ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. As discussed in the section titled “Special Note Regarding Forward Looking Statements,” the following discussion and analysis contains forward looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed in the section titled “Risk Factors” under Part I, Item IA in this Annual Report on Form 10-K. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “BlackSky,” “the Company,” “we,” “us” and “our” refer to the business and operations of BlackSky Holdings, Inc. (“Legacy BlackSky”) and its consolidated subsidiaries prior to the completion of its merger on September 9, 2021 with a wholly-owned subsidiary of Osprey Technology Acquisition Corp. (the “Merger”) and of BlackSky Technology Inc. and its consolidated subsidiaries, following the closing of the Merger.
Company Overview
Founded in 2014, BlackSky is a space technology company that delivers real-time imagery, analytics and high-frequency monitoring of the world’s most critical and strategic locations, economic assets, and events. By taking a software-first technology approach, we are delivering real time space-based intelligence at disruptive speed, scale and economics. BlackSky is trusted by many of the most demanding U.S. and international government agencies and commercial businesses around the world. We are defining a new category of space-based intelligence products and services centered upon real-time imagery and automated analytics, delivered through an easy-to-use interface that operates seamlessly with our high-revisit and low latency satellite constellation. Our first-of-its-kind, purpose-built, secure artificial intelligence ("AI")-enabled space-to-ground architecture helps customers see, understand and anticipate change for a decisive strategic advantage. BlackSky can provide dynamic hourly monitoring over many of the most strategic locations on Earth up to 15 times per day from dawn to dusk.
BlackSky designs, builds, owns and operates the industry’s most advanced, purpose-built commercial, real-time intelligence system that combines the power of the BlackSky Spectra® tasking and analytics software platform with our high resolution, low earth orbit ("LEO") small satellite (“smallsat” or “smallsats”) constellation. Our Gen-3 satellites (“Gen-3”) include significantly enhanced capabilities, including 35-centimeter electro-optical imaging resolution and 1-meter short-wave infrared imaging technology for expanded imaging capabilities in low-light or at night. The Gen-3 constellation also features improved data communications capabilities that significantly increase the end-to-end delivery speed of intelligence products. BlackSky Spectra is a first-of-its-kind commercial tasking, analytics and multi-intelligence data-fusion software platform that helps customers monitor activities from space. The BlackSky constellation is the primary on-orbit data source and communications architecture that delivers space-based information to BlackSky Spectra. BlackSky’s satellites fly in unconventional, inclined orbits, and with built-in automated systems. Our constellation can deliver time-diverse, dawn-to-dusk, rapid revisit imagery, and analytics— with no humans in the loop. BlackSky Spectra provides end users the ability to augment proprietary data collected from our constellations with input from third-party sensors.
Customers experience the value of BlackSky’s space-based intelligence and AI capabilities through subscription-based On-Demand and Assured product offerings. Our Mission Solutions offering allows customers the ability to acquire, own, and operate their own customized Gen-3 satellite(s) and space-to-ground system(s). These solutions leverage our industry-leading, end-to-end satellite to ground infrastructure hardware and software technology stack. BlackSky Mission Solutions give nations the flexibility of owning space assets while having scalable access to additional capacity through BlackSky’s proprietary constellation. BlackSky also offers advanced technology program services that allow customers to conduct advanced R&D using aspects of BlackSky’s space-to-ground system that further enhance the capabilities that we can offer certain customers, or that further integrates BlackSky’s intelligence products into customer secure operational workflows. Our product and service offerings are designed to provide synergy to our customers. For example, when our Mission Solutions offerings are acquired in conjunction with our subscription data services, customers enjoy the benefits of speed, scale and reliability without having to own and operate a large constellation. Collectively, our offerings create a unified value proposition that
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supports national security, supply chain resilience, economic intelligence, and other critical decision-making requirements for customers worldwide.
In November 2024, we acquired the remaining 50% of the common units of BlackSky Satellite Systems LLC, f/k/a LeoStella LLC, (“BlackSky Satellite Systems” or “LeoStella”), which is now a wholly-owned subsidiary of BlackSky. The acquisition resulted in a vertical integration that enables us to improve control over our Gen-3 satellite supply chain and production operations by controlling our satellites through the entire design, manufacturing, and operation process, thereby optimizing performance per unit cost. BlackSky Satellite Systems's financial results are included in our operating results for the periods following the acquisition date.
In July 2025, we issued $185.0 million aggregate principal amount of Convertible Senior Notes due August 1, 2033 (the “Convertible Senior Notes”) in a private offering. With the proceeds from the issuance of the Convertible Senior Notes, we repaid all principal and accrued interest from the loans from related parties and the commercial bank line. See “—Liquidity and Capital Resources” and Note 15—“Debt and Other Financing” for further detail. We expect the Convertible Senior Notes will increase our liquidity, strengthen our balance sheet, and put us in a position to unlock additional growth opportunities
Components of Operating Results
Revenue
Our revenue is generated by selling space-based intelligence & AI services through our BlackSky Spectra software platform and by providing mission solutions and advanced technology programs to strategic customers on a project basis.
•Space-Based Intelligence and AI Services Revenue: We offer high-revisit, high-resolution, satellite imaging products including dawn-to-dusk, 35 cm resolution electro-optical and nighttime imagery. Through our BlackSky Spectra software platform, customers can directly task our constellation to collect and deliver imagery over specific locations, sites, and regions that are critical to their operations. Customers also have access to multi-frame area 2x1 to capture areas larger than the single frame scene size, like large airports or large ports, burst to analyze motion with five frames collected in a single satellite pass, and stereo pairs (two frames) or sets (fives frames) to build and update 3D products on short timelines. All imagery products are included in our On-Demand and Assured subscription plans. BlackSky also offers non-Earth imagery services for monitoring orbiting spacecraft and other objects of interest.
Our AI-generated analytics are also offered on a subscription basis and provide customers with automated access to our site monitoring, event monitoring, and global data services. Our object change and anomaly detection, site monitoring, and enhanced analytics services can detect key pattern-of-life changes in critical locations. These critical locations include infrastructure, such as maritime ports, airfields, and construction sites; retail activity; commodities stockpiles; and other sites that contain critical commodities and supply chain inventory. Our AI-enabled analytics provide for the automated detection and classification of more than 30 objects of tactical interest.
We generally structure our customer agreements as annual or multi-year subscription contracts. We offer pricing tiers that enable the customer to manage collection priorities. These options provide customers with flexibility to utilize our space-based intelligence and AI services in a manner that best suits their business needs. For example, during critical events, customers may pay a premium to prioritize their monitoring and collection requirements, while at other times, customers can select lower priority collections to allow for more economical use of their overall subscription.
•Mission Solutions Revenue: We develop and deliver customized advanced satellites and payload systems for specific strategic customers that desire to leverage our capabilities in mission systems engineering and operations, ground station operations, software, analytics and systems development. By integrating our Gen-3 satellites, secure ground infrastructure, launch support, operations software, and training, this offering delivers rapid access to actionable intelligence, enhances mission continuity in secure or air-gapped environments, and supports national self-reliance in defense decision-making. Mission solutions empower customers to retain ownership and custody of satellites, tasking, and data while operating within their own borders and security frameworks. With proven, military-grade technology, globally distributed
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manufacturing, high-availability on-orbit performance, and transfer-of-knowledge programs that develop local workforce expertise, we enable partners to confidently build, operate, and evolve customized sovereign space architectures that strengthen national security and modern deterrence. These systems are sold to government customers under fixed price contracts and are often sold with operating and imagery service subscriptions. We retain rights to intellectual property for developed technology of certain systems. We also provide software systems engineering development services to support the integration of high volume and mass quantities of data in their operating platforms.
•Advanced Technology Programs Revenue: We provide advanced technology solutions that enhance customer adoption and operational integration of our technology. These services include support for customer-specific software feature development, systems testing, and training, as well as the integration of our imagery and analytics products into a customer’s existing processes and workflows. These services can also include the development and expansion of our current sensor capabilities. Through these services, we help customers tailor, expand and optimize their use of our platforms and mission capabilities.
Mission solutions and advanced technology programs revenue contain estimates that may result in the recognition of revenue in a current period for performance obligations that were satisfied or partially satisfied in a prior period. For the impacts of changes in estimates on our contracts, see Note 2—“Basis of Presentation and Summary of Significant Accounting Policies” of the notes to the consolidated financial statements contained within this Annual Report on Form 10-K.
Costs and Expenses
Our costs and expenses, which includes stock-based compensation expense for those employees who support each category, are incurred from the following categories:
•Space-Based Intelligence & AI services Costs: primarily include third-party data and imagery, ground station service payments, internal labor to support our ground stations and space operations, and compute/storage costs to facilitate our expanding AI/ machine learnings ("ML") functionality. Costs are expensed as they are incurred except for incremental costs to obtain a contract, which are primarily sales commissions on contracts greater than one year, are capitalized and amortized to selling, general, and administrative expenses on a systematic basis consistent with the transfer of goods and services and directly identifiable costs to fulfill a contract. Expense related to stock-based payments is classified in the consolidated statements of operations and comprehensive loss based upon the classification of each employee's cash compensation.
•Mission Solutions Costs: primarily include the cost of direct materials to build and test specific, customized satellite and payload systems components, such as the communications system, payload demands, and sensor integration, as well as internal labor for design and engineering. These costs are incurred in support of long-term development contracts.
•Advanced Technology Programs Costs: primarily include the cost of internal labor and external subcontract labor costs for our customer-centric software service solutions.
Operating Expenses
Our operating expenses are incurred from the following categories:
•Selling, General, and Administrative Expense: consists of salaries, taxes, and benefit costs, product development costs, professional fees, and other expenses which include other personnel-related costs, stock-based compensation expense for those employees who generally support our business and operations, and occupancy costs.
•Research and Development Expense: consists of employees’ salaries, taxes, and benefits costs incurred while researching next generation space and ground architectures in support of our long-term strategy. With our acquisition of BlackSky Satellite Systems in November 2024, research and development expense also includes our investments in satellite design and functionality. Additionally, we employ and classify third-party vendors who help fulfill our strategic projects as research and development expense. We intend to
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continue to invest appropriate resources in research and development efforts, as we believe that investment is critical to maintaining our competitive position.
•Depreciation Expense: is related to property and equipment, which mainly consist of operational satellites and capitalized internal-use software. Amortization expense is related to intangible assets, which mainly consist of customer relationships. We expect to incur additional depreciation expense when each Gen-3 satellite is launched and placed into service.
Results of Operations for the Years Ended December 31, 2025 and 2024
Effective January 1, 2025, we reclassified our captions on the consolidated statements of operations and comprehensive loss to better align with our increasing portfolio of mission solutions product offerings and advanced technology program service offerings. Revenue and costs that were previously classified as imagery & software analytical services are now classified as space-based intelligence & AI services. Professional & engineering services are now either classified as mission solutions if they are related to our product offerings or advanced technology programs if they are related to our service offerings. As a result, for the year ended December 31, 2024, the amounts presented have been reclassified to conform to the current year presentation.
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Results of Operations for the Years Ended December 31, 2025 and 2024
The following table provides the components of results of operations for the years ended December 31, 2025 and 2024:
Years Ended December 31, $ %
(dollars in thousands)
Revenue
Costs and expenses
Income on equity method investments — 879 (879) (100.0) %
Other income, net 60 3 57 NM
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Revenue
Years Ended December 31, $ %
(dollars in thousands)
% of total revenue 61.1 % 68.6 %
% of total revenue 19.9 % 5.8 %
% of total revenue 19.0 % 25.6 %
Space-Based Intelligence and AI Services Revenue
Space-based intelligence & AI services revenue decreased for the year ended December 31, 2025 as compared to the same period in 2024, as a result of a reduction in imagery revenue from one of our U.S. Government contracts with the National Reconnaissance Office ("NRO"). This decrease was partially offset by new imagery and analytics subscription orders and renewals from other existing customers.
Mission Solutions Revenue
Mission solutions revenue increased for the year ended December 31, 2025 as compared to the same period in 2024, primarily from execution on a contract to deliver a customized Earth observation satellite to a new customer.
Advanced Technology Programs Revenue
Advanced technology programs revenue decreased for the year ended December 31, 2025 as compared to the same period in 2024, largely due to the completion of services performed for existing customers. This decrease was partially offset by a new contract to provide advanced satellite control software to an existing customer.
Costs and Expenses
Years Ended December 31, $ %
(dollars in thousands)
Space-Based Intelligence and AI Service Costs
Space-based intelligence & AI services costs, excluding depreciation and amortization, increased for the year ended December 31, 2025 as compared to the same period in 2024, due to an increase in third-party imagery fulfillment costs.
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Mission Solutions Costs
Mission solutions costs, excluding depreciation and amortization, increased for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to the impact of incurred work in process costs under a satellite procurement contract that began in 2025. This increase was partially offset by fewer direct material costs incurred on several existing contracts as well as contracts completed in 2024 and 2025.
Advanced Technology Programs Costs
Advanced technology programs costs, excluding depreciation and amortization, slightly decreased for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to contracts completed in 2024 and 2025.
Selling, General, and Administrative
Years Ended December 31, $ %
(dollars in thousands)
Selling, general, and administrative expenses increased during the year ended December 31, 2025 as compared to the same period in 2024, primarily related to the inclusion of BlackSky Satellite Systems's operations for a full year in 2025 versus only two months in 2024. Additionally, information technology and other administrative expenses increased largely due to costs associated with initiatives to optimize corporate business operational systems and maintain our offices and facilities during 2025. Stock-based compensation expense increased as a result of an increase in the average stock price at the time of the grant of new stock awards in 2025. Professional fees increased as a result of one-time transaction costs and accounting fees incurred during 2025 that were associated with finalizing the BlackSky Satellite Systems acquisition that closed in late 2024.
The following is our forecast for total restricted stock units ("RSUs") non-cash stock-based compensation expense as of December 31, 2025, which, in addition to the amounts recognized in selling, general, and administrative expenses, includes the portion that will be capitalized or classified in space-based intelligence & AI services, mission solutions, or advanced technology programs costs:
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(in thousands)
For the years ending December 31,
Research and Development
Years Ended December 31, $ %
(dollars in thousands)
Research and development expense decreased for the year ended December 31, 2025, as compared to the same period in 2024, due to the completion of certain development projects in late 2024 and early 2025.
Depreciation and Amortization
Years Ended December 31, $ %
(dollars in thousands)
Depreciation expense from satellites decreased for the year ended December 31, 2025 as compared to the same period in 2024 because a number of Gen-2 satellites became fully depreciated in 2024. These decreases were partially offset by the depreciation expense for our Gen-3 satellites launched in 2025.
Depreciation expense from all other property and equipment increased for the year ended December 31, 2025 as compared to the same period in 2024. This increase was primarily driven by the depreciation of increasing asset balances for internal-use software as we continue to invest in our BlackSky Spectra software platform, features for our Gen-3 constellation, and internal infrastructure. The increase was also related to the recognition of depreciation expense for assets recorded as part of our November 2024 acquisition of BlackSky Satellite Systems.
Amortization expense increased for the year ended December 31, 2025 as compared to the same period in 2024 as a result of intangible assets acquired by the Company in the fourth quarter of 2024.
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Non-Operating Expenses
Years Ended December 31, $ %
(dollars in thousands)
Income on equity method investments — 879 (879) (100.0) %
Other income, net 60 3 57 NM
Loss on derivatives
Our common stock price significantly drives fluctuations in our equity warrants and other equity instruments that we classify as derivative liabilities in our consolidated balance sheets and measure at fair value. Fluctuations to these instruments are inversely related to changes in our common stock price, the volatility of the markets, and the duration of the equity warrants.
We re-measure our outstanding derivative liabilities to fair value at each reporting date. In July 2025, holders exercised 611 thousand of our March 2023 Private Placement Warrants and the exercised warrants were re-measured to fair value on their exercise dates. Any gains or losses recorded upon re-measurement in the applicable period are non-cash fair value adjustments. These re-measurements of derivative liabilities generated a net loss during each of the years ended December 31, 2025 and 2024.
Income on equity method investments
In November 2024, we acquired the remaining 50% of the common units of BlackSky Satellite Systems, f/k/a LeoStella, which is now a wholly-owned subsidiary of the Company. As of the date of acquisition, BlackSky Satellite Systems's results of operations are now included in our consolidated financial statements. In conjunction with this business combination, we recognized a gain of $0.9 million related to the step up acquisition during the year ended December 31, 2024.
Loss on debt extinguishment
The loss on debt extinguishment incurred during the year ended December 31, 2025 was due to prepayment fees and third-party costs from the early repayment of the related party loans and commercial bank line in July 2025.
Interest income
Interest income increased during the year ended December 31, 2025 as a result of higher short-term investment balances during the period as compared to the same period in 2024.
Interest expense
Interest expense increased during the year ended December 31, 2025, as compared to the same period in 2024 because our outstanding debt increased from $109.0 million as of December 31, 2024 to $207.9 million as of December 31, 2025. In July 2025, we decreased the average interest rate of our outstanding debt when we repaid $100.2 million of loans from related parties in their entirety, which had a stated interest rate of 12% upon repayment, and issued $185.0 million of Convertible Senior Notes with a stated interest rate of 8.25%.
Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP, management utilizes certain non-GAAP performance measures, such as Adjusted EBITDA, for purposes of evaluating our ongoing operations and for internal planning and forecasting purposes. Our management and board of directors believe that this non-GAAP
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operating measure, when reviewed with our GAAP financial information, provides useful supplemental information to investors in assessing our operating performance.
Adjusted EBITDA
Adjusted EBITDA is defined as net income or loss attributable to us before interest income, interest expense, income tax expense or benefit, depreciation and amortization, as well as significant non-cash and/or non-recurring expenses as our management believes these items are not useful in evaluating our core operating performance. These items include, but are not limited to, stock-based compensation expense; unrealized (gain) loss on certain warrants/shares classified as derivative liabilities; loss on debt extinguishment; non-recurring transaction costs; litigation, settlements, and related costs; severance; and impairment, obsolescence, and asset disposals. We have presented Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the exclusion of certain items in calculating Adjusted EBITDA can produce a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA provides useful information in understanding and evaluating our operating results. In addition, we believe that Adjusted EBITDA provides additional information for investors to use in evaluating our ongoing operating results and trends. This non-GAAP measure provides investors with incremental information for the evaluation of our performance after isolation of certain items deemed unrelated to our core business operations.
Adjusted EBITDA is presented as a supplemental measure to our GAAP measures of performance. When evaluating Adjusted EBITDA, you should be aware that we may incur future expenses similar to those excluded when calculating this measure. In addition, our presentation of this measure should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Furthermore, our computation of Adjusted EBITDA may not be directly comparable to similarly titled measures computed by other companies, as the nature of the adjustments that other companies may include or exclude when calculating Adjusted EBITDA may differ from the adjustments reflected in our measure. Because of these limitations, Adjusted EBITDA should not be considered in isolation, nor should this measure be viewed as a substitute for the most directly comparable GAAP measure, which is net loss. We compensate for the limitations of non-GAAP measures by relying primarily on our GAAP results. You should review the reconciliation of our net loss to Adjusted EBITDA below and not rely on any single financial measure to evaluate our performance.
The table below reconciles our net loss to Adjusted EBITDA for the years ended December 31, 2025 and 2024. As noted above, on November 6, 2024, we acquired the remaining 50% of the common units of BlackSky Satellite Systems, f/k/a LeoStella, which is now a wholly-owned subsidiary of BlackSky. In conjunction with the business combination, the Company recognized a gain of $0.9 million related to the step up acquisition during the year ended December 31, 2024. Other than the gain related to the step up acquisition, we did not record any percentage of BlackSky Satellite Systems's estimated net loss during the year ended December 31, 2024 since our investment in
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LeoStella was $0 as of December 31, 2023. After the acquisition in 2024, BlackSky Satellite Systems's financial results are fully consolidated in our consolidated financial statements.
Years Ended December 31,
(in thousands)
Loss on debt extinguishment 4,140 —
Non-recurring transaction costs 1,556 512
Litigation, settlements, and related costs 645 355
Impairment, obsolescence, and asset disposals 364 131
Income on equity method investment — (879)
Liquidity and Capital Resources
As of December 31, 2025, our existing sources of liquidity included cash and cash equivalents and short-term investments. Our cash and cash equivalents excluding restricted cash totaled $42.4 million and $13.1 million as of December 31, 2025 and 2024, respectively, and our short-term investments totaled $82.0 million and $39.4 million as of December 31, 2025 and 2024, respectively. We have incurred year to date losses and generated negative cash flows from operations since our inception in September 2014. As of December 31, 2025, we had an accumulated deficit of $726.4 million.
Our short-term liquidity as of December 31, 2025 was comprised of the following:
(in thousands)
Cash and cash equivalents $ 42,445
Restricted cash 1,103
Short-term investments(1) 82,006
(1) Short-term investments were included in cash flows from investing activities in the consolidated statements of cash flows.
Our short-term liquidity as of December 31, 2025 was $125.6 million. We expect cash and cash equivalents, short-term investments, and cash generated from operating activities to be sufficient to meet our working capital and capital expenditure needs for the foreseeable future. Our future long-term capital requirements will depend on many factors, including our Gen-3 satellite and mission solutions production needs, launch and insurance costs, our growth rate, customer demand for capacity, the timing and extent of spending to support solution development efforts, our ongoing investments in technology infrastructure, and the continuing market acceptance of our products and services.
Convertible Senior Notes
In July 2025, we issued $185.0 million aggregate principal amount of Convertible Senior Notes in a private offering. The Convertible Senior Notes will mature on August 1, 2033 unless earlier converted, redeemed or
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repurchased. The Convertible Senior Notes will bear interest at a rate of 8.25% per year, payable semiannually in arrears on February 1 and August 1 of each year, beginning on February 1, 2026.
Holders may convert their Convertible Senior Notes at their option at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, we will pay or deliver, as the case may be, shares of our Class A common stock, cash, or a combination of cash and shares of our Class A common stock, at our election. The conversion rate of the Convertible Senior Notes will initially be 27.1909 shares of BlackSky’s Class A common stock per $1,000 principal amount of Convertible Senior Notes (equivalent to an initial conversion price of approximately $36.78 per share of Class A common stock). We may not redeem the Convertible Senior Notes prior to August 4, 2028. We may redeem for cash all or any portion of the Convertible Senior Notes, at our option, on or after August 4, 2028 and prior to the 26th scheduled trading day immediately preceding the maturity date, if (1) the last reported sale price of our Class A common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption and (2) certain liquidity conditions are satisfied, at a redemption price equal to 100% of the principal amount of the Convertible Senior Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
Satellite Launch Vendor Financing
We have also entered into two vendor financing agreements to fund the costs of multiple satellite launches. Our November 2023 agreement provides for a $27.0 million borrowing commitment and payments accrue interest at 12.6% per annum while our November 2025 agreement is for a $30.6 million borrowing commitment and payments accrue interest at 9.50% per annum. A portion of the vendor financing agreements can be drawn down equally per satellite launch and will be repaid quarterly on a pro-rata basis across a three-year period after each successful launch milestone. Interest begins to accrue on each launch date.
We may prepay either agreement at any time until the maturity date without premium or penalty. The outstanding debt related to the vendor financing agreements is guaranteed by the Company’s subsidiaries and secured by substantially all of the assets of the Company and its subsidiaries. During the year ended December 31, 2025, we incurred $19.7 million of additional debt related to the satellite launch vendor financing agreements. As of December 31, 2025, we have $31.9 million of additional vendor financing available to us for future launches.
At-the-Market ("ATM") Transactions
During the year ended December 31, 2025, we issued and sold shares of our Class A common stock under our ATM sales agreement, dated December 15, 2022, with Jefferies LLC as our sales agent (the “2022 ATM Agreement”), resulting in gross proceeds of $42.5 million. We had the ability to offer and sell up to $75.0 million of newly issued shares of our Class A common stock in open trading windows at market prices through a designated broker dealer pursuant to an ATM offering program. We terminated the 2022 ATM Agreement in November 2025.
On December 12, 2025, we entered into an ATM sales agreement with Deutsche Bank Securities Inc. and Craig-Hallum Capital Group LLC as our sales agents (the “2025 ATM Agreement”), under which we may offer and sell from time to time up to $100.0 million of shares of our Class A common stock in negotiated transactions or transactions that are deemed to be an ATM offering. During the year ended December 31, 2025, we did not sell any shares of our Class A common stock under the 2025 ATM Agreement.
Current Contract Assets
We had $28.6 million and $27.9 million of current contract assets as of December 31, 2025 and 2024, respectively. We expect to continue billing for and receiving payments on our contract assets over the next 12 months as interim milestones on a few major customer contracts are met. The timing of customer billing and payment varies from contract to contract and we may continue to generate additional contract assets in 2026 and beyond as we enter into new contracts.
From time to time, we may seek additional equity or debt financing to fund capital expenditures, strategic initiatives or investments and our ongoing operations. If we decide, or are required, to seek additional financing from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise
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additional capital when desired, our business, financial condition and results of operations could be adversely affected.
Funding Requirements
We cannot be sure our revenues will exceed expenses in the near term due to the ongoing investments we are making in sales, marketing and products to increase our market share. We expect to continue to incur capital expenditures as we procure, build, and launch Gen-3 satellites, as well as invest in our BlackSky Spectra software platform to significantly expand our product capabilities in the future.
Short-Term Liquidity Requirements
As of December 31, 2025, our current assets were $206.8 million, consisting primarily of short-term investments, cash and cash equivalents, accounts receivable, and contract assets.
As of December 31, 2025, our current liabilities were $59.5 million, consisting primarily of contract liabilities, other current liabilities, which includes a $7.6 million contingent liability expected to be offset by an insurance recovery of $7.4 million, and accounts payable and accrued liabilities. Accordingly, we have sufficient cash and working capital to fund our short-term liquidity requirements.
Long-Term Liquidity Requirements
We anticipate that our most significant long-term liquidity and capital needs will relate to continued funding of operations, including procurement of materials for our missions solutions programs, satellite development capital expenditures, launch capital expenditures, and ongoing investments to optimize our BlackSky Spectra software platform and corporate business and operational systems that will enable us to continue to scale the business efficiently and securely. These ongoing investments in our operational systems include a multi-year minimum commitment for compute/storage costs to facilitate our expanding AI/ML functionality.
Upcoming satellite development capital expenditures include plans to expand our current high frequency monitoring constellation with multispectral, large-area collection satellites. We expect that these new satellites will be designed to support country scale digital mapping, navigation, maritime, and 3D digital twin applications. We can manage the timing for a large part of our capital expenditures, including the design, build, and launch of our new satellites currently under development, to provide us with additional flexibility to optimize our long-term liquidity requirements. Macroeconomic conditions and credit markets could also impact the availability and/or the cost of potential future debt or equity financing.
Cash Flow Analysis
The following table provides a summary of cash flow data for the years ended December 31, 2025 and 2024. Our short-term liquidity at December 31, 2025 was $125.6 million. Short-term investments of $82.0 million are not classified as cash, cash equivalents, or restricted cash.
Years Ended December 31, $
(in thousands)
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Operating Activities
For the year ended December 31, 2025, net cash used in operating activities was $28.3 million, which is an increase compared to the same period in 2024. The increase reflected in the year ended December 31, 2025 includes $29.1 million of paid in kind interest associated with our related party debt that we repaid utilizing the proceeds from our Convertible Senior Notes issued in July 2025. See "Financing activities" below for further detail on the remainder of the cash inflows and outflows related to our debt transactions during the year ended December 31, 2025.
Additionally, the increase in net cash used in operating activities reflected a larger accounts receivable balance in our consolidated balance sheet as of December 31, 2025. We subsequently reduced our accounts receivable balance when we collected on a significant invoice in January 2026. The increase in net cash used in operating activities also includes an increase in our operating loss, adjusted for depreciation, amortization, stock-based compensation expense, loss on derivatives, and other non-cash items inclusive of our BlackSky Satellite Systems operations. Prior to the acquisition of the remaining 50% of the common units of BlackSky Satellite Systems in November 2024, our consolidated statements of cash flows included the income on equity method investment as a non-cash adjustment to reconcile net loss to net cash used in operating activities. Subsequent to the acquisition, we fully consolidated BlackSky Satellite Systems's financial results in our consolidated financial statements and BlackSky Satellite Systems's cash inflows and outflows are primarily included within our operating activities.
The increases in net cash used in operating activities were partially offset by a cash receipt for prepaid capacity for future purchase orders that is recorded as a contract liability as of December 31, 2025 in our consolidated balance sheets.
Investing Activities
The change in net cash used in investing activities was primarily due to increased purchases of short-term investments in government securities of $127.8 million during the year ended December 31, 2025 compared to $52.9 million of purchases during the year ended December 31, 2024.
We continue to have significant cash outflows for satellite procurement and launch-related services. We also incur labor costs for internally developed capitalized software as we add innovative new services and tools to our BlackSky Spectra software platform and our corporate business and operational systems. For most of 2024, we paid BlackSky Satellite Systems, f/k/a LeoStella, as a third-party and classified such payments as cash outflows for investing activities. Following the acquisition of BlackSky Satellite Systems, we have classified their internal operations costs in our consolidated results. As a result, the total amount paid for capital expenditures decreased during the year ended December 31, 2025 as compared to the year ended December 31, 2024. We expect cash outflows for satellite production to increase as we continue to build out our satellite constellation.
Financing Activities
The most significant impact on the change in net cash provided by financing activities during the year ended December 31, 2025 as compared to the year ended December 31, 2024 was the receipt of $185.0 million in proceeds from the issuance of our Convertible Senior Notes in July 2025, which was partially offset by debt repayments of $110.3 million and $7.3 million of debt issuance costs. The debt repayments included $81.2 million of principal and accrued interest as well as paid in kind interest of $29.1 million, which is included in net cash used in operating activities.
Additionally, we received $40.8 million in net proceeds from our equity issuances during the year ended December 31, 2025 as compared to $47.0 million in net proceeds during the year ended December 31, 2024. Our equity issuances during the year ended December 31, 2025 consisted of the sale of 3.7 million shares of our Class A common stock under the 2022 ATM Agreement, which resulted in $42.5 million in gross proceeds. In comparison, for the year ended December 31, 2024, we sold 0.5 million shares of our Class A common stock under our 2022 ATM Agreement, which resulted in $4.8 million in gross proceeds. Our equity issuances during the year ended December 31, 2024 also included a public offering of 11.5 million shares of Class A common stock resulting in
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$46.0 million in gross proceeds. Finally, in 2025, we received $10.8 million of proceeds from warrant exercises of 611 thousand of the March 2023 Private Placement Warrants during the year ended December 31, 2025.
Contractual Obligations and Commitments
During the year ended December 31, 2025, we entered into a commitment for non-refundable multi-launch and integration services. We also entered into a commercial borrowing agreement with financing terms for multiple launches providing for $3.4 million to be paid upfront, and for $30.6 million, of which a portion will be drawn down equally per launch and will be repaid quarterly on a pro-rata basis across a three-year period after each successful launch milestone. Payments will accrue interest at 9.5% per annum. We may prepay at any time until the maturity date without premium or penalty. As of December 31, 2025, the minimum commitment associated with the multi-launch and integration services agreements was $8.0 million. Under certain circumstances, a default interest rate will apply on all outstanding and payable obligations during the existence of an event of default under the Loan Agreement at 18.9% per annum above the applicable interest rate.
In addition to the above, we entered into various operational commitments for the next several years totaling $30.1 million as of December 31, 2025.
Critical Accounting Estimates
The preparation of our consolidated financial statements and related notes requires management to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Management has based its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
For a description of our significant accounting policies, see Note 2—“Basis of Presentation and Summary of Significant Accounting Policies” of the notes to the consolidated financial statements. An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements. Management believes the following critical accounting policies reflect the more significant estimates and assumptions used in the preparation of our consolidated financial statements.
Revenue Recognition
The recognition and measurement of revenue requires the use of judgments and estimates. Specifically, judgment is used in interpreting complex arrangements with nonstandard terms and conditions and determining when all criteria for revenue recognition have been met, as further discussed below.
We generate revenue from the sale of space-based intelligence & AI services, mission solutions, and advanced technology programs.
Identifying the Contract with the Customer
We evidence approval of the contract with the customer with dual signatures or approved purchase orders that detail the rights of each party and define payment terms. We have never had significant collection issues on contracts with new or recurring domestic and international government customers and we consider this historical trend when assessing the collectability risk for contracts with bespoke effective terms. We also consider the probability of the customer funding the total contract value as a component of the collectability risk.
Identifying the Performance Obligations in a Contract
We execute contracts for a single promise or multiple promises. Specifically, our firm-fixed price contracts may include multiple promises which may be accounted for as separate performance obligations if they are capable of
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being distinct within the context of the contract. Significant judgment is required in determining performance obligations and these decisions could change the amount of revenue and profit or loss recorded in each period.
Classification of Revenue
We classify revenue as space-based intelligence & AI services, mission solutions, and advanced technology programs in our consolidated statements of operations and comprehensive loss based on the predominant attributes of the performance obligations.
Determination of and Allocation of Transaction Price
Each customer contract sets forth the transaction price for the products and services purchased under the arrangement. We estimate any variable consideration, and whether the transaction price is constrained, upon execution of each contract. Variable consideration is estimated as the most likely amount that is dependent upon the occurrence or non-occurrence of a future event. We continually review, and may reassess, the transaction price based on forecasted service level provisions within a limited number of our customer purchase orders, costs incurred to date and historical experience. As a result, we may update our estimated constraints on revenue, which are generally on a prospective basis. For contracts with multiple performance obligations, we evaluate whether the stated selling prices for the products or services represent their standalone selling prices. When it is necessary to allocate the transaction price to multiple performance obligations, management uses the volume adjusted list price for imagery and analytics subscriptions and the expected cost plus a reasonable profit margin to estimate the standalone selling price of each product or service, which is mostly professional services.
Determination of when Performance Obligations are Satisfied
Space-based intelligence & AI services revenue is recognized over the subscription period based on the promise to continuously provide contractual satellite capacity for tasked imagery or software analytical services at the discretion of the customer. Mission solutions revenue is primarily recognized from firm-fixed price long-term customized satellites and ground station contracts. Advanced technology programs revenue is primarily generated from cost-plus contracts, and time and materials basis contracts and firm-fixed price service solutions contracts.
Due to the long-term nature of some of our contracts, we recognize revenue over time using a cost-to-complete measure of progress because it best depicts the transfer of control to the customer as we incur costs on the contracts. Under this measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs to complete the performance obligation(s). Calculating total estimated costs at completion is subject to many variables and requires significant judgment. We recognize changes in the estimation of total costs at completion on a cumulative catch-up basis in the period in which the changes are identified. Such changes in estimates can result in the recognition of revenue in a current period for performance obligations that were satisfied or partially satisfied in a prior period. If, at any time, the estimate of contract profitability indicates a probable anticipated loss on the contract, we recognize the total loss as and when known.
Equity Valuations
Equity valuations impact various amounts and accounting conclusions reflected in our consolidated financial statements, including the recognition of equity-based compensation and warrant valuations. The following discussion provides additional details regarding the significant estimates, assumptions, and judgments that impacted the determination of the fair values of equity-based compensation awards, warrants, and the common stock that comprise our capital structure. The following discussion also explains why these estimates, assumptions, and judgments could be subject to uncertainties and future variability.
Equity-Based Compensation
We have equity and equity-based awards outstanding under our 2021 Equity Incentive Plan ("2021 Plan") and our 2014 Equity Incentive Plan ("2014 Plan"). Outstanding awards issued include stock options and RSUs. In addition, our eligible employees can participate in our 2021 Employee Stock Purchase Plan ("ESPP") pursuant to purchase right offerings that are established under the ESPP.
For purposes of recognizing equity-based compensation related to RSUs and stock options granted to employees and other service providers, management estimates the grant date fair values of such awards to measure
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the costs to be recognized as services are received. For awards with time-based vesting conditions, we recognize compensation costs based upon the straight-line amortization of the grant date fair value of the awards over the requisite service period. When equity-based compensation awards include a performance condition, no compensation is recognized until the performance condition is deemed probable to occur; we then recognize compensation costs based on the accelerated attribution method, which accounts for awards with discrete vesting dates as if they were separate awards.
Stock Option and Class A Common Stock Warrant Valuations
We use the Black-Scholes option-pricing model to value all options, including options under our ESPP, and Class A common stock warrants. Estimating the fair value of stock options using the Black-Scholes option-pricing model requires the application of significant assumptions, such as the estimated term of the options, risk-free interest rates, the expected volatility of the price of our Class A common stock, and an expected dividend yield. Each of these assumptions is subjective, requires significant judgment, and is based upon management’s best estimates. If any of these assumptions were to change significantly in the future, equity-based compensation related to future awards may differ significantly, as compared with awards previously granted.
We grant RSUs to the bulk of our employees. For these RSUs, the grant date fair value is equal to the trading price fair value of our Class A common stock on the date of grant. For stock options, which are primarily granted to certain management employees, we use the following inputs under Black-Scholes as follows:
Expected Dividend Yield: The Black-Scholes valuation model requires an expected dividend yield as an input. The dividend yield is based on historical experience and expected future changes. We historically have not paid, and currently have no plans to pay dividends on our Class A common stock. Accordingly, we have assumed no dividend yield upon valuation of our stock options.
Expected Volatility: As there was no observable volatility with respect to Legacy BlackSky Class A common stock and due to the lack of sufficient history of BlackSky Class A common stock, we estimated the expected volatility of Legacy BlackSky and BlackSky Class A common stock based upon the historical share price volatility of guideline comparable companies.
Risk-free Interest Rate: We used the yield on actively traded, non-inflation indexed U.S. Treasury notes to extrapolate an average risk-free interest rate based on the expected term of the underlying grants.
Expected Term: For options granted since 2021, as there is not a significant history of option exercises as a public company, we consider the option vesting terms and contractual period, as well as the demographics of the holders, in estimating the expected term. We will continue to review our estimate and adjust it, if necessary, due to changes in our historical exercises.
Private Placement Warrants and Sponsor Shares
We have classified the Private Placement Warrants issued in October 2019 and March 2023 and the Osprey pre-merger Class B common shares that were exchanged for shares of our Class A common stock (the "Sponsor Shares") as long-term liabilities in our consolidated balance sheets as of December 31, 2025 and 2024. Although some of the warrants have expiration dates within one year of December 31, 2025, current liabilities are used principally to designate obligations whose liquidation is reasonably expected to require the use of existing resources properly classifiable as current assets, or the creation of other current liabilities. The Private Placement Warrants issued in October 2019 and the Sponsor Shares were initially recorded at fair value on the date of the Merger, whereas the Private Placement Warrants issued in March 2023 were recorded at fair value on the date of issuance. The Private Placement Warrants were recorded at fair value using a Black-Scholes option pricing model and the Sponsor Shares were recorded at fair value using a Monte Carlo simulation model. These liabilities are re-measured to fair value at each subsequent reporting date and immediately prior to each warrant exercise date. The remeasurements are recorded to loss on derivatives in our consolidated statements of operations and comprehensive loss. We will continue to adjust the liability for changes in fair value until the financial instruments are exercised, redeemed, cancelled or released.
The fair value models require inputs including, but not limited to, the fair value of our Class A common stock, the risk-free interest rate, expected term, expected dividend yield and expected volatility. The fair value of our Class
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A common stock is the closing stock price on the NYSE as of the measurement date. The risk-free interest rate assumption is determined by using U.S. Treasury rates for the same period as the expected terms of the financial instruments. The dividend yield assumption is based on the dividends expected to be paid over the expected life of the financial instruments. Expected stock volatility is based on our public warrant historical volatility. Changes in these assumptions can materially affect the estimate of the fair value of these instruments and ultimately the change in fair value.
Goodwill Impairment
We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. Goodwill is tested annually for impairment as of October 1st, or more frequently if events or circumstances indicate the carrying value may be impaired. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Indicators of impairment may include (a) a significant decline in our common stock value, (b) a significant decline in our expected future cash flows, (c) a significant adverse change in legal factors or the business climate, (d) unanticipated competition, or (e) slower growth rates. We measure potential impairment by comparing the fair value of each of our reporting units with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.
We performed an annual qualitative goodwill assessment related to the BlackSky reporting unit as of October 1, 2025. We determined that no triggering events occurred during the year ended December 31, 2025 that would require a quantitative assessment. During our qualitative assessment, we determined that it is more likely than not that the fair value of the BlackSky reporting unit sufficiently exceeds its carrying value, including goodwill. As of December 31, 2025, we believe that the estimated fair value of the BlackSky reporting unit is still in excess of its respective carrying value and we did not identify any triggering events that indicate a risk of impairment.
Long-Lived Asset Impairment
We evaluate long-lived assets, including intangible assets, property and equipment, satellite work in process and other long-term assets, for impairment whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be fully recoverable. Significant judgments in this area involve determining whether a triggering event has occurred and determining the future cash flows for the relevant assets. A triggering event for assessing impairment can be a change in the estimated useful life of an intangible asset. Once a triggering event is identified and we conduct an analysis for impairment, we compare the undiscounted cash flows expected to be generated from the long-lived assets (or asset group) to the related net book values. If the undiscounted cash flows exceed the net book value, the long-lived assets are considered not to be impaired. If the net book value exceeds the undiscounted cash flows, an impairment charge is measured and recognized based upon the difference between the carrying value of long-lived assets (or asset group) and their fair value.
Business Combination
Upon acquisition of a company, we determine if the transaction is a business combination, which is accounted for using the acquisition method of accounting. Under the acquisition method, once control is obtained of a business, the assets acquired, and liabilities assumed, are recorded at fair value.
The most significant estimates and assumptions evaluated in a business combination relate to the determination of (1) the enterprise value of the acquired company using an income approach, (2) the fair values of identified intangible assets, (3) the allocation of the fair value acquired to the net assets acquired and (4) the period and pattern of amortization for intangible assets that are assigned a definite life. The enterprise value is determined based on projected cash flows attributable to the operations of the acquiree. The projected cash flows include various assumptions, including estimated revenue growth rates, operating margins, research and development expenditures, capital expenditures, royalty rates, and appropriate risk-adjusted discount rates used to discount the projected cash flows. The use of different assumptions would result in the assignment of different fair values to the acquired identifiable intangible assets and, accordingly, could also impact the amount of purchase consideration assigned to
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goodwill. Similarly, changes in the planned usage of the acquired identifiable intangible assets and/or their estimated economic lives, if any, could impact the recoverability of the assets and/or amortization period and expense attributable to the assets in the future.
Measurement period adjustments are reflected at the time identified, through the conclusion of the measurement period, which is the time at which all information for determination of the values of assets acquired and liabilities assumed is received. The measurement period is not to exceed one year from the acquisition date. We may continue to record adjustments to the fair value of any tangible and intangible assets acquired and liabilities assumed within the relevant measurement period with the corresponding offset to goodwill.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is set forth beginning on page 88 of this Annual Report on Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Annual Report on Form 10-K, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of reasonably ensuring that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (collectively, the “Certifying Officers”), as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our Certifying Officers, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025, pursuant to Rule 13a-15(b) of the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of December 31, 2025, our disclosure controls and procedures were effective at a reasonable assurance level.
In designing and evaluating the disclosure controls and procedures, management recognized that controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company will be detected.
Management’s Report on Internal Control Over Financial Reporting
Our management, including our Certifying Officers, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control over financial reporting is a process designed under the supervision of the Company’s Certifying Officers, and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external purposes in accordance with GAAP.
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Because of its inherent limitations, internal control over financial reporting may not detect or prevent misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the criteria for effective internal control over financial reporting established in Internal Control— Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Management believes that we maintained effective internal control over financial reporting as of December 31, 2025 based on those criteria.
The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is included in Item 9A of this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Report of Independent Registered Public Accounting Firm
To the shareholders and the Board of Directors of BlackSky Technology Inc.
Herndon, Virginia
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of BlackSky Technology Inc. and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated March 17, 2026 expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
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Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
McLean, VA
March 17, 2026
ITEM 9B. OTHER INFORMATION
During the three months ended December 31, 2025, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (each as defined in Item 408 of Regulation S-K).
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
We will provide information that is responsive to this Item 10 in our definitive proxy statement for our 2026 Annual Meeting of Stockholders or in an amendment to this Annual Report on Form 10-K not later than 120 days after December 31, 2025. Such information is incorporated into this Item 10 by reference.
ITEM 11. EXECUTIVE COMPENSATION
We will provide information that is responsive to this Item 11 in our definitive proxy statement for our 2026 Annual Meeting of Stockholders or in an amendment to this Annual Report on Form 10-K not later than 120 days after December 31, 2025. Such information is incorporated into this Item 11 by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
We will provide information that is responsive to this Item 12 in our definitive proxy statement for our 2026 Annual Meeting of Stockholders or in an amendment to this Annual Report on Form 10-K not later than 120 days after December 31, 2025. Such information is incorporated into this Item 12 by reference.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
We will provide information that is responsive to this Item 13 in our definitive proxy statement for our 2026 Annual Meeting of Stockholders or in an amendment to this Annual Report on Form 10-K not later than 120 days after December 31, 2025. Such information is incorporated into this Item 13 by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information about aggregate fees billed to us by our principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34), will be presented in our definitive proxy statement for our 2026 Annual Meeting of Stockholders or in an amendment to this Annual Report on Form 10-K not later than 120 days after December 31, 2025. Such information is incorporated into this Item 14 by reference.
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PART IV
ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
1. and 2. Financial Statements and Financial Statement Schedules
The consolidated financial statements and financial statement schedules of BlackSky required by Part II, Item 8, are included in Part IV of this report. See Index to Consolidated Financial Statements and Financial Statement Schedules beginning on Page 88.
3. Exhibits
The documents listed below are incorporated by reference or are filed with this report, in each case as indicated therein.
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21.1 List of Subsidiaries X
24.1 Power of Attorney (included in signature pages hereto) X
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101.INS Inline XBRL Instance Document X
101.SCH Inline XBRL Taxonomy Extension Schema Document X
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X
________________+ Indicates management contract or compensatory plan.
ITEM 16. FORM 10-K SUMMARY
None.
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ITEM 16A. SIGNATURES
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
March 17, 2026 BlackSky Technology Inc.
By: /s/ Brian E. O’Toole
Brian E. O'Toole
Chief Executive Officer and Director
(Principal Executive Officer)
By: /s/ Henry Dubois
Henry Dubois
Chief Financial Officer
(Principal Financial Officer)
By: /s/ Tracy Ward
Tracy Ward
Senior Vice President and Controller
(Principal Accounting Officer)
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POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Brian O’Toole, Henry Dubois, and Tracy Ward, and each one of them, as his or her true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for such individual in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or the individual’s substitute, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed by the following persons in the capacities and on the dates indicated on behalf of the registrant.
Signature Title Date
Brian O’Toole
Henry Dubois
Tracy Ward
/s/ Magid Abraham Director March 17, 2026
Magid Abraham
/s/ David DiDomenico Director March 17, 2026
David DiDomenico
/s/ Susan Gordon Director March 17, 2026
Susan Gordon
/s/ Timothy Harvey Director March 17, 2026
Timothy Harvey
/s/ William Porteous Director March 17, 2026
William Porteous
/s/ James Tolonen Director March 17, 2026
James Tolonen
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Index to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm 89
Consolidated Balance Sheets 91
Consolidated Statements of Operations and Comprehensive Loss 92
Consolidated Statements of Changes in Stockholders' Equity 93
Consolidated Statements of Cash Flows 94
Notes to Consolidated Financial Statements 96
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of BlackSky Technology Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of BlackSky Technology Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, changes in stockholders' equity, and cash flows, for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 17, 2026 expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue recognition — Refer to Notes 2 and 5 to the Financial Statements
Critical Audit Matter Description
The Company recognizes revenue from the sale of space intelligence & artificial intelligence services, mission solutions, and advanced technology programs. Judgment is used in interpreting complex arrangements with nonstandard terms and conditions and determining when all criteria for revenue recognition have been met. Specifically for newly-awarded contracts the evaluation of the identification of performance obligations in the
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contracts, the determination of and allocation of the transaction price, and the pattern by which revenue is recognized required extensive audit effort due to the complexity of the contracts and a high degree of auditor judgment.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the revenue recognition criteria for the newly-awarded contracts identified included the following, among others:
•We tested the design and operating effectiveness of internal controls over the significant judgments made and the key data used in the determination of revenue recognition.
•We tested the accuracy and completeness of the key data used in the determination of revenue recognition.
•We read underlying contracts to obtain an understanding of the contractual requirements and evaluate the related performance obligations therein, and we compared the performance obligations identified in reading the underlying contracts to those identified by management.
•We evaluated the methodology used by management in computing the stand-alone selling price of each identified performance obligation by comparing to historical sales of similar products or services or evaluating the consistency of the margins used in the estimates to historical performance. We evaluated the reasonableness of criteria chosen by management to recognize revenue over time and evaluated the consistency of management's conclusions to historical experience and the terms of the individual selected contracts.
/s/ Deloitte & Touche LLP
McLean, VA
March 17, 2026
We have served as the Company's auditor since 2015.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BLACKSKY TECHNOLOGY INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
December 31, December 31,
Assets
Current assets:
Accounts receivable, net of allowance of $50 and $45, respectively 34,139 14,701
Prepaid expenses and other current assets 12,329 4,356
Operating lease right of use assets - net 3,418 4,029
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued liabilities $ 14,945 $ 20,419
Deferred revenue - long-term 9,948 —
Commitments and contingencies (Note 23)
Stockholders’ equity:
Total liabilities and stockholders’ equity $ 386,246 $ 254,146
See notes to consolidated financial statements
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BLACKSKY TECHNOLOGY INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except per share amounts)
Years Ended December 31,
Revenue
Space-based intelligence & AI services $ 65,116 $ 70,062
Costs and expenses
Mission solutions costs, excluding depreciation and amortization 10,941 4,952
Income on equity method investments — 879
Loss on debt extinguishment (4,140) —
Other income, net 60 3
Other comprehensive income — —
Basic and diluted loss per share of common stock:
Net loss per share of common stock $ (2.09) $ (2.67)
See notes to consolidated financial statements
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BLACKSKY TECHNOLOGY INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands)
Common Stock Additional Paid-In Accumulated Total Stockholders'
Shares Amount Capital Deficit Equity
Issuance of common stock upon vesting of restricted stock units 1,028 — — — —
Issuance of common stock, net of equity issuance costs 3,673 — 40,876 — 40,876
Common Stock Additional Paid-In Accumulated Total Stockholders'
Shares Amount Capital Deficit Equity
Issuance of common stock upon vesting of restricted stock awards 3 — — — —
Issuance of common stock upon vesting of restricted stock units 852 — — — —
See notes to consolidated financial statements
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BLACKSKY TECHNOLOGY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
Cash flows from operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense 30,343 43,536
Transfer of satellite work in process to mission solutions costs 8,542 334
Operating lease right of use assets amortization 611 583
Loss on debt extinguishment 4,140 —
Amortization of debt issuance costs and non-cash interest expense 3,812 9,207
Paid in kind interest at time of debt extinguishment (29,079) —
Income on equity method investment — (879)
Changes in operating assets and liabilities:
Contract assets - current and long-term (313) (4,989)
Prepaid expenses and other current assets (8,188) 556
Accounts payable and accrued liabilities (9,386) (4,080)
Contract liabilities - current and long-term 28,160 (978)
Other liabilities (196) 17
Net cash used in operating activities (28,311) (6,384)
Cash flows from investing activities:
Purchase of property and equipment (16,212) (15,678)
Proceeds from maturities of short-term investments 87,750 34,225
Cash received from business acquisition — 541
Net cash used in investing activities (86,595) (68,330)
Cash flows from financing activities:
Proceeds from equity issuances, net of equity issuance costs 40,829 47,009
Proceeds from warrants exercised 10,753 —
Proceeds from options exercised and ESPP shares purchased 2,009 308
Payments for debt issuance costs (7,304) (632)
Withholding tax payments on vesting of restricted stock units (2,709) (967)
Payments for deferred offering costs — (60)
Net cash provided by financing activities 144,076 55,658
Cash, cash equivalents, and restricted cash – beginning of year 14,378 33,434
Cash, cash equivalents, and restricted cash – end of year $ 43,548 $ 14,378
See notes to consolidated financial statements
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The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows:
December 31,
Total cash, cash equivalents, and restricted cash $ 43,548 $ 14,378
Years Ended December 31,
(in thousands)
Supplemental disclosures of cash flow information:
Cash paid for income taxes 197 476
Supplemental disclosures of non-cash financing and investing information:
Vendor financed satellite launch costs $ 19,700 $ 6,000
Transfer of satellite work in process to mission solutions costs 8,542 334
Accretion of short-term investments' discounts and premiums 2,565 1,074
Capitalized depreciation expense 1,182 177
Capitalized interest 631 —
Capitalized stock-based compensation 659 555
Deferred offering costs accrued but not yet paid 357 54
Increase of debt principal for paid-in-kind interest — 8,456
Transfer of satellite work in progress to inventories — 5,997
Equity issuance costs accrued but not yet paid — 46
See notes to consolidated financial statements
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BLACKSKY TECHNOLOGY INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
1. Organization and Business
BlackSky Technology Inc. (“BlackSky” or the “Company”), headquartered in Herndon, Virginia, is a space technology company that delivers real-time imagery, analytics and high-frequency monitoring along with solutions that allow customers the ability to acquire, own, and operate their own customized satellite(s) and space-to-ground system(s). The Company owns and operates an advanced purpose-built commercial, real-time intelligence system that combines the power of the BlackSky Spectra tasking and analytics software platform and the Company's proprietary high-resolution low earth orbit (“LEO”) small satellite constellation. The constellation is optimized to cost-efficiently capture imagery at high revisit rates where and when customers need it. The BlackSky Spectra software platform processes millions of observations a day by integrating data from the Company's proprietary satellite constellation and from other third-party sensors such as synthetic aperture radar and radio frequency satellites, millions of GPS-enabled terrestrial data sources and Internet of Things (“IoT”) connected devices. BlackSky Spectra applies advanced, proprietary artificial intelligence (“AI”) and machine learning (“ML”) techniques to process, analyze, and transform these raw feeds into actionable intelligence via alerts, information, and insights. Customers can access BlackSky Spectra's software platform and its data and analytics through easy-to-use web services or through platform application programming interfaces. BlackSky delivers a comprehensive suite of space-based intelligence products and services through three integrated revenue streams—space-based intelligence & AI services, mission solutions, and advanced technology programs.
BlackSky has three primary operating subsidiaries, BlackSky Global LLC, BlackSky Geospatial Solutions, LLC, and BlackSky Satellite Systems LLC, f/k/a LeoStella LLC, ("BlackSky Satellite Systems" or “LeoStella”). In November 2024, the Company acquired the remaining 50% of the common units of LeoStella, which was previously a joint venture with Thales Alenia Space US Investment LLC (“Thales”) and accounted for as an equity method investment. BlackSky Satellite Systems is now a wholly-owned subsidiary of the Company. BlackSky Satellite Systems is a vertically-integrated small satellite design and manufacturer based in Tukwila, Washington. This acquisition allowed the Company to improve its control over the Gen-3 supply chain and production operations in the short term and to expand the Company’s product offerings in the long term. See Note 7—"Business Acquisition" for further detail.
In July 2025, the Company issued $185.0 million aggregate principal amount of Convertible Senior Notes due August 1, 2033 (the “Convertible Senior Notes”) in a private offering. See Note 15—"Debt and Other Financing" for further detail.
During the year ended December 31, 2025, the Company issued and sold shares of Class A common stock as part of the Company's at-the-market (“ATM”) offering program. The Company sold 3.7 million shares from the ATM offering program at an average purchase price per share of $11.56, resulting in gross proceeds of $42.5 million during the year ended December 31, 2025. During the year ended December 31, 2025, the Company incurred ATM transaction costs totaling $1.6 million, which primarily consisted of commissions, and which have been recorded as a reduction to additional paid-in capital in the consolidated statements of changes in stockholders’ equity and consolidated balance sheets.
2. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Preparation
The Company has prepared its consolidated financial statements in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”) and the instructions to Form 10-K and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. As noted in Note 1 - "Organization and Business" and Note 7 - "Business Acquisition", on November 6, 2024, the Company
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acquired the remaining 50% of the common units of BlackSky Satellite Systems, f/k/a LeoStella, which is now a wholly-owned subsidiary of BlackSky. Prior to the acquisition, the Company's consolidated financial statements included the Company’s proportionate share of the earnings or losses of its equity method investments and a corresponding increase or decrease to its investments, with recorded losses limited to the carrying value of the Company’s investments. All intercompany transactions and balances have been eliminated upon consolidation.
The Company’s consolidated financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities, including derivative financial instruments, that are stated at fair value. Unless otherwise indicated, amounts presented in the Notes pertain to the Company’s continuing operations.
Effective January 1, 2025, the Company reclassified its captions on the consolidated statements of operations and comprehensive loss to better align with the Company’s increasing portfolio of mission solutions product offerings and advanced technology program service offerings. Revenue and costs that were previously classified as imagery & software analytical services are now classified as space-based intelligence & AI services. Professional & engineering services are now either classified as mission solutions if they are related to the Company's product offerings or advanced technology programs if they are related to the Company's service offerings. As a result, for the year ended December 31, 2024, the amounts presented have been reclassified to conform to the current year presentation.
Use of Estimates
The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingencies at the reporting date, and the reported amounts of revenue and expenses during the reporting period. These estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future. Actual results could materially differ from these estimates. Significant estimates made by the Company include, but are not limited to, revenue and associated cost recognition, the collectability of accounts receivable, the recoverability and useful lives of intangible assets and property and equipment, the valuation of equity warrants and warrant liabilities, fair value estimates, the recoverability of goodwill and intangible assets, the provision for income taxes, the incremental borrowing rate to measure the operating lease right of use assets, the effective interest rate of the vendor financing agreement, the fair value of assets acquired and liabilities assumed of a business combination, the capitalization of interest, stock-based compensation, and the obsolescence of satellite work in process and inventory.
Cash and Cash Equivalents
Cash and cash equivalents are comprised of cash in banks and highly liquid investments with original maturities of three months or less.
Restricted Cash
The Company classifies cash as restricted when the cash is unavailable for withdrawal or usage for general operations. Restricted cash represents certificates of deposits held by a bank as a compensating balance for letters of credit that are required by certain contracts with customers and cash collateral for leasing arrangements.
Investments
The Company invests in short-term investments, which generally consist of A-1, or higher, rated corporate debt and governmental securities. The investments are classified as held-to-maturity and have a stated maturity date of one year or less from the balance sheet date. Any investments with original maturities less than three months are considered cash equivalents.
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As of December 31, 2025 and 2024, the Company’s short-term investments had a carrying value, representing amortized cost, of $82.0 million and $39.4 million, respectively, and an aggregate fair value, representing a Level 1 measurement based off of the fair value hierarchy, of $82.1 million and $39.4 million, respectively.
Accounts Receivable - net
Accounts receivable represent customer obligations due to the Company for the purchase of our products and services under normal trade terms, without collateral. Most of the Company's sales are with domestic and international government and agencies, which limits uncollectible accounts receivable. The Company reviews accounts receivable on a periodic basis to determine collectability. The Company reserves for any accounts receivable balances that are determined to be uncollectible as an allowance for doubtful accounts. After all attempts to collect an accounts receivable have failed, the accounts receivable balance is written off against the allowance for doubtful accounts. The Company assessed all existing accounts receivable and recorded an allowance for doubtful accounts of $50 thousand and $45 thousand as of December 31, 2025 and 2024, respectively.
Inventories
Inventories are production costs associated with anticipated future revenue contracts. As of December 31, 2025 and 2024, the Company had $6.2 million and $6.0 million, respectively, of work in process inventory. Inventories are stated on a consistent basis at the lower of historical cost or net realizable value. Net realizable value is determined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company estimates future sales and will write down excess inventories as needed. The Company had a reserve of $0 for inventory as of December 31, 2025 and 2024. The Company’s estimates of future sales are based on confirmed and expected customer contracts. The carrying values of inventories approximated their fair values as of December 31, 2025 and 2024.
Prepaid Expenses and Other Current Assets
Prepaid expenses are advance payments made in the ordinary course of business and are amortized on a straight-line basis over the period of benefit. As of December 31, 2025, the Company recognized expected insurance recoveries as a current asset. These expected insurance recoveries relate to a contingent liability for an ongoing claim that is expected to be resolved within insurance limits. See Note 23—“Commitments and Contingencies” for additional information on the contingent liability. The carrying values of prepaid expenses and other current assets approximated their fair values as of December 31, 2025 and 2024
Property and Equipment - net
Property and equipment are stated at cost, less accumulated depreciation. In the consolidated statements of operations and comprehensive loss, the Company recognizes depreciation expense on a straight-line basis over the estimated useful life of the asset to its residual value.
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The estimated useful lives are as follows:
Estimated useful lives (years)
Satellites 3 - 5
Capitalized software 3
Office furniture and fixtures 5
Production and engineering equipment 3 - 6
Computer equipment and software 3
Site and other equipment 3 - 4
Leasehold improvements shorter of useful life or remaining lease term
Capitalized satellite costs include material costs, labor costs incurred from the start of the pre-acquisition stage through the construction stage, insurance, interest, and the costs incurred to launch the satellite into orbit for its intended use. Labor costs incurred prior to and after the pre-acquisition and construction stages are charged to expense. Once the satellite has reached orbit and makes contact with the Company's network, the Company commences depreciation. The designated useful life of the Company's satellites is recognized using the straight-line method. Subsequent to launch, the Company's satellites must meet certain performance and operational criteria to be deemed commercially viable. If the criteria are not met, the Company assesses the satellite for impairment.
The Company capitalizes internal and external costs that are incurred to develop and implement internal-use software, which consist primarily of costs related to design, coding, and testing. Internal costs include salaries and allocations of fringe and stock-based compensation for employees developing our internal-use software. When such software is ready for its intended use, capitalization ceases and costs are amortized on a straight-line basis over the estimated life to either depreciation or cost of sales depending on the nature of the software. Costs incurred prior to and after the application development stage are charged to expense. The Company regularly reviews its capitalized software projects for impairment.
Leases
The Company leases office space under various non-cancellable operating leases with varying lease expiration dates through 2036. Several leases contain renewal options and termination options that were not reasonably certain to be exercised upon inception of the lease and are not included in the lease expiration dates. The Company determines whether a contract is or contains a lease and, if applicable, whether the lease should be classified as an operating or finance lease at contract inception.
Operating leases are included in the following lines in the consolidated balance sheets: operating lease right-of-use (“ROU”) assets, current portion of operating lease liabilities, and long-term operating lease liabilities.
ROU assets represent the Company’s right to use the underlying assets for the lease term, whereas lease liabilities represent the Company’s obligation to make lease payments arising from its leases. ROU assets and lease liabilities are recognized at the commencement date of a lease based on the present value of lease payments over the lease term. The Company uses the implicit rate when readily determinable. For leases where the rate is not determinable, the Company determines the incremental borrowing rate. The Company does not recognize a ROU asset and a lease liability for leases with an initial term of 12 months or less; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.
Many of the Company’s lease agreements contain incentives for tenant improvements. For tenant improvement incentives received, if the incentive is determined to be a leasehold improvement owned by the lessee, the Company generally records the incentives as a reduction to the ROU asset, which reduces rent expense over the lease term. For these lease incentives, the Company uses the date of initial possession as the
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commencement date, which is generally when the Company is given the right of access to the space and begins to make improvements in preparation for intended use. The Company’s lease arrangements may also contain multiple lease components, such as fixed rent payments and non-lease components, such as common-area maintenance (“CAM”) costs. The Company elected not to separate the lease and non-lease components for new and modified leases executed after the adoption date. The Company's variable lease expense primarily consists of CAM expenses paid directly to lessors of real estate leases. Finance leases are not material to the Company's consolidated financial statements and the Company is not a lessor in any material arrangements. The Company does not have any material restrictions or covenants in its lease agreements, sale-leaseback transactions, land easements or residual value guarantees.
Goodwill, Intangible Assets - net, and Other Long-Lived Assets
Goodwill
Goodwill represents the excess of purchase price in a business acquisition over the fair value of the identifiable assets acquired less the liabilities assumed in a business acquisition.
Goodwill is tested annually for impairment, as of October 1, or more frequently if events or circumstances indicate that the carrying value of goodwill may be impaired. Goodwill is tested for impairment at the reporting unit level by first taking a qualitative approach to determine whether it is more likely than not that a reporting unit's fair value is less than its carrying value. If the Company determines that it is more likely than not that a reporting unit's fair value is less than its carrying amount, the Company then compares the reporting unit’s carrying amount to the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. In testing for goodwill impairment, the Company may utilize a mix of income and market approaches that include the use of comparable multiples of publicly traded companies whose services are comparable to ours. The Company concluded it has one reporting unit as of December 31, 2025 with goodwill of $10.3 million.
The Company continuously evaluates whether indicators of impairment exist to determine whether it is necessary to perform a quantitative goodwill impairment test. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include a significant decline in the Company's common stock value, a significant decline in the Company's expected future cash flows, a significant adverse change in legal factors or in the business climate, unanticipated competition, the testing for recoverability of a significant asset group within a reporting unit, or slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of goodwill and could have a material impact on the consolidated financial statements.
Long-Lived Assets and Intangible Assets
The Company reviews long-lived assets, including intangible assets, property and equipment, satellite work in process and other long-term assets, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. Significant judgments in this area involve determining whether a triggering event has occurred and determining the future cash flows for assets involved. A triggering event for assessing impairment can be a change in the estimated useful life of an intangible asset. Once a triggering event is identified and we conduct an analysis for impairment, we compare the undiscounted cash flows expected to be generated from the long-lived assets (or asset group) to the related net book values. If the undiscounted cash flows exceed the net book value, the long-lived assets are not impaired. If the net book value exceeds the undiscounted cash flows, we measure and recognize an impairment charge based upon the difference between the carrying value of long-lived assets (or asset group) and their fair value.
Finite-lived intangible assets include various assets that are subject to amortization, including trade names, trademarks, and customer relationships. Such intangible assets are amortized on a straight-line basis over their estimated useful lives.The estimated useful lives of the Company's finite-lived intangible assets are as follows:
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Estimated useful lives (years)
Trade names and trademarks 2
Customer relationships 10
Indefinite life intangible assets are made up of in-process research and development, which has an indefinite life until development is complete. These assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable.
Satellite Work in Process
Satellite work in process primarily represents amounts paid to third party vendors for components to manufacture the Company's satellites, internal labor costs incurred to develop and integrate the Company's satellites, including salaries and allocations of fringe and stock-based compensation, launch and launch-related costs provided by third-party vendors and capitalized interest. The Company calculates capitalized interest using the weighted average of the stated interest rates of all the financing arrangements in place, based on the amount of cash paid for capital expenditures.
Satellite work in process capitalized, but not yet paid, is recognized as the Company has the rights to the in-process assets being engineered on the Company's behalf or a refund of amounts paid to date, less certain costs. At launch, these costs, and other costs incurred to put a satellite into service, are aggregated and reclassified as property and equipment, subject to depreciation (Note 9). Since the acquisition of BlackSky Satellite Systems, the Company capitalizes depreciation on assets that are used directly in the production of the satellites. Capitalized depreciation expense is recorded as satellite work in process and will begin depreciation once the satellite is placed into service. At times, the Company may assign certain incurred work in process costs to a customer customized satellite procurement contract and will transfer those costs from satellite work in process to mission solutions costs, excluding depreciation and amortization in the consolidated statements of operations and comprehensive loss; these amounts are also presented as transfer of satellite work in process to mission solutions costs in the consolidated statements of cash flows.
Equity Method Investments
As noted in Note 1 and Note 7, in November 2024, the Company acquired the remaining 50% of the common units of BlackSky Satellite Systems, f/k/a LeoStella, which is now a wholly-owned subsidiary of the Company. Prior to the acquisition, the Company had the ability to exercise significant influence, but not control, over LeoStella and accounted for it under the equity method of accounting, including it as an investment in equity method investees on the Company's consolidated balance sheets.
Significant influence typically exists if a Company has a 20% to 50% ownership voting interest in the investee or retains a voting seat on the investee's board of directors. In evaluating whether the Company had significant influence, the Company considered the nature of its ownership interest in the investee, as well as other factors that may have given the Company the ability to exercise significant influence over the investee's operating and capital financial policies. Under the equity method of accounting, the Company's share of the net earnings or losses of the investee were included in the Company's consolidated statements of operations and comprehensive loss. Other than the gain related to the step up acquisition, the Company did not record any percentage of BlackSky Satellite System's, f/k/a LeoStella's, estimated net loss during the year ended December 31, 2024 since the investment in LeoStella was $0 as of December 31, 2023.
Contingent Liabilities
The Company may become involved in litigation or other financial claims in the normal course of its business operations. The Company periodically analyzes currently available information relating to these claims, assesses the probability of loss, and provides a range of possible outcomes when it believes that sufficient and appropriate information is available. The Company accrues a liability for those contingencies
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where the occurrence of a loss is probable and the amount can be reasonably estimated. If a loss is probable and a range of amounts can be reasonably estimated but no amount within the range is a better estimate than any other amount in the range, then the minimum of the range is accrued. The Company does not accrue a liability when the likelihood that the liability has been incurred is believed to be probable but the amount cannot be reasonably estimated or when the likelihood that a liability has been incurred is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and the impact could potentially be material, the Company discloses the nature of the contingency and, where feasible, an estimate of the possible loss or range of loss.
Debt Issuance Costs and Debt Discount
Debt issuance costs are capitalized and amortized to interest expense using the effective interest method over the life of the related debt. Short-term and long-term debt are presented net of the unamortized debt issuance costs and debt discount in the consolidated balance sheets.
Fair Value of Financial Instruments
The Company accounts for certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The process for analyzing the fair value measurement of certain financial instruments on a recurring, or non-recurring, basis includes significant judgment and estimates of inputs including, but not limited to, share price, volatility, discount for lack of marketability, application of an appropriate discount rate, and probability of liquidating events. The Company utilizes the market valuation methodology and specific option pricing methodology, such as the Monte Carlo simulation, to value its more complex financial instruments, whereas the Company utilizes the Black-Scholes option-pricing model to value standard common stock warrants and common stock options.
The framework for measuring fair value specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).
The three levels of the fair value hierarchy are as follows:
Level 1 Inputs. Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
Level 2 Inputs. Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.
Level 3 Inputs. Inputs are unobservable inputs which reflect the Company’s own assumptions on what assumptions market participants would use in pricing the asset or liability based on the best available information.
Revenue Recognition
The Company generates revenue from the sale of space-based intelligence & AI services, mission solutions, and advanced technology programs. Revenue generated from space-based intelligence & AI services and advanced technology programs is classified as service revenue and revenue generated from mission solutions is classified as product revenue. Space-based intelligence & AI services revenue is largely generated from subscription contracts with domestic and international government agencies and includes imagery, data, software, and analytics. This revenue is primarily recognized from services rendered under non-cancellable subscription order agreements or, in limited circumstances, variable not-to-exceed purchase orders. Mission
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solutions revenue is generated from firm-fixed price long-term engineering and construction contracts related to the Company's product offerings. Advanced technology programs revenue is primarily generated from firm fixed price service solutions, cost-plus service contracts and on a time and materials basis.
In accordance with Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”(“Accounting Standards Codification (“ASC”) 606”), the Company uses the five-step model of identifying the contract with a customer, identifying the performance obligations contained in a contract, determining the transaction price, allocating the transaction price, and determining when performance obligations are satisfied. Application of this model requires the application of significant judgment, as further discussed below.
Revenue is measured as the fair value of consideration received or receivable and net of discounts. The Company applies a policy election to exclude transaction taxes collected from customer sales when the tax is both imposed on and concurrent with a specific revenue-producing transaction. The Company estimates any variable consideration, and whether the transaction price is constrained, upon execution of each contract. Variable consideration is estimated as the most likely amount that is dependent upon the occurrence or non-occurrence of a future event. We continually review, and may reassess, the transaction price based on forecasted service level provisions within a limited amount of our customer purchase orders, costs incurred to date and historical experience. As a result, we may update our estimated constraints on revenue, which are generally provided on a prospective basis. The Company did not have any active contracts with significant variable consideration as of December 31, 2025.
Space-Based Intelligence and AI Services Revenue
Space-based intelligence & AI services revenue include imagery delivered from the Company’s proprietary satellite constellation and BlackSky Spectra software platform and in, limited cases, imagery directly uploaded to certain customers. Customers can directly task the Company's proprietary satellite constellation to collect and deliver imagery over specific locations, sites and regions that are critical to their operations. The Company offers customers several service level subscription options that include on-demand tasking or multi-year assured access programs. Assure access customers can secure priority access and imaging capacity at a premium over a region of interest on a take or pay basis. Imagery revenue is recognized over the subscription period based on the promise to continuously provide contractual satellite capacity for tasked imagery or analytics at the discretion of the customer. These products, based on the context of the contract, are capable of being distinct performance obligations.
The Company leverages proprietary AI and ML algorithms to analyze data coming from both the Company’s proprietary sensor network and third-party space and terrestrial sources to provide hard-to-get data, insights, and analytics for customers. The Company continues to integrate and enhance its offerings by performing contract development, while retaining the intellectual property rights. The Company also offers services related to object, change and anomaly detection, site monitoring, and enhanced analytics services that can detect key pattern of life changes in critical locations such as ports, airports, and construction sites; retail activity; commodities stockpiles; and other sites that contain critical commodities and supply chain inventory.
The Company's analytics services are also offered on a similar subscription basis and provide customers with access to the Company's site monitoring, event monitoring and global data services. Analogous with the recognition of revenue for imagery, software analytical services revenue is recognized ratably over the subscription period.
Mission Solutions Revenue
The Company provides mission solutions, which develop and deliver customized advanced satellite and payload systems for a limited number of customers, leveraging the Company’s capabilities in mission systems engineering and operations. These offerings furnish government customers with an end-to-end pathway to customized sovereign space-based intelligence capabilities, enabling nations to accelerate the development, launch, and operation of their own space programs with full autonomy and control, ground station operations,
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and software and systems development. Mission solutions revenue is generated from cost-plus contracts and firm fixed price long-term engineering and development contracts.
Advanced Technology ProgramsRevenue
The Company offers various advanced technology programs, including technology enabled professional service solutions to support customer-specific software development requests, integration, testing, and training. These services, based on the context of the contract, are capable of being distinct performance obligations.
Advanced technology programs revenue is primarily generated from cost-plus contracts, and time and materials basis contracts and firm-fixed price service solutions contracts. For contracts structured as cost-plus or on a time and materials basis, the Company recognizes revenue based on the right-to-invoice when practically expedient, as the Company is contractually able to invoice the customer based on the control transferred to the customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date.
Estimate at Completion ("EAC") Adjustments
For firm fixed price mission solutions and advanced technology programs contracts, the Company recognizes revenue over time using the cost to cost input method to measure progress to complete the performance obligation. A performance obligation's EAC includes all direct costs such as labor, fringe, materials, subcontract costs and overhead. The Company uses significant judgment to estimate total costs at completion on a performance obligation by performance obligation basis including, but not limited to, labor productivity, program schedule, technical risk analysis, complexity, scope of the work and identified risks. Due to the continuous nature of the work, as well as when a change in circumstances warrants a modification, the EAC is reviewed and may result in cumulative changes to the contract profit. The Company recognizes changes in estimated contract sales or costs and the resulting changes in contract profit on a cumulative basis in the period in which the change is identified. If, at any time, the estimate of contract profitability indicates a probable anticipated loss on a contract, the Company recognizes the total loss as and when known. The following table presents the effect of aggregate net EAC adjustments on the Company's contracts:
Years Ended December 31,
(in thousands)
Basic and diluted net loss per share $ 0.25 $ 0.00
(1) The year ended December 31, 2025 included an incremental change in a performance obligation of $7.8 million from a contract modification of an existing advanced technology programs contract. The remaining EAC adjustments are not individually significant to the Company.
(2) The year ended December 31, 2024 included a favorable EAC adjustment of $1.1 million for an existing advanced technology programs contract. The remaining EAC adjustments are not individually significant to the Company.
Costs and Expenses
Space-based intelligence & AI services costs primarily include cloud computing and hosting services, internal labor to support the ground station network and space operations, and third-party data and imagery. Mission solutions costs primarily include the cost of direct materials to build and test specific components, such as the communications system, payloads, and sensor integration, as well as internal labor for design and engineering in support of long-term development contracts for customized customer satellites and payload systems. The Company also recognizes internal labor costs and external subcontract labor costs for its
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customer-centric software products. Advanced technology programs costs primarily include the cost of internal labor for service solutions that enhance customer adoption and operational integration of our technology.
Additionally, the Company recognizes stock-based compensation expense for those employees who provide direct labor to support the Company's product and service offerings.
Research and Development Costs
The Company incurs research and development costs, which are expensed as incurred, for researching next generation space and ground architectures in support of its long-term strategy. With the Company's acquisition of BlackSky Satellite Systems, f/k/a LeoStella, in November 2024, research and development expense also includes investments in next generation satellite design and functionality. In addition, the Company recognizes costs incurred before the technological feasibility stage for internal projects, such as aerospace and other satellite developments, as research and development costs.
Advertising Costs
Advertising costs are expenses associated with promoting the Company’s services and products. Advertising costs are expensed as incurred and included in selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. For the years ended December 31, 2025 and 2024, advertising costs were $2.0 million and $1.6 million, respectively.
Income Taxes
The Company accounts for income taxes following the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enacted date.
The Company measures deferred tax assets based on the amount that the Company believes is more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including reversals of existing taxable temporary differences, tax-planning strategies, and historical results of recent operations. In evaluating the objective evidence that historical results provide, the Company considers three trailing years of cumulative operating income or loss. Valuation allowances are provided, if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. A full valuation allowance was recorded against the deferred tax assets as of December 31, 2025 and 2024. Changes in tax laws and rates may affect recorded deferred tax assets and liabilities and the Company's effective tax rate in the future.
The Company believes that its tax positions comply with applicable tax law. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
The Company's income tax expense or benefit, liability and/or receivable, deferred tax assets and liabilities, and liabilities for uncertain tax benefits reflect management’s best assessment of estimated current and future taxes to be paid or received.
Sponsor Shares
On September 9, 2021, BlackSky's predecessor company, Osprey Technology Acquisition Corp. (“Osprey”), completed its merger (the “Merger”) with Osprey Technology Merger Sub, Inc., a wholly-owned
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subsidiary of Osprey, and BlackSky Holdings, Inc. Osprey pre-Merger Class B common shares were exchanged for shares of the Company’s Class A common stock (the "Sponsor Shares") upon completion of the Merger. The Company accounted for the Sponsor Shares in accordance with the guidance contained in ASC 815-40, under which the Sponsor Shares did not meet the criteria for equity treatment and were recorded as derivative liabilities in the Company’s consolidated balance sheets as of December 31, 2025. The Sponsor Shares are adjusted to fair value at each reporting period and any net gains or losses in the change in fair value are recognized in loss on derivatives in the Company’s consolidated statements of operations and comprehensive loss.
Stock-Based Compensation
Restricted Stock Units
The Company grants restricted stock units ("RSUs") to certain employees, for which the grant date fair value is equal to the fair value of the Class A common stock on the date of grant. In order to determine the fair value of its Class A common stock on the date of grant prior to the Merger, the Company historically performed a valuation analysis using a combination of market and income approaches. Subsequent to the Merger, the Company uses the New York Stock Exchange (“NYSE”) trading price as the fair value of the Class A common stock for valuation purposes. For all awards where vesting is only subject to a service condition, including those subject to graded vesting, the Company has elected to use the straight-line method to recognize the fair value as compensation cost over the requisite service period.
Certain of the Company’s RSUs had performance vesting conditions that were triggered upon the consummation of the Merger. Therefore, since the performance conditions attributable to these RSUs had been met, the Company commenced recording the associated compensation expense, inclusive of a catch-up amount for the service period between their grant date and satisfaction of the performance condition, as of the closing of the Merger. The fair value of the RSUs that included a performance condition was recognized as compensation expense over the requisite service period using the accelerated attribution method, which accounts for RSUs with discrete vesting dates as if they were separate awards. The Company has not issued any RSUs with performance conditions since 2021 and there were no such RSUs outstanding as of December 31, 2025. Expense related to stock-based payments is classified in the consolidated statements of operations and comprehensive loss based upon the classification of each employee's cash compensation.