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

Brian O’Toole: Good morning, Greg. Yes, we’re not seeing anything changed relative to the — what the kind of capabilities that customers are interested in getting from BlackSky. As you recall, our high frequency monitoring and analytic capability is unique in the market. And customers are looking to secure that capability especially in a supply constrained market. So we have been highly focused on new customers, particularly in the international defense and intelligence sector. And those customers are buying our baseline set of services around the types of consistent pricing, which is enabling us to drive this high margin element of our business.

Greg Mesniaeff: Thank you.

Operator: [Operator Instructions] We’ll take our next question from Griffin Boss with B Riley Securities, your line is open.

Griffin Boss : Hi, thank you for taking my questions. Appreciated. I just wanted to jump back to question that Edison asked earlier on the professional and engineering services that strong 45% margin is really nice to see. Just curious if you could elaborate your expectations sort of going forward about the mix between imagery and analytics? And then professional engineering services? Do you expect this to continue ramping as a percentage of overall revenue?

Brian O’Toole: Thanks, Griffin. I think, we’re anticipating a fairly consistent mix, continuing growth and imagery and analytics, there’ll always be some element of professional services as part of our business, which includes integration of our capabilities into customer environments, to drive subscription revenue, but also some of the R&D programs that we outlined, which are funding advanced technology capabilities for future type of services from the company. So we’re going to continue to grow the imagery element of the business. But there will always remain some element of professional services.

Griffin Boss : Got it. Okay, great. Thanks, Brian. And then, just jumping back to the critical integration milestone with the NRO. Can you elaborate at all more quantitatively, sort of the value that milestone unlocks above the 72 million allocated the first two years or I guess, I mean, if you can’t give a view on that, when might you expect the Anapro [ph] to make an announcement for additional rounds of funding guaranteed funding?

Brian O’Toole: Well, as I mentioned, that was a significant milestone it and BlackSky was the first commercial provider to achieve that milestone and validate their new commercial provider architecture. What that means is that streamlines the distribution of BlackSky imagery into U.S government systems, which at the end of the day, enables higher utilization and stronger demand. And so we’re excited about getting to that point. We anticipate that in 2024, we will be working with NRO and the next phase of the EOCL subscription.

Griffin Boss : Okay. Got it. And then last one for me, if I could. Do you disclose the average length of contract represented under that $252 million backlog just trying to better understand sort of when that revenue is expected to be recognized?

Brian O’Toole: No, we don’t disclose that. But what you’re seeing is a number of multi-year agreements. And different agreements have various elements. So the timing, but Henry, do you want to add to that?

Henry Dubois: Sure. Griffin, when you see the Q that we file after closed business today, there is a breakdown of how much of that $252 million we expect to receive this year, which is about $24 million. And then we have the remainder is kind of about $52 million of that is in 2024 and the rest is 2025 and beyond.

Griffin Boss : Got it. Great. That’s super helpful. Thanks again. Appreciate it. Congrats on the progress.

Henry Dubois: Thanks.

Operator: And we’ll take our next question from [indiscernible] with Quality [ph] Analytics. Your line is open.

Unidentified Analyst: Hi, everyone. I have two question. Since the announcement of commercial deals with SynMax and Spire this year. How much the commercial space evolved for BlackSky? And is there any plan in motion for diversification on the customer side? Also, can you throw some light on the nature of your relationship with bias for next gen solutions and how to stop it?

Aly Bonilla : Could you repeat the first part of your question please, we’re having a hard time hearing you?

Unidentified Analyst: Yes, so it was about the announcement of the commercial deals with SynMax and Spire this year. So how has the commercial space evolved for BlackSky? And is there any plan in motion for diversification? On the commercial front?