BlackSky Technology, Inc. (NYSE: BKSY) reported financial results for the fourth quarter of 2025, revealing a mixed performance that included a revenue shortfall versus expectations but notable improvements in profitability and a significant surge in backlog. The company posted revenue of $35.2 million, adjusted EBITDA of $8.8 million, and earnings per share of ($0.02). These figures compared to Stonegate Capital Partners' estimates of $41.1 million, $11.1 million, and ($0.18), respectively, and consensus estimates of $36.1 million, $7.2 million, and ($0.28).
The revenue miss was primarily driven by a decline in the Imagery and Software Analytical Services segment, which fell to $14.5 million, a 17% year-over-year decrease. Management attributed the weakness to ongoing budget uncertainty related to the Electro-Optical Commercial Layer (EOCL) program, which has tempered near-term government spending. However, the company's Mission Solutions segment provided a bright spot, surging to $9.5 million from just $1.0 million in the prior year, fueled by a new international Gen-3 contract and milestone deliveries. Professional and Engineering Services slipped to $11.2 million from $11.9 million year-over-year, impacted by project timing.
Despite the revenue miss, BlackSky demonstrated improved profitability. Adjusted EBITDA increased to $8.8 million from $7.4 million in the same period last year, supported by higher overall revenue and continued cost discipline. Gross margin expanded significantly to 72.6% from 65.3% in the third quarter of 2025, driven by a favorable revenue mix and operational efficiencies. The company's bottom line also benefited, with a narrower net loss per share of ($0.02) compared to consensus expectations of a ($0.28) loss.
Perhaps the most striking development was the company's record backlog. BlackSky secured over $240 million in new awards during the quarter, lifting total backlog to $345 million. The vast majority of these awards came from international Gen-3 contracts, underscoring growing global demand for its high-revisit, low-latency satellite imagery and analytics. The backlog provides strong visibility into future revenue and supports the company's strategy of scaling its constellation capacity.
Looking ahead, BlackSky's fiscal year 2026 guidance implies continued investment in scaling capacity, particularly for the Gen-3 constellation. Management remains cautious about the EOCL-related budget uncertainty but expects international demand to drive growth. The company's improved gross margin and adjusted EBITDA trajectory suggest that cost discipline and a mix shift toward higher-margin services are paying off. With a robust backlog and expanding profitability, BlackSky appears positioned to capitalize on the growing need for real-time geospatial intelligence, though near-term headwinds from government budget dynamics persist.
For more details, see the full announcement including downloadable images and bios here.
