BlackSky Technology Inc. (NYSE:BKSY) Q3 2023 Earnings Call Transcript

Operator: And we’ll take our next question from Josh Sullivan with The Benchmark Co. Your line is open.

Josh Sullivan: Hey, good morning. Just this for as CapEx the milestone driven. Anything we should note driving the milestone push out this quarter supply chain or anything else worth noting?

Brian O’Toole: No, Josh, I think, building and launching satellites just has typical variability as you move through that process. And that’s being reflected in the timing of these milestone payments.

Josh Sullivan: And then on the AI project, you mentioned tracking moving targets, is that a resource heavy commitment? Or is that a capability where you can track a significant number of moving targets at one time?

Brian O’Toole: It’s all fully automated through AI, and gets processed in our scalable cloud platform spectrum. And we’re able to do that as part of our real time capability in our platform, so it scales pretty significantly across the world.

Josh Sullivan : Got it. And then just one last one, just on EOCL. How is it ramped relative to your initial expectations?

Brian O’Toole : It’s right in line. As you’ll recall, we’re in year two. And they originally funded two years of subscription. And so we’re on right on track with expectations. The IOC milestone on integrating with the rolls, commercial imagery and data architecture was a very big milestone, as that accelerates access to a much broader customer base within the U.S government, and we were experiencing in the first part of the contract. So that program is progressing as we expected. And we’re excited about this milestone. It’s really important to the next phase of the program.

Josh Sullivan: Okay. Thank you for the time.

Operator: And we’ll take our next question from Jeff Van Rhee with Craig Hallum. Your line is open.

Jeff Van Rhee : Great, thank. And congrats, guys on the progress to EBITDA, good incremental margins here. Couple questions for me. On the subscription component of the big Ministry of Defense win, understanding there’s some variability there, but when does that subscription part really start to layer in? That’s my first question. The second was Q4, kind of back to the expected progression, because to go up roughly 50% sequentially, being a possibility based on what you see in the pipeline. And definitely curious to understand more about that, specifically on the imagery and software line that’s been relatively flat here. And I’m just wondering, how much of that possible spike in Q4 do you think could fall in that imagery and software line and where you want to give precise guidance there, but at least a sense of the magnitude of it coming on imaging software versus professional and engineering? Thanks,

Brian O’Toole : Yes. Jeff, I think the answer is related to both questions. We typically see in the third and fourth quarter uptick in imagery, analytics, subscription revenue, tied to certain contracts. So we’re — to your question on our new Ministry of Defense Contract or expansion of that, that’s driving incremental revenue from that from imagery and analytics in the fourth quarter. And then, as Henry outlined we’re also seeing a strong contribution from professional services for some of the larger programs we won earlier in the year.

Jeff Van Rhee: Okay, thank you.

Operator: And we’ll take our next question. From Greg Mesniaeff with WestPark Capital. Your line is open.

Greg Mesniaeff: Yes, thank you for taking my question. When you look at some of your most recent contracts, can you comment on any changes in terms that you’re seeing any trends in other words, timelines and the kind of deliverables that customers are asking for? Thanks.