BlackSky Technology Inc.

Previous wording

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 Quarterly Report on Form 10-Q. 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 of our Annual Report on Form 10-K for the year ended December 31, 2025 and filed with the Securities and Exchange Commission (the “SEC”). 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.

Current wording

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 Quarterly Report on Form 10-Q. 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 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 and filed with the Securities and Exchange Commission (the “SEC”). 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.

Previous wording

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 supports national security, supply chain resilience, economic intelligence, and other critical decision-making requirements for customers worldwide.

Current wording

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 integrate 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 supports national security, supply chain resilience, economic intelligence, and other critical decision-making requirements for customers worldwide.

Previous wording

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.

Current wording

Our revenue is generated by selling space-based intelligence & AI services, primarily through our BlackSky Spectra software platform, and by providing mission solutions and advanced technology programs to strategic customers on a project basis. Due to shifting geopolitical realities, international defense spending has grown faster than U.S. spending in recent periods, with a significant emphasis on development of national space capabilities. For the six months ended June 30, 2026, revenue generated from international customers accounted for 60% of our total revenue, as opposed to 48% for the six months ended June 30, 2025.

Previous wording

•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.

Current wording

•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 (five 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.

Previous wording

•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 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.

Current wording

•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 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 space-based intelligence and AI services or advanced technology programs 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.

Previous wording

Results of Operations for the Three Months Ended March 31, 2026 and 2025

Current wording

Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025

Previous wording

Effective January 1, 2025, we reclassified our captions on the unaudited condensed 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 three months ended March 31, 2025, the amounts presented have been reclassified to conform to the current presentation for three months ended March 31, 2026.

Current wording

Effective January 1, 2025, we reclassified our captions on the unaudited condensed 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 three and six months ended June 30, 2025, the amounts presented have been reclassified to conform to the current presentation for the three and six months ended June 30, 2026.

Previous wording

The following table provides the components of results of operations for the three months ended March 31, 2026 and 2025:

Current wording

The following table provides the components of results of operations for the three and six months ended June 30, 2026 and 2025:

Previous wording

Mission solutions revenue decreased for the three months ended March 31, 2026 compared to the same period in 2025, primarily reflecting one-time work in process costs recognized in the first quarter of 2025 on a customized Earth observation satellite for a then-new customer, which did not recur in 2026. The decrease was partially offset by revenue recognized on certain long-term contracts that are in various stages of completion.

Current wording

Mission solutions revenue decreased for the six months ended June 30, 2026 compared to the same period in 2025, reflecting one-time work in process costs recognized in the first quarter of 2025 on a customized Earth observation satellite for a then-new customer, which did not recur in 2026. These decreases were partially offset by the increases in the second quarter of 2026 mentioned above.

Previous wording

Space-based intelligence & AI services revenue was relatively flat for the three months ended March 31, 2026 as compared to the same period in 2025.

Current wording

Advanced technology programs revenue increased for the three months ended June 30, 2026 as compared to the same period in 2025, largely due to revenue generated from several new contracts in the second quarter of 2026; this increase was partially offset by the completion of services performed on certain contracts in early 2026. Advanced technology programs revenue was relatively flat for the six months ended June 30, 2026 as compared to the same period in 2025.

Previous wording

Space-based intelligence & AI services costs, excluding depreciation and amortization, increased for the three months ended March 31, 2026 as compared to the same period in 2025, driven by increased capacity demand from recent global events, which also caused an increase in direct labor fulfillment costs on new and existing long-term contracts.

Current wording

Space-based intelligence & AI services costs, excluding depreciation and amortization, increased for the three and six months ended June 30, 2026 as compared to the same periods in 2025, driven by increased labor fulfillment and direct material costs on new and existing long-term contracts driven by an increase in demand of space-based intelligence and AI services.

Previous wording

Mission solutions costs, excluding depreciation and amortization, decreased for the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to the impact of incurred work in process costs under a satellite procurement contract that began in 2025.

Current wording

Mission solutions costs, excluding depreciation and amortization, increased for the three months ended June 30, 2026 as compared to the same period in 2025, reflecting an increase in the rate of performance on two mission solutions programs, one of which began in the fourth quarter of 2025. Mission solutions costs, excluding depreciation and amortization, decreased for the six months ended June 30, 2026 as compared to the same period in 2025, largely due to the impact of incurred work in process costs under a satellite procurement contract in the first quarter of 2025.

Previous wording

Advanced technology programs costs, excluding depreciation and amortization, decreased for the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to a decrease in direct labor fulfillment costs caused by the timing of completion of design and implementation services performed in 2025. These decreases were partially offset by costs to provide advanced research and development services to an existing customer to develop next-generation space-based intelligence capabilities.

Current wording

Advanced technology programs costs, excluding depreciation and amortization, decreased for the three and six months ended June 30, 2026 as compared to the same periods in 2025, mainly due to a decrease in direct labor fulfillment costs caused by the timing of services performed on a number of new and existing contracts.

Previous wording

Selling, general, and administrative expenses increased during the three months ended March 31, 2026 as compared to the same period in 2025, primarily related to an increase in stock-based compensation expense resulting from an increase in the average stock price at the time of the grant of new stock awards in 2026. In addition, selling and marketing expenses increased related to the cost of international sales consultants as we continue to invest in international sales initiatives. These increases were partially offset by decreases in professional fees 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.

Current wording

Selling, general, and administrative expenses increased during the three and six months ended June 30, 2026 as compared to the same periods in 2025, primarily due to an increase in stock-based compensation expense driven by an increase in the average stock price at the time of the grant of new stock awards in 2026. In addition, selling and marketing expenses increased due to our increased utilization of sales consultants as we continue to invest in international sales initiatives. Information technology and other administrative expenses increased as a result of additional procurement of company-wide software solutions. These various increases were partially offset by lower salaries and benefits costs as selling and marketing headcount decreased and we experienced increased labor utilization in customer programs. For the six months ended June 30, 2026, selling, general, and administrative expenses were also impacted by decreases in professional fees as a result of one-time transaction costs and accounting fees incurred during the first quarter of 2025 that were associated with finalizing the BlackSky Satellite Systems acquisition that closed in late 2024.

Previous wording

The following is our forecast for total restricted stock units ("RSUs") non-cash stock-based compensation expense as of March 31, 2026, which excludes certain executive RSUs that were forfeited after March 31, 2026 but before the filing date. In addition to the amounts recognized in selling, general, and administrative expenses, this includes the portion that will be capitalized or classified in space-based intelligence & AI services, mission solutions, or advanced technology programs costs:

Current wording

The following is our forecast for total restricted stock units ("RSUs") non-cash stock-based compensation expense as of June 30, 2026, which, in addition to the amounts recognized in selling, general, and administrative expenses, this includes the portion that will be capitalized or classified in space-based intelligence & AI services, mission solutions, or advanced technology programs costs:

Previous wording

Depreciation expense from satellites increased for the three months ended March 31, 2026 as compared to the same period in 2025 related to the launch of our Gen-3 satellites throughout 2025 and during the first quarter of 2026. This was partially offset by a decrease in depreciation expense related to Gen-2 satellites becoming fully depreciated in 2025.

Current wording

Depreciation expense from satellites decreased for the three months ended June 30, 2026, as compared to the same period in 2025, since 2025 depreciation expense included both Gen-2 and Gen-3 satellites, whereas depreciation expense in the second quarter of 2026 only included Gen-3 satellites; our Gen-2 satellites became fully depreciated during the first quarter of 2026. Depreciation expense from satellites increased for the six months ended June 30, 2026, as compared to the same period in 2025, as a result of the launch of our Gen-3 satellites throughout 2025 and during the first quarter of 2026; this increase in depreciation expense was partially offset by the decline in our depreciation expense on our Gen-2 satellites, which became fully depreciated in the first quarter of 2026.

Previous wording

Depreciation expense from all other property and equipment increased for the three months ended March 31, 2026 as compared to the same period in 2025. 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.

Current wording

Depreciation expense from all other property and equipment increased for the three and six months ended June 30, 2026 as compared to the same periods in 2025. 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.

Previous wording

Amortization expense increased for the three months ended March 31, 2026 as compared to the same period in 2025 due to the change in the estimated useful life of an intangible asset during the fourth quarter of 2025.

Current wording

Amortization expense increased for the three and six months ended June 30, 2026 as compared to the same periods in 2025 due to the change in the estimated useful life of an intangible asset during the fourth quarter of 2025.

Previous wording

Our common stock price significantly drives fluctuations in our equity warrants and other equity instruments that we classify as derivative liabilities in our unaudited condensed 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. These re-measurements of derivative liabilities generated a loss for the three months ended March 31, 2026 and a gain for the three months ended March 31, 2025.

Current wording

Our common stock price significantly drives fluctuations in our equity warrants and other equity instruments that we classify as derivative liabilities in our unaudited condensed 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.

Previous wording

Interest income increased during the three months ended March 31, 2026 as a result of higher short-term investment balances during the period as compared to the same period in 2025.

Current wording

Interest income increased during the three and six months ended June 30, 2026 as a result of higher short-term investment balances during the period as compared to the same periods in 2025.

Previous wording

Interest expense increased during the three months ended March 31, 2026, as compared to the same period in 2025 because our outstanding debt increased from $116.5 million as of March 31, 2025 to $209.2 million as of March 31, 2026. In July 2025, we lowered 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%.

Current wording

Interest expense increased during the three and six months ended June 30, 2026, as compared to the same periods in 2025 because our outstanding debt increased from $123.5 million as of June 30, 2025 to $217.2 million as of June 30, 2026. In July 2025, we lowered 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%.

Previous wording

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 or 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.

Current wording

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 or 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. In addition, we believe that Adjusted EBITDA provides additional information for investors to use in evaluating our 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.

Previous wording

The table below reconciles our net loss to Adjusted EBITDA for the three months ended March 31, 2026 and 2025:

Current wording

The table below reconciles our net loss to Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025:

Previous wording

As of March 31, 2026, our existing sources of liquidity included cash and cash equivalents and short-term investments. Our cash and cash equivalents excluding restricted cash totaled $39.4 million and $42.4 million as of March 31, 2026 and December 31, 2025, respectively, and our short-term investments totaled $76.1 million and $82.0 million as of March 31, 2026 and December 31, 2025, respectively. We have incurred year to date losses and generated negative cash flows from operations since our inception in September 2014. As of March 31, 2026, we had an accumulated deficit of $756.1 million.

Current wording

As of June 30, 2026, our existing sources of liquidity included cash and cash equivalents and short-term investments. Our cash and cash equivalents excluding restricted cash totaled $36.9 million and $42.4 million as of June 30, 2026 and December 31, 2025, respectively, and our short-term investments totaled $197.3 million and $82.0 million as of June 30, 2026 and December 31, 2025, respectively. We have incurred year to date losses and generated negative cash flows from operations since our inception in September 2014. As of June 30, 2026, we had an accumulated deficit of $776.9 million.

Previous wording

Our short-term liquidity as of March 31, 2026 was $117.5 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.

Current wording

Our short-term liquidity as of June 30, 2026 was $244.1 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.

Previous wording

We entered into vendor financing agreements for $57.6 million 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. During the three months ended March 31, 2026, we incurred $3.0 million of additional debt related to the satellite launch vendor financing agreements. As of March 31, 2026, we have $28.9 million of additional vendor financing available to us for future launches. For additional information regarding the Convertible Senior Notes and vendor financing agreements, see Note 11 – “Debt and Other Financing” included in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements” of this Quarterly Report on Form 10-Q.

Current wording

We entered into vendor financing agreements for $57.6 million 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. During the six months ended June 30, 2026, we incurred $13.2 million of additional debt related to the satellite launch vendor financing agreements. As of June 30, 2026, we have $18.7 million of additional vendor financing available to us for future launches. For additional information regarding the Convertible Senior Notes and vendor financing agreements, see Note 11 – “Debt and Other Financing” included in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements” of this Quarterly Report on Form 10-Q.

Previous wording

During the three months ended March 31, 2026, we issued and sold shares of our Class A common stock under our ATM sales agreement, resulting in gross proceeds of $15.0 million. We have the ability to offer and sell up to $100.0 million of 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.

Current wording

On May 22, 2026, we entered into a new ATM sales agreement with Deutsche Bank Securities Inc. and Craig-Hallum Capital Group LLC as our sales agents (the “2026 ATM Agreement”), under which we may offer and sell from time to time up to $250.0 million of shares of our Class A common stock in negotiated transactions or transactions that are deemed to be an ATM offering. During the six months ended June 30, 2026, we issued and sold shares of our Class A common stock under our 2026 ATM Agreement, resulting in net proceeds of $63.1 million.

Previous wording

We had $24.2 million and $28.6 million of current contract assets as of March 31, 2026 and December 31, 2025, 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.

Current wording

As of June 30, 2026 and December 31, 2025, we had recorded $26.0 million and $28.6 million of current contract assets, 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.

Previous wording

As of March 31, 2026, our current assets were $185.3 million, consisting primarily of short-term investments, cash and cash equivalents, accounts receivable, and contract assets.

Current wording

As of June 30, 2026, our current assets were $309.8 million, consisting primarily of short-term investments, cash and cash equivalents, accounts receivable, and contract assets. Our current assets also include $10.0 million of restricted cash, of which $9.5 million was held primarily in term deposits that served as compensating balances for letters of credit required under contracts with certain customers.

Previous wording

As of March 31, 2026, our current liabilities were $53.6 million, consisting primarily of contract liabilities, accounts payable and accrued liabilities, and other current liabilities, which includes a $7.5 million liability expected to be offset by an insurance recovery of $7.4 million. Accordingly, we have sufficient cash and working capital to fund our short-term liquidity requirements.

Current wording

As of June 30, 2026, our current liabilities were $53.1 million, consisting primarily of contract liabilities, accounts payable and accrued liabilities, and the current portion of debt. Accordingly, we have sufficient cash and working capital to fund our short-term liquidity requirements.

Previous wording

The following table provides a summary of cash flow data for the three months ended March 31, 2026 and 2025. Our short-term liquidity at March 31, 2026 was $117.5 million. Short-term investments of $76.1 million are not classified as cash, cash equivalents, or restricted cash.

Current wording

The following table provides a summary of cash flow data for the six months ended June 30, 2026 and 2025. Our short-term liquidity at June 30, 2026 was $244.1 million. Short-term investments of $197.3 million are not classified as cash, cash equivalents, or restricted cash.

Previous wording

For the three months ended March 31, 2026, net cash used in operating activities was $2.4 million, which is a decrease as compared to the same period in 2025. The decrease in net cash used in operating activities was largely related to a change in working capital in the first quarter of 2025 when we received a cash payment for capacity for future purchase orders and recorded it as deferred revenue in our unaudited condensed consolidated balance sheets. This decrease was partially offset by an increase in cash collected from interim milestone billings on a few major customer contracts during the three months ended March 31, 2026.

Current wording

For the six months ended June 30, 2026, net cash used in operating activities was $5.9 million, which is a decrease as compared to the same period in 2025. The decrease in net cash used in operating activities was largely related to a change in working capital in the first quarter of 2025 when we received a cash payment for capacity for future purchase orders and recorded it as deferred revenue in our unaudited condensed consolidated balance sheets. This decrease was partially offset by an increase in cash collected from interim milestone billings on a few major customer contracts during the six months ended June 30, 2026.

Previous wording

The change in net cash used in investing activities was primarily due to increased net proceeds from short-term investments in government securities of $6.4 million during the three months ended March 31, 2026 as compared to $15.3 million of net purchases during the three months ended March 31, 2025.

Current wording

The change in net cash used in investing activities was primarily due to increased net purchases of short-term investments in government securities of $113.7 million during the six months ended June 30, 2026 as compared to $31.0 million of net purchases during the six months ended June 30, 2025.

Previous wording

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. The total amount paid for capital expenditures increased during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 primarily due to an increase in cash paid to procure direct materials and build our Gen-3 satellites, as well as for cash paid for launch insurance. We expect cash outflows for satellite production to increase as we continue to build out our satellite constellation.

Current wording

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. The total amount paid for capital expenditures increased during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 primarily due to an increase in cash paid to procure direct materials as well as to build and launch our Gen-3 satellites. We expect cash outflows for satellite production to increase as we continue to build out our satellite constellation.

Previous wording

We received $14.3 million in net cash proceeds from our equity issuances during the three months ended March 31, 2026 as compared to $5.1 million in net proceeds during the three months ended March 31, 2025. Our equity issuances during the three months ended March 31, 2026 consisted of the sale of 0.6 million shares of our Class A common stock under the 2025 ATM Agreement, which resulted in $15.0 million in gross proceeds. In comparison, for the three months ended March 31, 2025, we sold 0.6 million shares of our Class A common stock under our 2022 ATM Agreement, which resulted in $5.4 million in gross proceeds. The increase in gross proceeds was the result of an increase in our average stock price during three months ended March 31, 2026 as compared to the same period in 2025.

Current wording

We received $160.2 million in net cash proceeds from our equity issuances during the six months ended June 30, 2026 as compared to $40.9 million in net proceeds during the six months ended June 30, 2025. Our equity issuances during the six months ended June 30, 2026 consisted of the sale of 4.2 million shares of our Class A common stock under the 2026 and 2025 ATM Agreements, which resulted in $165.0 million in gross proceeds. In comparison, for the six months ended June 30, 2025, we sold 3.7 million shares of our Class A common stock under our 2022 ATM Agreement, which resulted in $42.5 million in gross proceeds. The increase in gross proceeds was the result of an increase in our average stock price during the six months ended June 30, 2026 as compared to the same period in 2025.

Previous wording

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.

Current wording

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 not had any 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.

Previous wording

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 unaudited condensed consolidated balance sheets as of March 31, 2026 and 2025. Although some of the warrants have expiration dates within one year of March 31, 2026, 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) gain on derivatives in our unaudited condensed 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.

Current wording

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 unaudited condensed consolidated balance sheets as of June 30, 2026 and 2025. Although some of the warrants have expiration dates within one year of June 30, 2026, 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 unaudited condensed 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.

Previous wording

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.

Current wording

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 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.