· by The Reader
BKSY memo (neutral 57), Oct 4, 2026
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Summary
BlackSky is executing: Q2 2026 revenue of $33.3 million was up 50 percent year over year with positive adjusted EBITDA of $4.7 million, per the August 6 earnings release. The offset is that only $72.6 million of the $378.1 million backlog disclosed in the Q2 10-Q is scheduled to convert in fiscal 2027, below this year's revenue run rate, so the growth path past 2026 depends on orders not yet signed.
Variant view
The market treats BKSY as a defense AI constellation story where Gen-3 capacity plus a widening international pipeline justifies paying ahead of the numbers. I do not disagree with the operating trend, which the filings support, but the backlog timing table in the Q2 10-Q shows the contracted revenue for 2027 is thinner than 2026, and the September consortium announcement is a naming with details deferred, not a booked contract. That is a wait, not a short.
Evidence
Q2 2026 results, Exhibit 99.1 to the August 6 8-K: total revenue $33.3 million versus $22.2 million a year earlier, record space-based intelligence and AI services revenue of $25 million, cost of sales 27 percent of revenue, and adjusted EBITDA of $4.7 million, a 14.2 percent margin. Net loss was $20.8 million, improved from $41.2 million, but the release attributes most of that swing to derivative fair value moves, not operations.
The same release reaffirms full year 2026 revenue of $130 million to $150 million, adjusted EBITDA of $12 million to $24 million, and capex of $50 million to $60 million. The guidance band is wide this late in the year, which tells you how much rides on second half deliveries.
The Q2 10-Q reports backlog of $378.1 million as of June 30, 2026, split as $76.2 million recognizable in the final six months of 2026, $72.6 million in fiscal 2027, and $229.3 million thereafter. Near term coverage is adequate. The 2027 figure is the number to watch, because it sits below the 2026 guidance midpoint and the back weighting depends on long dated Mission Solutions work.
Balance sheet from the 10-Q: cash, restricted cash and short-term investments of $244.1 million at June 30, against total long-term debt of $217.2 million. Satellite work in process rose to $95.6 million from $80.7 million at year end. The cash came partly from issuing 3.6 million shares for $150 million under the at-the-market program during the quarter, a reminder that constellation buildout is funded by equity.
The September 9, 2026 company release names BlackSky the exclusive provider of very high resolution electro-optical satellites for a 50 satellite consortium constellation backed by a stated $1 billion investment involving Marlan Space, Loft Orbital and Mistral AI. The release says further details are expected later this year. No contract value or timing is disclosed, so it does not yet appear in backlog.
Two housekeeping items worth noting. The August 13 8-K discloses the NYSE suspended and moved to delist the warrants, which expired in September, for abnormally low price under Section 802.01D; common stock listing is unaffected. The September 14 8-K shows the advisory vote on executive compensation passed with 8,958,374 for and 6,935,903 against, and director nominee Susan Gordon received 3,301,403 for against 12,720,684 withheld. That is unusual dissent for a company reporting improving results.
Bear case
The equity is funding the constellation, not the operations. The quarter's $150 million ATM raise added 3.6 million shares while capex guidance runs to $60 million and satellite work in process keeps climbing, so adjusted EBITDA of $4.7 million does not translate into free cash. Debt of $217 million sits against a business doing roughly $140 million of annual revenue. If Gen-3 adoption slows or an international program slips, the 2027 backlog of $72.6 million implies a revenue step down, and the next funding round would come at a lower price. The stock is down 17 percent over a year and trades far below the 52 week high of $51.63, which suggests the market has already started discounting execution risk.
What would change my mind
Bullish if the Q3 or Q4 filing shows backlog scheduled for fiscal 2027 rising above the 2026 revenue run rate, particularly from a definitive contract tied to the Marlan Space and Loft Orbital consortium. Bearish if the company trims the $130 million to $150 million revenue guidance or returns to the ATM for a further large raise while adjusted EBITDA stays below the low end of $12 million.
Market data as of the close on . Prices are end of day, not live.
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