BKSY

MKT CAP $710MP/E —DIV YIELD —FCF YIELD —REV TTM $108.9M +4.1%NET INCOME −$66.7MNET DEBT $173.9M52W 13.14 – 51.63SEC XBRL · TTM TO Invalid Date

How BKSY rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

77%

of sentences unchanged

Added

137

new sentences

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sentences removed

Length

+1,679

words, now 29,757

New in FY2025

Although our revenue increased in 2024 and 2025, there can be no assurances that revenue will continue to grow or do so at current rates, and you should not rely on the revenue of any prior quarterly or annual period as an indication of our future performance.
Our revenue growth rate has declined in the past and may decline in future periods.
Many factors may contribute to declines in our revenue growth rate, including increased competition, slowing demand for our products and services from existing and new customers, increased regulatory burdens domestically or abroad, a failure by us to continue capitalizing on growth opportunities, terminations of existing contracts by our customers, and the maturation of our business, among other factors.
Other factors that may cause fluctuations in our quarterly results of operations and financial position include, without limitation, those listed below: • termination of one or more large contracts by customers, including for convenience; • the image capacity that is able to be supported by our satellite constellation; • the cost or availability of raw materials or supplied components for the manufacture, operation, or potential sale of our satellites; • satellite or geospatial data and analytics platform failures that reduce the planned network size below projected levels, which result in contract delays or cancellations; • the timing and cost of, and level of investment in, research and development relating to our technologies; • changes in the competitive dynamics of our industry; • prolonged periods of unexpected weather patterns, natural disasters, or other events that can impact image quality or force a cancellation or rescheduling of satellite launches; and • general economic, regulatory, and market conditions, such as disruptions in the supply chain due to geopolitical uncertainty and instability.
In fiscal years 2025 and 2024, we had four and three customers respectively, that each accounted for more than 10% of our total revenue.
In the aggregate, these customers accounted for 89% and 88% of our total revenue, respectively.
Customers in the defense market generally purchase our services in connection with government programs that have a limited duration and are subject to government funding delays or shutdowns, leading to fluctuating sales to any particular customer in this market from year to year.
Our contract terms with our customers vary in length and may require the customer to opt-in to extend the term.
Our customers have no obligation to renew, upgrade, or expand their contracts with us after the terms of their existing contracts have expired.
In addition, many of our customer contracts permit the customer to terminate their contracts with us with notice periods of varying lengths, and our contracts with U.S. government customers may be terminated for convenience.
If one or more of our customers terminate their contracts with us, whether for convenience, for default in the event of a breach by us, or for other reasons specified in our contracts, as applicable; if our customers elect not to renew their contracts with us; if our customers renew their contractual arrangements with us for shorter contract lengths; or if our customers otherwise seek to renegotiate terms of their existing contracts on terms less favorable to us, our business, financial condition, and results of operations could be adversely affected.
Our future success also depends on the successful execution of our strategy to increase our sales to existing customers, identify and engage new customers, and enter new U.S. and non-U.S. markets.
This strategy will depend, among other things, on our ability to successfully build and expand our sales organization and operations.
If we are unable to attract, hire, develop, retain, and motivate qualified sales personnel, or if our new sales personnel are unable to achieve sufficient sales productivity levels in a reasonable period of time or at all, our sales may grow more slowly than expected or materially decline.
Additionally, if our marketing programs are not effective or if we are unable to effectively build, expand, retain, and manage our sales organization and operations, our sales and revenue may grow more slowly than expected or materially decline, and our business may be significantly harmed.
Furthermore, the presentation of our financial results requires us to make estimates and assumptions that may affect revenue recognition, which estimates and assumptions can be particularly challenging in new areas, such as our nascent Mission Solutions offering.
Our competitors or potential competitors could, in the future, offer satellite-based imagery or other products and services, such as mission solutions, with more attractive features than those of our products and services.
If competitors develop and launch or sell satellites or other imagery-content sources with more advanced or sophisticated capabilities and technologies than ours, or offer products and services at lower prices than ours, our business and results of operations could be harmed.
In addition, such governments could rely on, sell, or provide Earth imagery free of charge from their satellites and thereby compete with our products and services.
As of December 31, 2025, we had an accumulated deficit of $726.4 million.
Our customers and partners (including our supply chain, software and data providers, and service providers) face similar threats.
However, cybersecurity threats can come from a variety of sources, such as an individual hacker, state-sponsored attackers, or malfeasance or unintentional errors by employees, consultants, or other service providers, and even technical errors or vulnerabilities.
Over the past several years, cyber-attacks have become more prevalent and much harder to detect and defend against, and an increased level of sophistication and expertise of hackers (including through the malicious use of artificial intelligence technology) may increase the risks of cybersecurity incidents.
For example, we or our partners may use artificial intelligence technology which causes increased risks of unauthorized or unintended disclosure of our confidential information, or which makes it easier for malicious actors to exfiltrate such information.
Unauthorized parties may also attempt to gain access to our systems or facilities through fraud, trickery, social engineering, or other forms of deceiving our employees, contractors, and temporary staff.
If any of these third-party services experience errors, disruptions, security issues, or other performance deficiencies; become incompatible due to updates; fail or become unavailable due to extended outages, interruptions, defects, or are no longer available on commercially reasonable terms or prices (or at all), these issues could result in errors or defects in the delivery of our products and services that include the development, integration, and operations of satellite and ground systems.
Consequently, our revenue and margins could decline, our reputation and brand could be damaged, we could be exposed to legal or contractual liability, our expenses could increase, our ability to manage our operations could be interrupted, and our processes for managing our sales and servicing our customers could be impaired until equivalent services or technology, if available, are identified, procured, and implemented, all of which may take significant time and resources, increase our costs, and adversely affect our business.
We have derived, and we expect to continue to derive, a substantial portion of our revenue from providing products and services that are based upon today’s leading technologies and that are capable of adapting to future technologies, including artificial intelligence (“AI”) and machine learning (“ML”).
For example, we expect to continue to invest in AI and ML to develop and enhance our offerings and technologies.
There are significant risks involved in deploying AI, and there can be no assurance that using AI in our products will be beneficial to our business.
Also, due to the design complexity of our products, we may, in the future, experience delays in completing the development and introduction of new products.
There is no assurance that our investments in product development and enhancements, including through our use of AI, will be compelling to our customers, gain market acceptance, or have a material positive impact on our business, financial condition, or results of operations.
While we currently maintain insurance to cover certain risks and liabilities related to our business, we may not elect to or be able to maintain launch or in-orbit insurance coverage for our satellites to address the risk of potential systemic anomalies, failures, collisions with our satellites or other satellites or debris, casualty associated with impacts from satellite reentry, or catastrophic events affecting the existing satellite system.
Datasets used to train AI models may be insufficient, of poor quality, or contain biased information.
AI-generated outputs may include inaccurate, incomplete, inappropriate, biased, or otherwise harmful content.
If our AI-integrated products produce harmful content or fail to perform in an accurate, safe, or ethical manner, or if our customers misuse AI-integrated products, whether by incorporating them into high-risk or controversial applications or otherwise, we could face reputational harm and customer dissatisfaction.
AI has also been and may continue to be leveraged by third parties to generate malicious code, conduct cyberattacks, create disinformation, and engage in fraud.
If third parties leverage AI for such activities targeting us or our customers, we could face significant harm.
Inappropriate or controversial data practices by engineers and end-users of our systems, or perceived or actual cybersecurity risks associated with AI, could impair the acceptance of AI solutions and the use of our products.
There is significant uncertainty and disagreement about ethical norms and standards for AI systems, which may expose us to criticism from stakeholders, customers, employees, or the public.

and 97 more.

Gone since FY2024

Although our revenue increased in 2023 and 2024, there can be no assurances that revenue will continue to grow or do so at current rates, and you should not rely on the revenue of any prior quarterly or annual period as an indication of our future performance.
Our revenue growth rate may decline in future periods.
Many factors may contribute to declines in our revenue growth rate, including increased competition, slowing demand for our products and services from existing and new customers, increased regulatory burdens domestically or abroad, a failure by us to continue capitalizing on growth opportunities, terminations of existing contracts by our customers, and the maturation of our business, among others.
Other factors that may cause fluctuations in our quarterly results of operations and financial position include, without limitation, those listed below: • termination of one or more large contracts by customers, including for convenience; • the image capacity that is able to be supported by our satellite constellation; • the cost of raw materials or supplied components for the manufacture and operation of our satellites; • satellite or geospatial data and analytics platform failures that reduce the planned network size below projected levels, which result in contract delays or cancellations; • the timing and cost of, and level of investment in, research and development relating to our technologies; • changes in the competitive dynamics of our industry; • prolonged periods of unexpected weather patterns, natural disasters or other events that can impact image quality or force a cancellation or rescheduling of satellite launches; and • general economic, regulatory, and market conditions, such as disruptions in the supply chain due to geopolitical uncertainty and instability.
In fiscal years 2024 and 2023, we had three customers that each accounted for more than 10% of our total revenue and in the aggregate, accounted for 88% and 88% of our total revenue, respectively.
Customers in the defense market generally purchase our services in connection with government programs that have a limited duration, leading to fluctuating sales to any particular customer in this market from year to year.
Our contract terms with our customers and resellers vary in length and may require the customer or reseller to opt-in to extend the term.
Our customers and resellers have no obligation to renew, upgrade, or expand their contracts with us after the terms of their existing contracts have expired.
In addition, many of our customer and reseller contracts permit the customer or reseller to terminate their contracts with us with notice periods of varying lengths, and our contracts with U.S. government customers may be terminated for convenience.
If one or more of our customers or resellers terminate their contracts with us, whether for convenience, for default in the event of a breach by us, or for other reasons specified in our contracts, as applicable; if our customers or resellers elect not to renew their contracts with us; if our customers or resellers renew their contractual arrangements with us for shorter contract lengths; or if our customers or resellers otherwise seek to renegotiate terms of their existing contracts on terms less favorable to us, our business, financial condition, and results of operations could be adversely affected.
Our future success also depends on the successful execution of our strategy to increase our sales to existing customers, identify and engage new customers, and enter new U.S. and non-U.S. markets, which strategy will depend, among other things, on our ability to successfully build and expand our sales organization and operations.
If we are unable to attract, hire, develop, retain, and motivate qualified sales personnel, if our new sales personnel are unable to achieve sufficient sales productivity levels in a reasonable period of time or at all, if our marketing programs are not effective or if we are unable to effectively build, expand, retain, and manage our sales organization and operations, our sales and revenue may grow more slowly than expected or materially decline, and our business may be significantly harmed.
Furthermore, the presentation of our financial results requires us to make estimates and assumptions that may affect revenue recognition.
Our competitors or potential competitors could, in the future, offer satellite-based imagery or other products and services with more attractive features than those of our products and services.
If competitors develop and launch satellites or other imagery-content sources with more advanced or sophisticated capabilities and technologies than ours, or offer products and services at lower prices than ours, our business and results of operations could be harmed.
In addition, such governments could sell or provide free of charge Earth imagery from their satellites and thereby compete with our products and services.
As of December 31, 2024, we had an accumulated deficit of $656.2 million.
Our customers and partners (including our supply chain, software and data providers, joint ventures and service providers) face similar threats.
However, cybersecurity threats can come from a variety of sources, such as an individual hacker, state-sponsored attackers, or malfeasance or even unintentional errors by employees, consultants or other service providers.
Over the past several years, cyber-attacks have become more prevalent and much harder to detect and defend against.
Unauthorized parties may also attempt to gain access to our systems or facilities through fraud, trickery or other forms of deceiving our employees, contractors and temporary staff.
If any of these third-party services experience errors, disruptions, security issues, or other performance deficiencies, if they are updated such that they become incompatible, if these services, software, or hardware fail or become unavailable due to extended outages, interruptions, defects, or otherwise, or if they are no longer available on commercially reasonable terms or prices (or at all), these issues could result in errors or defects in the delivery of our products and services that include the development, integration, and operations of satellite and ground systems, our revenue and margins could decline, our reputation and brand could be damaged, we could be exposed to legal or contractual liability, our expenses could increase, our ability to manage our operations could be interrupted, and our processes for managing our sales and servicing our customers could be impaired until equivalent services or technology, if available, are identified, procured, and implemented, all of which may take significant time and resources, increase our costs, and adversely affect our business.
We have derived, and we expect to continue to derive, a substantial portion of our revenue from providing products and services that are based upon today’s leading technologies and that are capable of adapting to future technologies.
Due to the design complexity of our products, we may, in the future, experience delays in completing the development and introduction of new products.
While we maintain insurance to cover certain risks and liabilities related to our business, we have not historically obtained and may not maintain launch or in-orbit insurance coverage for our satellites to address the risk of potential systemic anomalies, failures, collisions with our satellites or other satellites or debris, casualty associated with impacts from satellite reentry, or catastrophic events affecting the existing satellite system.
Datasets may be insufficient, of poor quality, or contain biased information.
Inappropriate or controversial data practices by engineers and end-users of our systems could impair the acceptance of AI solutions and the use of our products.
Despite testing, our BlackSky Spectra platform and products may contain defects and errors, or experience performance problems when first introduced, when new versions or enhancements are released, or even after these products have been used by our customers for a period of time.
In addition, increased development costs could be substantial and could reduce our operating margins.
The occurrence of software errors or errors in data, whether or not caused by our products and services, could result in malfunctions, service interruptions, or other adverse consequences and could delay or reduce market acceptance of our products and services and have an adverse effect on our business and financial performance, and any necessary revisions may cause us to incur significant expenses.
We have in the past changed, and expect that we may need to, in the future, change our pricing model from time to time, including as a result of competition, global economic conditions, reductions in our customers’ spending levels generally, changes in product mix, pricing studies or changes in how information technology infrastructure is broadly consumed.
As of December 31, 2024, we had an estimated $62.9 million of tax-effected U.S. federal net operating loss carryforwards available to reduce future taxable income.
Under legislative changes made in December 2017, U.S. federal net operating losses incurred in 2018 and in future years may be carried forward indefinitely, but, for taxable years beginning after 2020, the deductibility of such net operating losses is limited to 80% of taxable income.
Further, changes in government policies, priorities, regulations, use of other commercial data providers to meet U.S. government imagery needs, government agency mandates, funding levels through agency budget reductions, the imposition of budgetary constraints or a decline in government support or deferment of funding for programs in which we or our customers participate could result in contract terminations, delays in contract awards, reduction in contract scope and/or value, the failure to exercise contract options, the cancellation of planned procurements and fewer new business opportunities, all of which could negatively impact our business, financial condition, results of operations and cash flows.
Similar procurement, budgetary, contract, and audit risks that apply in the context of U.S. government contracting may also apply to our doing business with these entities.
In addition, when we contract with the U.S. government, we must comply with these laws and regulations.
We are subject to the Defense Federal Acquisition Regulation Supplement (“DFARS”) and the Department of Defense (“DoD”) and other federal cybersecurity requirements, in connection with our defense work for the U.S. government and defense contractors.
We must comply with security requirements pursuant to the National Industrial Security Program Operating Manual (“NISPOM”) administered by the Defense Counterintelligence and Security Agency (“DCSA”), and other U.S. government security protocols when handling sensitive information.
If one or more of our subcontractors fails to satisfactorily perform the agreed-upon services on a timely basis or violates U.S. government contracting policies, laws or regulations, our ability to perform our obligations as a prime contractor or meet our customers’ expectations may be compromised.
We have limited operational experience with our satellites, and our Gen-3 satellites are at the initial stages of production.

and 39 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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