Q3 2023 BlackSky Technology Inc Earnings Call
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Speaker 1: Good morning, ladies and gentlemen, and welcome to Black Sky Technologies' third quarter 2023 earnings conference call.
Good evening, ladies and gentlemen, and welcome to Black Sky Technologies' third quarter 2023 earnings Conference call.
Speaker 1: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session.
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Please note this conference call is being recorded.
Speaker 1: I would now like to turn the call over to Ali Benia, BlackSky's Vice President of Investor Relations. Please go ahead, Ali.
I'd now like to turn the call over to Ali Bania Black Sky, Vice President of Investor Relations. Please go ahead Ali.
Speaker 2: Good morning, and thank you for joining us. Today, I'm joined by our Chief Executive Officer, Brian O'Toole, and our Chief Financial Officer, Henry Dubois. On today's call, Brian will provide some highlights on the quarter and give a strategic update on the business. Henry will then review the company's third quarter financial results and outlook for 2023. Following our prepared remarks, we will open the line for your questions.
Good morning, and thank you for joining us today I'm joined by our Chief Executive Officer, Brian No tool and our Chief Financial Officer, Henry Dubois on today's call, Brian will provide some highlights on the quarter and give a strategic update on the business and we will then review the company's third quarter financial results and outlook for 2023.
Following our prepared remarks, we will open the line for your questions.
Speaker 2: A replay of this conference call will be available from approximately 12.30pm Eastern time today through November 22nd. Information to access the replay can be found in today's press release.
A replay of this conference call will be available from approximately 12 30 P. M. Eastern time today through November 22nd information to access the replay can be found in today's press release. Additionally, a webcast of this earnings call will be available in the Investor Relations section of our website at.
Speaker 2: Additionally, a webcast of this earnings call will be available in the Investor Relations section of our website at www.blacksky.com.
U W Dot black Sky Dot com.
Speaker 2: In conjunction with today's call, we have posted a quarterly earnings presentation on the investor relations website that you may use to follow along with our prepared remarks.
In conjunction with today's call we have posted a quarterly earnings presentation on the Investor Relations website that you may use to follow along with our prepared remarks.
Speaker 2: Before we begin, let me remind you that certain statements made during today's conference call regarding our future plans, objectives, and expected performance, including our financial guidance for 2023, our forward-looking statement.
Before we begin let me remind you that certain statements made during today's conference call regarding our future plans objectives and expected performance, including our financial guidance for 2023 are forward looking statements actual results may differ materially as these statements are based on our current expectations as.
Speaker 2: Actual results may differ materially as these statements are based on our current expectations as of today and are subject to risks and uncertainties.
Today and are subject to risks and uncertainties, including.
Speaker 2: including those stated in our Form 10-K . We encourage you to review our press release, Form 10-K , and other recent SEC filings for a full discussion of the risks and uncertainties that pertain to these statements, and that may affect future results or the market price of our stock. BlackSky assumes no obligation to update forward-looking statements except as may be required by applicable law. In addition,
Including those stated in our Form 10-K.
We encourage you to review our press release Form 10-K, and other recent SEC filings for a full discussion of the risks and uncertainties that pertain to these statements and that may affect future results or the market price of our stock Black Sky assumes no obligation to update forward looking statements, except as may be required by applicable law.
Paul.
In addition.
Speaker 2: During today's call, we will refer to certain non-GAAP financial measures, including adjusted EBITDA, adjusted imagery and software analytical services cost of sales, and cash operating expenses.
During today's call, we will refer to certain non-GAAP financial measures, including adjusted EBITDA adjusted imagery and software analytical services cost of sales and cash operating expenses.
Speaker 2: A reconciliation of these non-GAAP financial measures to their most comparable GAAP measures are included in today's accompanying presentation, which can be viewed and downloaded from our investor relations website.
A reconciliation of these non-GAAP financial measures to their most comparable GAAP measures are included in today's accompanying presentation, which can be viewed and downloaded from our investor Relations website.
Speaker 2: At this point, I'll turn the call over to Brian O'Toole. Brian .
At this point I'll turn the call over to Brian No tool Ryan.
Speaker 3: Thanks, Allie. Good morning, everyone. Thank you for joining us on today's call.
Thanks, Allie and good morning, everyone. Thank you for joining us on today's call.
Speaker 3: And please report that BlackSky delivered another strong quarter with record revenues, continued expansion of our customer base, and nearly break even adjusted EBITDA.
I am pleased to report that Black Sky delivered another strong quarter with record revenues continued expansion of our customer base and nearly breakeven adjusted EBITDA.
Speaker 3: We continue to see growing demand from government agencies around the world for BlackSky's space-based intelligence capability.
We continue to see growing demand from government agencies around the world for Black Sky space based intelligence capabilities.
Speaker 3: and are capitalizing on this opportunity by successfully converting our increasing sales pipeline into new and expanded contracts. The combination of our growing customer base.
And are capitalizing on this opportunity by successfully converting our increasing sales pipeline into new and expanded contracts.
The combination of our growing customer base.
Effective cost management.
Speaker 3: and the strong operating leverage of our business has us on a clear path toward long-term profitable growth.
And the strong operating leverage of our business has us on a clear path towards long term profitable growth.
Yeah.
Speaker 3: Before I begin, I want to take a moment to express our empathy for those affected by the crisis in Israel and Gaza.
Before I begin I want to take a moment to express our empathy.
For those affected by the crisis in Israel in Gaza.
Speaker 3: This is a very difficult time for many, and our hearts go out to the people who have lost loved ones and are living through this horrific conflict.
This is a very difficult time for many.
And our Hearts go out to the people who have lost loved ones.
And our living through this horrific conflict.
From the conflict in the Middle East.
Speaker 3: to this week's earthquake in Nepal, or the ongoing war in Ukraine.
This week's earthquake in Nepal.
The ongoing war in Ukraine.
Speaker 3: Space-based intelligence is playing a critical role in supporting humanitarian, economic, and national security interests both here and abroad. Whether it's the delivery of humanitarian aid providing transparency.
Space Space Intelligence is playing a critical role in.
Supporting humanitarian economic and.
And national security interests, both here and abroad.
Okay.
Whether it's the delivery of humanitarian aid.
Providing transparency to crisis events.
We're protecting the homeland.
Speaker 3: Black Sky is proud to be supporting our customers by reliably delivering thousands of images and analytic products every day on critical events all over the world.
Sky is proud to be supporting our customers by reliably delivering thousands of images and analytic products every day.
On critical events all over the world.
Speaker 3: The demand for black skies high frequency imagery and AI driven analytics continues to accelerate.
The demand for Black Sky high frequency imagery, and AI driven analytics continues to accelerate.
Speaker 3: as defense and national security organizations worldwide.
As defense and National security organizations worldwide.
Speaker 3: seek to expand their capabilities and secure our capacity to meet their long-term mission needs.
Seek to expand their capabilities and secure our capacity to meet their long term mission needs.
Yes.
Speaker 3: Now let's turn to slide 5 and our recent highlight.
Now, let's turn to slide five and our recent highlights.
Speaker 3: which continues to demonstrate strong quarter over quarter operating performance.
Which continues to demonstrate strong quarter over quarter operating performance.
Speaker 3: and growing customer demand for Black Skies products and services.
And growing customer demand for black Sky's products and services.
First we achieved.
Speaker 3: We achieved record third quarter revenue of over $21 million.
<unk> record third quarter revenue of over $21 million.
Speaker 3: a 26% increase over the prior year quarter.
A 26% increase over the prior year quarter.
Speaker 3: Demand for our products and services remains strong as we continue to meet our customer commitments focus execution and reliable delivery of our space space capabilities.
Demand for our products and services remains strong as we continue to meet our customer commitments through focused execution and reliable delivery of our space based capabilities.
Second.
Speaker 3: We sign new contracts and renewal agreements with multiple U.S. and international government agencies. Value it at...
We signed new contracts and renewal agreements with multiple U S and international government agencies.
Valued at up to $20 million.
Speaker 3: These contract wins demonstrate how Black Sky is increasingly relied upon by some of the most demanding customers around the world.
These contract wins demonstrate how black sky is an increasingly relied upon.
By some of the most demanding customers around the world.
Speaker 3: and brings our year-to-date contract bookings to over $220 million.
And brings our year to date contract bookings over $220 million.
Third.
Speaker 3: For the first nine months of the year, our imagery and analytics revenue grew $15 million, or 48% compared to the same period in 2022.
For the first nine months of the year, our imagery and analytics revenue grew $15 million.
48% compared to the same period in 2022.
Speaker 3: This revenue increase delivered an incremental contribution margin of eight of 98%
This revenue increase delivered an incremental contribution margin.
Of eight of 98%.
Speaker 3: and further illustrates the strong operating leverage of our business.
And further illustrates the strong operating leverage of our business.
Speaker 3: This is a key driver in scaling our business to profitability.
This is a key driver and scaling our business to profitability.
Fourth.
Speaker 3: as a result of strong operating leverage and continued focus on responsible cost management.
As a result of strong operating leverage and continued focus on responsible cost management.
Speaker 3: We reported nearly break-even adjusted EBITDA in Q3.
Reported nearly breakeven adjusted EBITDA in Q3.
Speaker 3: This quarter's performance keeps us on track toward achieving our goal of positive adjusted EBITDA in the fourth quarter.
This quarter's performance keeps us on track toward achieving our goal of positive adjusted EBITDA in the fourth quarter.
Speaker 3: And finally, we're honored to have been named to the 2023 Deloitte Technology Fast 500 list. Joining many other...
And finally, we're honored to have been named to the 2023, Deloitte technology fast 500 list.
Joining many other fast growing companies.
Speaker 3: These highlights demonstrate strong focused execution and the ongoing momentum we are experiencing across all aspects of our business.
These highlights demonstrate strong focused execution and the ongoing momentum we are experiencing across all aspects of our business.
Speaker 3: We continue to see increasing interest from government agencies worldwide, looking to secure access to our high-frequency satellite imagery in AI-driven analytics.
We continue to see increasing interest from government agencies worldwide looking to secure access to our high frequency satellite imagery and AI driven analytics.
Speaker 3: This growing market demand puts us in a strong position.
This growing market demand puts us in a strong position to capitalize on new sales opportunities and realize sustainable profitable growth.
Speaker 3: to capitalize on new sales opportunities and realize sustainable, profitable growth. I would now like to share some operational highlights.
I would now like to share some operational highlights from the quarter.
Turning to slide six.
Speaker 3: Global demand for our products and services continues to remain strong. As many governments around the world are increasing their investments in space-based intelligence.
Global demand for our products and services continues to remain strong as many governments around the world are increasing their investments in space based intelligence.
Speaker 3: in support of their country's critical national security and economic interests.
And supported their country's critical national security and economic interests.
Speaker 3: We're seeing more international governments engaging with Black Sky to secure immediate and long-term access to our high frequency imaging and
We're seeing more international governments, engaging with black sky to secure immediate and long term access.
Two our high frequency imaging and analytic capabilities.
Speaker 3: One example is a multi-year master services agreement we recently signed for a new International Ministry of Defense customer.
One example is a multi year Master services agreement, we recently signed.
For a new international Ministry of Defense customer.
Speaker 3: This contract, valued up to $8 million, provides the customer with on-demand and assured access to a high-frequency imagery
This contract valued up to $8 million provides the customer with on demand and assured access to.
So a high frequency imagery and analytics services.
Speaker 3: Through our Spectra software platform, customer end users will be able to directly task our satellite constellation to monitor critical areas of interest that matter most to them.
Through our spectra software platform customer.
Customer end users will be able to directly task our satellite constellation.
To monitor critical areas of interest that matter most to them.
Speaker 3: This contract also enables the customer to access capacity from our upcoming Gen 3 Constellation. Once these new advanced...
This contract also enables the customer to access capacity from our upcoming Gen three constellation.
Once these new advanced satellites come online.
Speaker 3: We are proud to add this customer to our growing customer base supporting major defense and intelligence organizations around the globe.
We are proud to add this customer to a growing customer base supporting major defense and intelligence organizations around the globe.
Speaker 3: Also during the quarter, we expanded a contract with an existing international defense customer for increased assured access to Black Sky's imaging capacity.
Also during the quarter, we expanded a contract with an existing international defense customer for increased assured access to black skies imaging capacity.
Speaker 3: In a supply-constrained environment, governments are seeking multi-year agreements.
In a supply constrained environment.
Governments are seeking multi year agreements.
Speaker 3: in order to secure capacity over their critical regions of entry.
In order to secure capacity over their critical regions of interest.
Speaker 3: This contract also includes the development of a next generation architecture to support their long-term tactical needs.
This contract also includes the development of a next generation architecture.
To support their long term tactical needs.
Moving on to slide seven.
Speaker 3: We continue to be strong demand for Black Skies products and services from the US government.
We continue to see strong demand for black Sky's products and services from the U S government.
Speaker 3: U.S. intelligence agencies, as well as Department of Defense customers.
U S intelligence agencies as well as department of defense customers continue.
Speaker 3: continue to expand their interests in leveraging commercial space capability.
Continue to expand their interests and leveraging commercial space capabilities.
Speaker 3: for a variety of existing and emerging mission applications.
For a variety of existing and emerging mission applications.
Speaker 3: During the quarter, we expanded some of our major existing contracts and closed on a number of new contracts.
During the quarter, we expanded some of our major existing contracts and closed on a number of new contracts.
Speaker 3: First, we were awarded over $9 million in contract expansions with existing US government agencies for our advanced imagery.
First we were awarded over $9 million in contract expansions with existing U S government agencies.
For our advanced imagery and analytics services.
Speaker 3: We're pleased that many government agencies continue to rely on Black Sky for our space-based capabilities and we look forward to continuing to build our relationships with them.
We're pleased that many government agencies continue to rely on black sky for our space based capabilities and we look forward to continuing to build our relationships with them.
Second.
Speaker 3: We won a contract with the U.S. Air Force Research Laboratory, funded by the U.S. Space Development Agency.
We won a contract with the U S Air Force Research Laboratory.
Funded by the U S space Development agency.
Speaker 3: to provide an automated target recognition service to track mobile assets in real time.
To provide an automated target recognition service to attract mobile assets in real time.
Speaker 3: This contract will leverage our proprietary AI capability diffuse together multiple satellite data sources, such as radio frequency and electro-optical sensor data, to track and maintain custody.
This contract will leverage our proprietary AI capability.
Used together multiple satellite data sources, such as radio frequency and electro optical sensor data to <unk>.
Rack can maintain custody of moving vehicles.
Speaker 3: This project will demonstrate secure dissemination of actionable intelligence to remote devices and analysts worldwide.
This project will demonstrate secured dissemination of actionable intelligence to remote devices and analysts worldwide.
Speaker 3: This is another example of some of the advanced capabilities Black Sky is developing to support Department of Defense requirements for space-based intelligence.
This is another example of some of the advanced capabilities Black Sky is developing to support department of defense requirements for space based intelligence.
Turning to slide eight.
Speaker 3: A major achievement during the quarter was the successful integration of our high frequency imagery services with the NRO's commercial imagery architecture.
A major achievement during the quarter.
It was the successful integration.
Of our high frequency imagery services, where the Nro's commercial imagery architecture.
Speaker 3: The US government has been designing and building a commercial imagery and data architecture to streamline the ordering and
The U S government has been designing and building a commercial imagery and data architecture to streamline the ordering and receipt of products.
Speaker 3: This capability enables commercial providers like BlackSkies.
This capability enables commercial providers like black Sky too.
Speaker 3: to integrate and scale the delivery of imagery via a series of APIs and enterprise interfaces to go.
To integrate and scale the delivery of imagery V S series of Api's.
And enterprise interfaces to government end users.
Speaker 3: Black Sky has been working with the NRO on the integration into this architecture since the beginning of the EOCL contract.
Black Sky has been working with the NRO on the integration into this architecture since the beginning of the E O C L contract.
Speaker 3: In Q3, we successfully completed the initial operating capability or IOC milestone required under the contract.
In Q3, we successfully completed the initial operating capability or IOC milestone required under the contract.
Speaker 3: Black Sky is the first commercial imagery company.
Black Sky as the first commercial imagery company.
Speaker 3: to successfully integrate and validate performance of this architecture.
To successfully integrate and validate performance of this architecture.
Speaker 3: This was an important milestone as it further improves access
This was an important milestone as it further improves access and.
Speaker 3: and utilization of black skies imagery within the U.S. government.
And utilization of Black skies imagery within the U S government.
Speaker 3: As evidenced by some of the key wins this quarter, BlackSky continues to win new advanced R&D programs to support emerging mission requirements.
As evidenced by some of the key wins this quarter.
<unk> continues to win new advanced R&D programs to support emerging mission requirements.
Speaker 3: Slide 9 shows some of our capabilities supporting recent contractors.
Slide nine shows some of our capability supporting recent contract awards.
Speaker 3: For example, earlier this year, we released our multi-frame burst imagery capability, which takes multiple images in succession to achieve a near-
For example.
Earlier this year, we released our multi frame burst imagery capability.
Which takes multiple images and succession.
To achieve a near video collection.
Speaker 3: This burst capability can be used by our AI algorithms to identify moving targets and create 3D models.
This burst capability can be used by our AI algorithms to identify moving targets and create <unk> models.
Speaker 3: Another example is the AI platform that we developed as part of the government's IR
Another example is the AI platform that we developed as part of.
The governments I ARPA Smart program.
Speaker 3: which uses AI to provide broad area search capability and analytics on over 35 million spur kilometers of imagery.
Which uses AI to provide broad area search capability and analytics on over 35 million square kilometers of imagery.
Yeah.
Speaker 3: In anticipation of the U.S. government's growing requirements for space situational awareness
In anticipation of the U S government's growing requirements for space situational awareness week.
Speaker 3: We've been able to demonstrate the use of our satellites to capture non-Earth images of objects in space. We've been able to demonstrate the use of our satellites to capture non-Earth images of objects in space.
We've been able to demonstrate the use of our satellites to capture not earth.
Images of objects in space.
Showing the versatility of our satellite constellation.
Speaker 3: Customers have also taken advantage of our advanced AI enabled site monitoring capability.
Customers have also taken advantage of our advanced AI enabled site monitoring capabilities.
Speaker 3: which provide automated detection and classification of objects of interest, such as airports, ports, and
Which provide automated detection and classification of objects of interest such as airports ports and ships around the world.
Speaker 3: Through the combination of our AI-enabled analytics with our high-performance Constellation, we are able to rapidly develop and deliver innovative next-generation technology solutions.
Through the combination of our AI enabled analytics with our high performance constellation.
We are able to rapidly develop and deliver innovative next generation technology solutions.
Speaker 3: that can be instrumental in our customers' ability to leverage space-based intelligence. Thank you for coming today.
That can't be instrumental in our customers' ability to leverage space based intelligence.
Turning to slide 10.
Speaker 3: I'm happy to report that our Gen 3 satellite program remains on track for launch in 2024.
I'm happy to report that our Gen. Three satellite program remains on track for launch in 2024.
Speaker 3: We are now receiving critical and long lead components and are moving it to the assembly and integration of the first unit.
We are now receiving critical on long lead components and are moving into the assembly and integration of the first units.
Speaker 3: We are also scaling our satellite manufacturing production line.
We are also scaling our satellite manufacturing production line.
Speaker 3: And we'll provide more details on specific timing of the program as we progress in 2024.
And we will provide more details on specific timing of the program as we progress in 2024.
Speaker 3: In summary, we're pleased with the record revenues achieved in Q3 demonstrating the strong customer demand in the market and the ongoing momentum in winning new contracts and renewal agreements that position us for continued revenue growth.
In summary.
We're pleased with the record revenues achieved in Q3, demonstrating the strong customer demand in the market.
And the ongoing momentum in winning new contracts and renewal agreements that position us for continued revenue growth.
Speaker 3: I'll now turn it over to Henry to go through the quarterly financial results in more detail. Henry?
I'll now turn it over to Henry.
Go through the quarterly financial results in more detail Henri.
Speaker 3: Thank you, Brian , and good morning, everyone. I'm pleased with the progress we've made across many aspects of our business, and especially with our third quarter financial results.
Thank you, Brian and good morning, everyone I am pleased with the progress we've made across many aspects of our business and especially with our third quarter financial results.
Speaker 4: Beginning with slide 12, total revenue for the third quarter of 2023 was $21.3 million, a new company record.
Beginning with slide 12 total revenue for the third quarter of 2023 was $21 3 million a new company.
Any record.
Speaker 4: This was an increase of $4.3 million or 26% over the prior year quarter. Imagery and analytics revenue grew to $15.3 million, an 11% increase over the prior year period primarily driven by greater volumes of imagery delivered to new and existing customers worldwide.
This was an increase of $4 $3 million or 26% over the prior year quarter.
Imagery and analytics revenue grew to $15 $3 million, an 11% increase over the prior year period, primarily driven by greater volumes of imagery delivered to new and existing customers worldwide.
Speaker 4: Professional and Engineering Services revenue was $6 million in the third quarter of 2023.
Professional engineering services revenue was $6 million in the third quarter of 2023.
Speaker 4: compared to $3.2 million in the prior year quarter.
Compared to $3 $2 million in the prior year quarter.
Speaker 4: The increase of $2.8 million was primarily driven by higher professional service fees from the ramp-up of new customer programs won this year.
The increase of $2 $8 million was.
Merrily driven by higher professional service fees from the ramp up of new customer programs won this year.
Speaker 4: As you may recall, we won a $150-plus million contract with an International Ministry of Defense customer in Q1 of this year. The initial development work on this contract is contributing to the increased revenues and includes professional fees to set up and integrate these services prior to when the multi-year subscription part of the contract begins.
As you May recall, we won a 150 plus million dollar contract with an international Ministry of defense customer in Q1 of this year.
The initial development work on this contract is contributing to the increased revenues and includes professional fees to set up and integrate these services prior to when the multiyear subscription part of the contract begins.
Speaker 4: Turning to cost of sales, we continue to demonstrate strong operating leverage in our imagery and analytics business as shown on slide 13.
Turning to cost of sales, we continued to demonstrate strong operating leverage in our imagery and analytics business as shown on slide 13.
Speaker 4: Excluding stock-based compensation, depreciation, and amortization expenses.
Excluding stock based compensation depreciation and amortization expenses imager.
Speaker 4: imagery and analytics cost of sales the first nine months of 2023 was $10.4 million. A $300,000 increase or 3% increase compared to $10.1 million in the same period of 2022.
Imagery and analytics cost of sales for the first nine months of 2023 was $10 4 million, a $300000 increase or 3% increase compared to $10 1 million in the same period of 2022.
Speaker 4: If you look at the same nine-month periods for our imagery and analytics revenue, we grew revenues this year to $46.4 million compared to $31.2 million last year, an increase of $15.2 million, or 48% year over year.
If you look at the same nine month periods for our imagery and analytics revenue. We grew revenues this year to $46 4 million compared to $31 $2 million last year, an increase of $15 2 million or 48% year over year.
Speaker 4: When comparing the $300,000 increase in cost of sales to the $15.2 million increase in revenue, the resulting incremental margin on this revenue was 98% for the first nine months of this year, further validating our strong operating leverage in our core imagery and analytics services business.
When comparing the $300000 increase in cost of sales to the $15 2 million dollar increase in revenue the resulting incremental margin on this revenue was 98% for the first nine months of this year further validating our strong operating leverage in our core imagery and analytics services business.
Speaker 4: This is a key factor driving our adjusted EBITDA improvement and how we anticipate scaling our business efficiently and achieving profitability. Let's move.
This is a key factor driving our adjusted EBITA improvement and how we anticipate scaling.
Business efficiently and achieving profitability.
Let's move to slide 14, and talk about operating expenses.
Speaker 4: For this discussion, I will refer to cash operating expenses, which excludes stock-based compensation and depreciation and amortization expenses.
For this discussion I will refer to cash operating expenses, which excludes stock based compensation and depreciation and amortization expenses.
Speaker 4: This approach enables us to more effectively compare our year-over-year costs for the business without the impact from non-cash item.
This approach enables us to more effectively compare our year over year cost for the business without the impact from noncash items.
Speaker 4: For the third quarter of 2023, cash operating expenses were $15.4 million compared to $16.1 million in Q3 of last year.
For the third quarter of 2023 cash operating expenses were $15 $4 million compared to $16 1 million in Q3 of last year.
Speaker 4: The year-over-year decrease in cash operating expenses of $700,000 or 4% was primarily driven by reductions in general corporate costs including insurance premiums, rent expense, and professional fees that more than offset investments in our go-to market initiatives.
The year over year decrease in cash operating expenses of $700000 or 4%.
It was primarily driven by reductions and general corporate costs, including insurance premiums rent expense and professional fees that more than offset investments in our go to market initiatives.
Speaker 4: We remain highly focused on managing our costs responsibly, which is another key factor driving our improvement adjusted EBITDA performance.
We remain highly focused on managing our costs responsibly, which is another key factor driving our improving adjusted EBITDA performance.
Speaker 4: Turning to slide 15, for the third quarter of 2023, we reported in adjusted EBITDA loss of roughly $400,000 or essentially breakies.
Turning to slide 15.
For the third quarter of 2023, we reported an adjusted EBITDA loss of roughly $400000 or essentially breakeven.
Speaker 4: This is a 93% year-over-year improvement over the $6.6 million loss in the prior year period and was primarily driven by a few key facts.
This is a 93% year over year improvement over the $6 $6 million loss in the prior year period and was primarily driven by a few key factors.
Speaker 4: First, strong revenue growth driven by increased customer demand worldwide.
First strong revenue growth driven by increased customer demand worldwide.
Speaker 4: Second, high incremental contribution margins in our imagery and analytic services business, as well as higher professional services revenue with better margins from new programs this year that also contributed to increased gross profits. And third, Fruit and Clause Management.
Second high incremental contribution margins in our imagery and analytics services business as well as higher professional services revenue with better margins from new programs. This year that also contributed to increased gross profits and third prudent cost management.
Speaker 4: We're very pleased with the adjusted EBITDA performance in the third quarter, and these results give us further confidence that we will achieve our goal of realizing positive adjusted EBITDA in Q4.
We're very pleased with the adjusted EBITDA performance in the third quarter and these results give us further confidence that we will achieve our goal of realizing positive adjusted EBITDA in Q4.
Speaker 4: As you will note, we are also reporting a positive net income for the quarter of $675,000.
As you will note. We are also reporting a positive net income for the quarter of $675000.
Speaker 4: The primary driver for the positive net income was the accounting treatment of our warrant liability exposure.
The primary driver for the positive net income was the accounting treatment of our warrant liability exposure.
Speaker 4: If you net warrant gains and losses out, our quarterly net loss in Q3 2023 was a $3.9 million improvement over the net loss in Q3 2022.
If you net warrant gains and losses out our quarterly net loss in Q3 2023 was a $3 9 million dollar improvement over the net loss in Q3 2022.
Moving onto our balance sheet.
Speaker 4: We enter the third quarter of 2023 with $51.5 million of cash, restricted cash, and short term of this.
We ended the third quarter of 2023 with $51 $5 million of cash restricted cash and short term investments.
Speaker 4: Our capital expenditures in the third quarter of 2023 were $7.5 million, which is down about $5 million from Q2 this year due to the timing of some payments on our Gen 3 satellite.
Our capital expenditures in the third quarter of 2023 were $7 $5 million, which is down about $5 million from Q2. This year due to the timing of some payments on our gen three satellites.
Speaker 4: As you know, the timing of our cathode can be lumpy from quarter to quarter and is more milestone driven than timeline driven.
As you know the.
The timing of our Capex spend can be lumpy from quarter to quarter and is more milestone driven than timeline driven.
Speaker 4: This brings our total CapEx spend for the first nine months of this year to $35.9 million.
This brings our total capex spend for the first nine months of this year to $35 $9 million.
Speaker 4: With a cash balance of over $51 million, prudent cost management, and our drive to profitable adjusted EBITDA, we believe we have sufficient cash and liquidity to meet our needs for the foreseeable future.
With a cash balance of over $51 million.
Prudent cost management, and our drive to profitable adjusted EBITDA, We believe we have sufficient cash and liquidity to meet our needs for the foreseeable future.
Speaker 4: Now let's move on to our 2023 outlook as shown on slide 16.
Now, let's move on to our 2023 outlook as shown on slide 16.
Speaker 4: As I mentioned earlier, we had a strong adjusted EBITDA performance in Q3 achieving nearly break-even as a result of our double-digit revenue growth and consistent operating leverage in our business.
As I mentioned earlier, we had a strong adjusted EBITDA performance in Q3, achieving nearly breakeven as a result of our double digit revenue growth and consistent operating leverage in our business.
Speaker 4: With continuing revenue growth and a laser focus on responsible cost management, we remain on track to achieve positive adjusted EBITDA in Q4 of this year.
With continuing revenue growth and a laser focus on responsible cost management, we remain on track to achieve positive adjusted EBITDA in Q4 of this year.
Speaker 4: On revenue, there is some degree of uncertainty surrounding the timing of revenue from expected new contracts which may include large initial deliver.
On revenue there is some degree of uncertainty surrounding the timing of revenue from expected new contracts, which may include a large initial deliveries.
Speaker 4: Considering this variability, we are narrowing the range of our 2023 revenue outlook to be between $84 million and $90 million.
Considering this variability we are narrowing the range of our 2023 revenue outlook to be between $84 million and $90 million.
Speaker 4: Even at the low end of this revenue range, we expect to achieve positive adjusted EBITDA in Q4 this year.
Even at the low end of this revenue range, we expect to achieve positive adjusted EBITDA in Q4 this year.
Speaker 4: For capital expenditures, we are raising our expectation for 2020-23 spend to be between 48 million and 54 million dollars.
For capital expenditures, we are raising our expectation for 2023 spend to be between $48 million and $54 million.
Speaker 4: This increase is primarily related to the timing of milestone-based CAPX payments on our Gen 3 satellite constellation and launch down payments initially anticipated for 2024.
This increase is primarily related to the timing of milestone based capex payments on our Gen. Three satellite constellation and launched Downpayment initially anticipated for 2024.
Speaker 4: and summary, we're pleased with our financial performance and third quarter and the progress we've made across our business.
In summary, we're pleased with our financial performance in the third quarter and the progress we've made across our business.
Speaker 4: With that, I'll now turn it back over to Brian for some closing remarks. Brian ?
With that I'll now turn it back over to Brian for some closing remarks, Brian.
Speaker 3: Thank you, Henry. In closing, we're pleased with our third quarter results and the strong momentum we are continuing to experience across all aspects of our business.
Thank you Henry.
In closing, we're pleased with our third quarter results and the strong momentum we are continuing to experience across all aspects of our business.
Speaker 3: Our focus on the global defense and intelligence market is paying dividends as we continue to capture new customers, grow existing accounts, and deliver new and innovative technology solutions to support the long-term needs of our customers.
Our focus on the global defense and intelligence market is paying dividends as we continue to capture new customers grow existing accounts and deliver new and innovative technology solutions to support the long term needs of our customers.
Speaker 3: We are seeing a clear and growing demand for space-based intelligence.
We are seeing a clear and growing demand for space based intelligence.
Speaker 3: which is evidenced by a growing sales pipeline and conversion of that pipeline into sizeable multi-year contract backlog.
Which is evidenced by our growing sales pipeline and conversion of that pipeline into sizable multi year contract backlog.
Speaker 3: Our focused execution is delivering strong incremental revenue growth.
Our focused execution is delivering strong incremental revenue growth.
Speaker 3: and when coupled with responsible cost management enables us to achieve strong operating leverage in our business.
And when coupled with responsible cost management enables us to achieve strong operating leverage in our business.
Speaker 3: This is clearly evidenced by our adjusted EBITOP performance in the third quarter and keeps us on track to achieve positive adjusted EBITOP in Q4.
This is clearly evidenced by our adjusted EBITDA performance in the third quarter and keeps us on track to achieve positive adjusted EBITDA in Q4.
Speaker 3: At the same time, we continue to invest in expanding our AI capabilities and advancing our space architecture to deliver additional value to customers now and in the future.
At the same time, we continue to invest in expanding our AI capabilities and advancing our space architecture to deliver additional value to customers now and in the future.
Speaker 3: We look forward to a strong finish in the fourth quarter that will carry our momentum into 2024.
We look forward to a strong finish in the fourth quarter that will carry our momentum into 2024.
Speaker 3: This concludes our remarks for the call and we'll now take your questions.
This concludes our remarks for the call and we will now take your questions.
Okay.
We will now begin the question and answer session.
Speaker 1: To ask a question, you may press star then one on your touch tone phone.
To ask a question you May Press Star then one on your Touchtone phone.
Speaker 1: If you're using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please...
We're using a speakerphone please pick up your handset before pressing.
To withdraw your question. Please press Star then two.
Speaker 1: At this time, we will pause momentarily to assemble our roster. And we'll take...
At this time, we will pause momentarily to assemble our roster.
And we'll take our first question from Jason Smith with Lake Street. Your line is open.
Speaker 5: Hey guys, thanks for taking my questions. I'm sorry if I missed it, but do you guys give a backlog number?
Hey, guys. Thanks for taking my questions I.
I am sorry, if I missed it but did you guys give a backlog number.
Speaker 4: Jason, this senator, thank you for joining the call. We will have that in our queue in the backlog at the end of September 30th was about $252 million.
Hi, Jason.
Certainly thank you for joining the call we will have that in our Q and the backlog at the end of September 30th was about $252 million.
Speaker 5: Okay, perfect. And I know timing is always the wild card here, but have you seen any order cancellations?
Okay, perfect and I know timing is always the wildcard here, but have you seen any order cancellations.
Yeah.
No. It's just a matter of of timings.
Speaker 5: got it. And then, uh, final one for me, an old jump back into Q, the slight adjustment to the midpoint of the full year outlook. Is that being driven by one or two pushouts or is it just more broad base, the crosser customer base?
Got it and then final one for me and I'll jump back into queue, the slight adjust adjustment to the midpoint of the full year outlook is that being driven by one or two push outs or is it just more broad based across your customer base.
Speaker 3: Yeah, good morning, Jason. It's, as I mentioned last quarter, we have a number of contracts.
Yes, good morning, Jason.
As I mentioned last quarter.
We had a number we have a number of contracts.
Speaker 3: that we're expecting to close. And it's the timing of those contracts, and then it ramped those revenues, which is, which is,
We're expecting to close and.
It's the timing of those contracts and then a ramp of those revenues, which is which is.
Speaker 5: driving our slight refinement of our guides. Okay, understood. Thanks a lot.
Driving our our slate.
<unk> of our guidance.
Okay understood.
Thanks, a lot guys.
Thanks, Jason and thanks, Jason.
And we'll take our next question from Alex <unk> with Deutsche Bank. Your line is open.
Speaker 5: Hey, thanks for taking our questions. First, on the professional services margin, upside, is that something that we're going to see going forward? Do you expect it to normalize everything about that project?
Hey, Thanks for taking our questions first on the professional services.
<unk> applied is that something.
We're going to see going forward do you expect that to normalize how do we think about that trajectory.
Speaker 4: Thank you, Edison. Yeah, and you take a look at our professional services. As you may recall in the past, we were doing a lot of what we were calling funded R&D work, in which we were contributing as well. So we had very fairly low margins. As we move more into this integration type support for these new projects, before they become subscription-based services, yes, we would expect to have a higher, more commercial type margins on those.
Thank you Edison.
If you take a look at our professional services as you may recall in the past we were doing a lot of what we will call. It funded R&D work and which we're contributing as well. So we had very fairly low margins as we move more into this integration type support.
For these new products before they become a subscription based services, yes, we would expect to have a higher more commercial type margins on those.
Speaker 5: Okay. And then just, just high level question on the, I guess, closing of some of these big contracts, can you maybe go over, you know, in these discussions with the various governments? Why it appears to be taking, I guess, so long? Is it simply complexity, adoption, or something? There's a little bit more color there would be helpful.
Okay.
And then just just high level question on the I guess.
Closing of some of these big contracts can you maybe go over.
These discussions with the various governments why it appears to be taking I guess so long.
Is it simply complexity.
Adoption curve or something.
More color there would be helpful.
Speaker 3: Addison, I think there is a typically longer sales cycles with government customers. And.
Yes, listen I think.
There is a typically.
Longer sales cycles with government customers and.
Speaker 3: And that, as you can imagine, varies around the world. And as contracts get moved through.
And that as you can imagine varies.
Around the world and as contracts get moved through.
Speaker 3: their internal processes, sometimes they can take longer. But as also you're seeing in our business.
Their internal processes.
Times, they can take longer.
But as also you are seeing in our business.
Speaker 3: Once we establish those contracts, we're seeing incremental expansion of those on a regular basis. So it's usually the initial contracts that take longer, but once those are in place, it gives us very good visibility looking forward.
Once we establish those contracts we're seeing.
Incremental expansion of those on a regular basis. So its usually the initial contracts that take longer but once those are in place. It gives us very good visibility looking at looking forward.
Speaker 6: Gotcha. I just, I can speak one more. And if I look at the implied 4Q guides, even at the midpoint, it's a pretty decent growth acceleration. Do we think the fourth quarter will represent kind of a more normalized pace of growth going forward? And if so, I'm not trying to get guidance for next year, but is that something that you see could think you're continuing?
Got you.
So if I can sneak one more and if I look at the implied <unk> guide.
At the midpoint, it's at a pretty pretty decent growth acceleration.
Do we think the fourth quarter will represent kind of a more normalized pace of growth going forward.
And if so I'm just trying to get guidance for next year, but.
Is that something that you can think it continue.
Speaker 3: Well, I think Edison, as we've outlined in our revised outlook, we are expecting a very strong Q4 at the lower end of that guidance. We've secured the backlog to support that. And then we're anticipating...
Well I think Edison.
Allison as we've outlined in our revised outlook.
We are expecting a very strong Q4 at the lower end of that guidance we've secured.
The backlog too to support that and then we're anticipating.
Some additional <unk>.
Speaker 3: contracts that would contribute to
Contracts that would contribute to.
Speaker 3: I'll call non-subscription initial payments. And so,
Ill call non subscription initial payments.
And so.
But I think you'll also.
Speaker 7: see that we typically have had very strong Q3 and Q4 performance, and we're delivering on that. Thank you.
See that we typically have had very strong Q3 in Q3 Q4 performance.
And we're delivering on that.
Thank you.
And we will take our next question from Josh Sullivan with benchmark co.
Your line is open.
Hey, good morning.
Speaker 8: Morning, Josh. Morning, Josh. Um, just as far as CapEx, you know, being milestone-driven, anything we should note driving the milestone push out this quarter, you know, supply chain or anything else worth noting?
Good morning, guys good morning, Jeff.
Just as far as Capex, the milestone driven and anything we should note driving the milestone pushed out this quarter and our supply chain or anything else worth noting.
Speaker 3: No, Josh, I think building and launching satellites.
No Josh I think.
Building and launching satellites.
Speaker 3: You know, just has typical variability as you move through that process and that's being reflected in the timing of these milestone things.
Just has typical variability as you move through that process and that's being reflected in the timing of these milestone payments.
Speaker 8: 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?
Got it.
And then on the AI project, you mentioned tracking moving targets is that a is that a resource heavy commitment or is that a capability, where you can track a significant number of moving targets at one time.
Speaker 3: It's all fully automated through AI and gets processed in our scalable cloud platform Spectra and we're able to do...
It's all fully automated through AI and gets processed in our our scalable cloud platform spectra.
And we're able to do that.
Speaker 3: as part of our real-time capability in our platform, so it scales pretty significantly.
As part of our real time capability in our platform. So it scales it scales.
Pretty significantly across the world.
Speaker 8: And then just one last one, just on ESL. How was it ramped relative to your initial expectation?
Got it and then just one last one just on <unk>, how has it ramped relative to your initial expectations.
Speaker 3: 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 right on track with expectations.
It's right in line as Youll recall.
We're in year two.
And.
They originally funded two years of subscription and so we're right on track with expectations.
Speaker 3: The IOC milestone I'm integrating with the NREL's commercial imagery and data architecture was a very big milestone.
<unk>.
The IOC milestone on integrating with the <unk> commercial imagery and data architecture was a very big milestone.
Speaker 3: as that accelerates access.
As.
That accelerates access.
Speaker 7: to a much broader customer base within the U.S. government than 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.
To a much broader customer base within the U S government than 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.
Really important to the next phase of the program.
Great. Thank you for the time.
And we will take our next question from Joseph <unk> with Craig Hallum. Your line is open.
Speaker 8: Great, thanks, and congrats guys on the progress to EBITDA, real good incremental margins here. A 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...
Great. Thanks, and congrats guys on the progress due to EBITDA real good incremental margins here a couple of questions for me on the subscription component of the Big Ministry of Defense win.
Understanding that there's some variability there, but when does that the subscription part really start to layer in that that's my first question and the second was.
Speaker 8: 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? I don't know if you want to get precise guidance there, but at least a sense of the magnitude of it coming on imagery and software versus professional and engineering. It's great.
Q4 kind of back to the 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 thats 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 I know that you want to give precise guidance there, but at least a sense of the magnitude of it coming on imaging software versus professional and in generic thanks.
Speaker 3: Yeah, Jeff, I think the answer is related to both questions. We typically see...
Yes, Jeff I think the answer is related to both questions. We typically see.
Speaker 3: in the third and fourth quarter up tick.
In the third and fourth quarter.
Uptick.
Speaker 3: in imagery and analytics subscription revenue tied to certain contracts. So we're, to your question on our new Ministry of Defense contract or expansion of that, you know, that's driving incremental revenue.
Imagery and analytics subscription revenue tied to certain contracts. So we're.
To your question on our new Ministry of defense contract or expansion of there of that that's driving.
Incremental revenue.
Speaker 3: from that from imagery and analytics in the fourth quarter.
From that front <unk> analytics in the fourth quarter.
Speaker 3: And then a centriot outlined, you know, we're also seeing a strong contribution from professional services for some of the larger programs we want earlier in the year.
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.
Yeah.
Okay. Thank you.
And we'll take our next question from.
Greg.
With West Park capital Your line is open.
Speaker 8: 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?
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 are seeing any trends in other words timelines.
The kind of deliverables that customers are asking for.
Thanks.
Speaker 3: Yeah, good morning, Greg. Yeah, we're not seeing anything.
Yes, good morning, Greg.
Yes, we're not seeing anything.
Speaker 3: change relative to the
Change relative to.
The.
Speaker 3: with the kind of capability that customers are interested in getting from Black Sky.
With the kind of capabilities that customers are interested in getting from black sky.
<unk>.
The.
Speaker 3: As you recall, our high frequency monitoring and analytic capability is unique in the market.
As you'll recall, our high frequency monitoring and analytic capability is.
Unique in the market.
Speaker 3: and customers are looking to secure that capability, especially in a supply constrained market. So...
And customers are looking to secure that capability, especially in a supply constrained.
Market so.
We have been.
Speaker 3: highly focused on new customers, particularly in the international defense and intelligence sector, and those customers are buying our baseline set of services.
Highly focused on new customers, particularly in the international.
Fence and intelligence sector.
And.
Those customers are buying our baseline set of services.
Speaker 3: around the types of...
Around the types of.
<unk>.
Speaker 7: consistent price thing which is enabling us to drive the high margin element of our business. Thank you.
Consistent pricing, which is enabling us to drive this high margin element of our business.
Thank you.
Okay.
And once again to ask a question. Please press star one.
Speaker 1: We'll take our next question from Griffin Boss with B. Riley Securities.
Take our next question from Griffith boss with B Riley Securities. Your line is open.
Speaker 9: Hi, thank you for taking my questions, appreciate it. I just wanted to jump back to question that Edison asked earlier on the professional 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 us to continue ramping as a percentage of overall revenue?
Hi, Thank you for taking my questions I appreciate it I just wanted to jump back to the question that Edison asked earlier on the professional engineering services that strong 45% margin is really nice to see I'm. Just curious if you could elaborate on your expectations sort of going forward about the mix between <unk>.
Imagery and analytics and then professional engineering services do you expect this to continue ramping as a percentage of overall revenue.
Speaker 3: Thanks, Griffin. I think you know we're anticipating
Thanks, Griffin and I think we're anticipating.
Speaker 3: Fairly consistent mix, continuing growth in imagery and analytics, there'll always be some element of professional services as part of our business.
A fairly consistent mix.
Continuing growth in imagery and analytics that will always be some element of <unk>.
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 future type of services from from.
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.
The company so.
We're going to continue to grow the imagery element of the business, but there will always remain phenomenal.
We're going to continue to grow the imagery element of the business.
But there will always remains in our professional services.
got it okay great thanks thanks Brian and then uh... just jumping back to the critical integration milestone with the with the nro can can you elaborate at all more quantitatively sort of the value that that milestone unlocks above the you know seventy two million allocated the first two years or i guess i mean if you can't give you on that uh... win might you expect the npro to make an announcement for you know additional rounds of funding guaranteed funding
Got it okay, great. Thanks, Thanks, Brian and then just jumping back to the the critical integration milestone with the with the NRO.
Can you elaborate at all more quantitatively sort of the value that that milestone unlocks above the $72 million allocated the first two years I guess I mean, if you can't give a view on that on when.
Might you expect to make an announcement for additional rounds of funding guaranteed funding.
Well, as I mentioned, that was a significant milestone. And Black Sky was the first commercial.
Well as I mentioned that was a significant milestone.
And Black Sky was the first commercial.
provider to achieve that milestone and validate their new commercial provider architecture. What that means is...
Provider to achieve that milestone and validate their new <unk>.
Commercial provider architecture.
What that means is.
That streamlines.
the distribution of black sky imagery into US government systems.
The distribution of Black Sky 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. You know, we anticipate that in 2024, for the same reason, could provide any value and assistance or an attention point.
Which at the end of the day enables higher utilization.
Stronger demand.
And so.
We're excited about getting to that point.
We anticipate that.
In 2024.
we will be working with NRO on the next phase of the ELCL subscription.
We will.
Be working with MRO in the next phase of the <unk> subscription.
And then the last one for me if I could, do you disclose the average length of contract for represented under that $252 million backlog just trying to better understand sort of when that revenue is expected to be recognized?
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 when that revenue is expected to be recognized.
No, we don't disclose that, but you know what you're seeing is a number of multi-year agreements.
No, we don't disclose that but.
What youre seeing is a number of multi year agreements.
And.
and different agreements have various elements of the timing, but Henry do you want to add to that? Sure, and...
And different agreements have various elements of the timing, but Henry do you want to add to that sure.
Gretchen, when you see the queue that will file after a close of business today, there is a breakdown of how much of that 252 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. 2024 and the rest is 2025 and beyond.
Griffin when you see the Q that we'll file after close of business. Today. There is a breakdown of how much of that $2 52, we expect to receive this year, which is about $24 million and then we have the the remainder is kind of about $52 million of that is in 2025, 2024, and the rest of 2025 and beyond.
Got it, great, that's super helpful. Thanks again, appreciate it, congrats on the progress. Thanks.
Got it great that's super helpful.
Thanks again appreciate it congrats on the progress.
Okay.
And we will take our next question from Bob <unk> with quality analytics. Your line is open.
Fire, everyone, I dropped your question. Can the analysis of how much of these with syntax and fire this year? How has the time of experience evolved of BlackSci? And if there is any plan in motion for diversification on this slide, also can be chosen like on the nature of your relationship with fire for an advanced solution and how this project is.
Hi, everyone.
I talk to your question.
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How much of the switch from Maxim.
I'll ask Mcdonald's exclusive.
First of all Paul Black side.
Is there any plan in motion.
Now deduct any site.
Also wanted to shed some light on the nature of your intervention.
Riot format.
Zen conditions and houses.
Could you repeat the first part of your question, please? We're having a hard time hearing you.
Could you could you repeat the first part of your question. Please we're having a hard time hearing you.
Yeah, so it was about the announcement of the commission deals with CIMAX and SPIRE this year. So how has the commission space evolved for Black Sky? And is there any plan in motion for diversification on the commission front?
Yeah sure Bob announced in terms of the commercial needs with some Maxim via the CL.
So how has the foundation space evolve Black Sky.
Is that a new motion for diversification.
He comes from Scott.
Yeah, thank you. We are continuing to work with Spire.
Yes. Thank you.
We are continuing to work with spire.
We're seeing quite a bit of interest in the market for maritime domain awareness solutions. So combining SPIRE's capability to track ships with their constellation with our ability to... Thank you.
Sure.
We're seeing.
Quite a bit of interest in the market for maritime.
For maritime domain.
Awareness solutions.
So combining spires capability to to track shifts with air constellation with our ability to.
Provide high frequency monitoring.
is a significant value proposition. On the commercial side of that, we were working with Spire and other partners to bring that capability to market through different channels.
As a significant value proposition on the commercial side of that.
We are working with suppliers and other partners to bring that capability to market through different channels.
Okay, that's it. And my last question is actually about Gen Z launch. So has the reason it's light and only of pocket love any way affected the last guys Gen Z timeline or the extillery track?
Okay that helps.
And my last question is actually about Gen. Z launch so has really been on slides and I'll, let Neel Robert lab and will be affected the last go ahead Jan Kees timeline.
Or does it still on track.
Gen 3 remains on track as we've outlined.
Gen three remains on track as we've outlined.
We.
As we mentioned earlier, we signed a meeting agreement with RocketLab. We've had, RocketLab has been a very good partner with us, and we've been with them with events and things like this before. So we're confident they're going to get to root cause, and we don't see any impact to our launch plans next year. Okay.FFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFffFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFF pasa.
As we mentioned earlier, we signed a multiyear agreement with rocket lab.
Okay.
We are.
We've had <unk> has been a very good partner with us and we've been with them on.
With events and things like this before.
So we're confident they're going to get to root cause and we don't see any impact to our launch plans next year.
Okay.
Thank you so much Brian.
Thank you.
And at this time there are no further questions I will turn it back over to Ali linear Black Skies, Vice President of Investor Relations go ahead Ali.
I'll turn it back over to Alibanie Black Skies Vice President of Investor Relations. Go ahead out.
All right, I want to thank everybody for joining us on the call this morning. We will be participating in several upcoming investor conferences over the next several weeks. And we hope to see you at one of these. We look forward to speaking to you again soon. Have a great day.
Alright, I want to thank everybody for joining us on the call. This morning, we will be participating in several upcoming investor conferences over the next several weeks and we hope to see you at one of these we look forward to speaking to you again soon have a great day.
That concludes today's teleconference. Thank you for your participation. You may now disconnect.
That concludes today's teleconference. Thank you for your participation you may now disconnect.
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