlays, including the development of new multispectral, large-area collection satellites. To fund these strategic initiatives, BlackSky continues to access capital markets, having raised $15.0 million in gross proceeds through its at-the-market (ATM) equity offering program during the quarter, and maintains $28.9 million in available vendor financing for future satellite launches.
Cash and cash equivalents stood at $39.4M with $76.1M in short-term investments (held-to-maturity, A-1 or higher rated). Total assets $371.7M; total liabilities $290.9M. Long-term debt net of issuance costs $202.7M comprising $185M Convertible Senior Notes (8.25% coupon, due 2033) and $24.2M satellite launch vendor financing. Stockholders' equity $80.8M after $29.7M net loss.
Backlog (remaining performance obligations) totaled $351.6M, expected to convert as $69.3M (nine months to Dec 2026), $55.3M (2027), and $227.0M thereafter. Related-party operational commitments noted with Ursa Space Systems ($42k due) and Thales Alenia Space. No large inventory or capacity purchase commitments disclosed.
No share repurchases or dividends. Debt activity included $3.0M additional vendor financing draws and $1.7M repayments. Capital expenditures and satellite work-in-process additions totaled $15.8M (cash) plus $3.9M accrued. Interest capitalized $0.5M.
Single operating and reportable segment. Revenue split: United States 47%, Rest of world 53%. U.S. federal government 45% of revenue; two international customers each >10%. Direct costs broken out by the three revenue streams in Note 4.
Operating cash flow turned negative at -$2.4M in Q1 2026, a sharp reversal from +$27.2M in Q1 2025. The decline was driven by a net loss of $29.7M (vs $12.8M) and unfavorable working capital changes, particularly a $3.6M decrease in contract liabilities and $3.9M decrease in other current liabilities. Capex (property and equipment plus satellite work in process) rose to $15.8M from $8.9M, reflecting increased satellite investment. Free cash flow (operating cash flow minus capex) was -$18.1M, compared to +$18.4M a year ago. Financing activities provided $9.5M, primarily from equity issuances. The company did not pay dividends or repurchase shares. The negative free cash flow and reliance on external financing highlight cash burn during a growth phase.