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. Company Overview Founded in 2014, BlackSky is a space technology company that delivers real-time imagery, analytics and high-frequency monitoring of the world’s most critical and strategic locations, economic assets, and events. By taking a software-first technology approach, we are delivering real time space-based intelligence at disruptive speed, scale and economics. BlackSky is trusted by many of the most demanding U.S. and international government agencies and commercial businesses around the world. We are defining a new category of space-based intelligence products and services centered upon real-time imagery and automated analytics, delivered through an easy-to-use interface that operates seamlessly with our high-revisit and low latency satellite constellation. Our first-of-its-kind, purpose-built, secure artificial intelligence ("AI")-enabled space-to-ground architecture helps customers see, understand and anticipate change for a decisive strategic advantage. BlackSky can provide dynamic hourly monitoring over many of the most strategic locations on Earth up to 15 times per day from dawn to dusk. BlackSky designs, builds, owns and operates the industry’s most advanced, purpose-built commercial, real-time intelligence system that combines the power of the BlackSky Spectra® tasking and analytics software platform with our high resolution, low earth orbit ("LEO") small satellite (“smallsat” or “smallsats”) constellation. Our Gen-3 satellites (“Gen-3”) include significantly enhanced capabilities, including 35-centimeter electro-optical imaging resolution and 1-meter short-wave infrared imaging technology for expanded imaging capabilities in low-light or at night. The Gen-3 constellation also features improved data communications capabilities that significantly increase the end-to-end delivery speed of intelligence products. BlackSky Spectra is a first-of-its-kind commercial tasking, analytics and multi-intelligence data-fusion software platform that helps customers monitor activities from space. The BlackSky constellation is the primary on-orbit data source and communications architecture that delivers space-based information to BlackSky Spectra. BlackSky’s satellites fly in unconventional, inclined orbits, and with built-in automated systems. Our constellation can deliver time-diverse, dawn-to-dusk, rapid revisit imagery, and analytics— with no humans in the loop. BlackSky Spectra provides end users the ability to augment proprietary data collected from our constellations with input from third-party sensors. 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 30 Table of Contents 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. Components of Operating Results Revenue 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. •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. Our AI-generated analytics are also offered on a subscription basis and provide customers with automated access to our site monitoring, event monitoring, and global data services. Our object change and anomaly detection, site monitoring, and enhanced analytics services can detect key pattern-of-life changes in critical locations. These critical locations include infrastructure, such as maritime ports, airfields, and construction sites; retail activity; commodities stockpiles; and other sites that contain critical commodities and supply chain inventory. Our AI-enabled analytics provide for the automated detection and classification of more than 30 objects of tactical interest. We generally structure our customer agreements as annual or multi-year subscription contracts. We offer pricing tiers that enable the customer to manage collection priorities. These options provide customers with flexibility to utilize our space-based intelligence and AI services in a manner that best suits their business needs. For example, during critical events, customers may pay a premium to prioritize their monitoring and collection requirements, while at other times, customers can select lower priority collections to allow for more economical use of their overall subscription. •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. 31 Table of Contents •Advanced Technology Programs Revenue: We provide advanced technology solutions that enhance customer adoption and operational integration of our technology. These services include support for customer-specific software feature development, systems testing, and training, as well as the integration of our imagery and analytics products into a customer’s existing processes and workflows. These services can also include the development and expansion of our current sensor capabilities. Through these services, we help customers tailor, expand and optimize their use of our platforms and mission capabilities. Mission solutions and advanced technology programs revenue contain estimates that may result in the recognition of revenue in a current period for performance obligations that were satisfied or partially satisfied in a prior period. For the impacts of changes in estimates on our contracts, see Note 2—“Basis of Presentation and Summary of Significant Accounting Policies” of the notes to the consolidated financial statements contained within this Quarterly Report on Form 10-Q. Costs and Expenses Our costs and expenses, which includes stock-based compensation expense for those employees who support each category, are incurred from the following categories: •Space-Based Intelligence & AI Services Costs: primarily include third-party data and imagery, ground station service payments, internal labor to support our ground stations and space operations, and compute/storage costs to facilitate our expanding AI/machine learnings ("ML") functionality. Costs are expensed as they are incurred except for incremental costs to obtain a contract, which are primarily sales commissions on contracts greater than one year, and are capitalized and amortized to selling, general, and administrative expenses on a systematic basis consistent with the transfer of goods and services and directly identifiable costs to fulfill a contract. Expense related to stock-based payments is classified in the unaudited condensed consolidated statements of operations and comprehensive loss based upon the classification of each employee's cash compensation. •Mission Solutions Costs: primarily include the cost of direct materials to build and test specific, customized satellite and payload systems components, such as the communications system, payload demands, and sensor integration, as well as internal labor for design and engineering. These costs are incurred in support of long-term development contracts. •Advanced Technology Programs Costs: primarily include the cost of internal labor and external subcontract labor costs for our customer-centric software service solutions. Operating Expenses Our operating expenses are incurred from the following categories: •Selling, General, and Administrative Expense: consists of salaries, taxes, and benefit costs, product development costs, professional fees, and other expenses which include other personnel-related costs, stock-based compensation expense for those employees who generally support our business and operations, and occupancy costs. •Research and Development Expense: consists of employees’ salaries, taxes, and benefits costs incurred while researching next generation space and ground architectures in support of our long-term strategy, which includes investments in satellite design and functionality. Additionally, we employ and classify third-party vendors who help fulfill our strategic projects as research and development expense. We intend to continue to invest appropriate resources in research and development efforts, as we believe that investment is critical to maintaining our competitive position. •Depreciation Expense: is related to property and equipment, which mainly consist of operational satellites and capitalized internal-use software. Amortization expense is related to intangible assets, which mainly consist of customer relationships. We expect to incur additional depreciation expense when each Gen-3 satellite is launched and placed into service. 32 Table of Contents Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025 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. The following table provides the components of results of operations for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, $ % Six Months Ended June 30, $ % 2026 2025 Change Change 2026 2025 Change Change (dollars in thousands) Revenue Space-based intelligence & AI services $ 24,507 $ 17,982 $ 6,525 36.3 % $ 41,026 $ 34,811 $ 6,215 17.9 % Mission solutions 5,111 1,051 4,060 386.3 % 7,120 10,893 (3,773) (34.6) % Advanced technology programs 3,698 3,166 532 16.8 % 5,944 6,039 (95) (1.6) % Total revenue 33,316 22,199 11,117 50.1 % 54,090 51,743 2,347 4.5 % Costs and expenses Space-based intelligence & AI services costs, excluding depreciation and amortization 5,395 3,460 1,935 55.9 % 10,319 7,278 3,041 41.8 % Mission solutions costs, excluding depreciation and amortization 1,601 384 1,217 316.9 % 2,817 7,231 (4,414) (61.0) % Advanced technology programs costs, excluding depreciation and amortization 2,053 2,403 (350) (14.6) % 3,245 4,338 (1,093) (25.2) % Selling, general and administrative 23,778 22,667 1,111 4.9 % 46,340 44,109 2,231 5.1 % Research and development 291 17 274 NM 461 262 199 76.0 % Depreciation and amortization 7,997 7,208 789 10.9 % 17,244 14,444 2,800 19.4 % Operating loss (7,799) (13,940) 6,141 44.1 % (26,336) (25,919) (417) (1.6) % Loss on derivatives (10,517) (24,435) 13,918 57.0 % (18,734) (22,534) 3,800 16.9 % Interest income 1,348 677 671 99.1 % 2,372 1,250 1,122 89.8 % Interest expense (3,865) (3,509) (356) (10.1) % (7,797) (6,852) (945) (13.8) % Other (expense) income, net (1) 3 (4) (133.3) % (2) 68 (70) (102.9) % Loss before income taxes (20,834) (41,204) 20,370 49.4 % (50,497) (53,987) 3,490 6.5 % Income tax expense — (35) 35 100.0 % — (65) 65 100.0 % Net loss $ (20,834) $ (41,239) $ 20,405 49.5 % $ (50,497) $ (54,052) $ 3,555 6.6 % 33 Table of Contents Revenue Three Months Ended June 30, $ % Six Months Ended June 30, $ % 2026 2025 Change Change 2026 2025 Change Change (dollars in thousands) Space-based intelligence & AI services $ 24,507 $ 17,982 $ 6,525 36.3 % $ 41,026 $ 34,811 $ 6,215 17.9 % % of total revenue 73.6 % 81.0 % 75.8 % 67.2 % Mission solutions 5,111 1,051 4,060 386.3 % 7,120 10,893 (3,773) (34.6) % % of total revenue 15.3 % 4.7 % 13.2 % 21.1 % Advanced technology programs 3,698 3,166 532 16.8 % 5,944 6,039 (95) (1.6) % % of total revenue 11.1 % 14.3 % 11.0 % 11.7 % Total revenue $ 33,316 $ 22,199 $ 11,117 50.1 % $ 54,090 $ 51,743 $ 2,347 4.5 % Space-Based Intelligence and AI Services Revenue Space-based intelligence & AI services revenue increased for the three and six months ended June 30, 2026, as compared to the same periods in 2025, primarily from new assured contracts with existing customers in the second quarter of 2026 for increased space-based tactical intelligence, surveillance, and reconnaissance capabilities. Mission Solutions Revenue Mission solutions revenue increased for the three months ended June 30, 2026, as compared to the same period in 2025, primarily attributable to an increase in the rate of performance on two existing mission solutions contracts. Additionally, mission solutions revenue increased by $1.8 million due to net favorable estimate-at-completion adjustments comprised of gross favorable adjustments of $3.7 million and gross unfavorable adjustments of $1.9 million. The favorable adjustments resulted primarily from reductions in the estimated total costs at completion on two mission solutions programs as program risks were retired. The unfavorable adjustment primarily reflected an increase in the estimated labor hours on one other mission solutions program. Mission solutions revenue contains estimates that can result in the recognition of revenue in a current period for performance obligations which were satisfied or partially satisfied in a prior period. For the impacts of changes in estimates on our contracts, see Note 2—“Basis of Presentation and Summary of Significant Accounting Policies” of the notes to the consolidated financial statements contained within this Quarterly Report on Form 10-Q. 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. Advanced Technology Programs Revenue 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. 34 Table of Contents Costs and Expenses Three Months Ended June 30, $ % Six Months Ended June 30, $ % 2026 2025 Change Change 2026 2025 Change Change (dollars in thousands) Space-based intelligence & AI services costs, excluding depreciation and amortization $ 5,395 $ 3,460 $ 1,935 55.9 % $ 10,319 $ 7,278 $ 3,041 41.8 % Mission solutions costs, excluding depreciation and amortization 1,601 384 1,217 316.9 % 2,817 7,231 (4,414) (61.0) % Advanced technology programs costs, excluding depreciation and amortization 2,053 2,403 (350) (14.6) % 3,245 4,338 (1,093) (25.2) % Total costs $ 9,049 $ 6,247 $ 2,802 44.9 % $ 16,381 $ 18,847 $ (2,466) (13.1) % Space-Based Intelligence and AI Service Costs 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. Mission Solutions Costs 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. Advanced Technology Programs Costs 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. 35 Table of Contents Selling, General, and Administrative Three Months Ended June 30, $ % Six Months Ended June 30, $ % 2026 2025 Change Change 2026 2025 Change Change (dollars in thousands) Salaries and benefit costs $ 11,539 $ 11,812 $ (273) (2.3) % $ 23,278 $ 23,515 $ (237) (1.0) % Stock-based compensation expense 4,066 3,288 778 23.7 % 7,993 6,045 1,948 32.2 % Information technology and other administrative expenses 3,114 2,842 272 9.6 % 5,859 5,490 369 6.7 % Professional fees 1,643 1,565 78 5.0 % 2,906 3,560 (654) (18.4) % Selling and marketing 2,007 1,382 625 45.2 % 3,314 2,302 1,012 44.0 % Product development costs 356 670 (314) (46.9) % 902 1,014 (112) (11.0) % Rent expense 562 558 4 0.7 % 1,108 1,122 (14) (1.2) % Insurance 491 550 (59) (10.7) % 980 1,061 (81) (7.6) % Selling, general and administrative $ 23,778 $ 22,667 $ 1,111 4.9 % $ 46,340 $ 44,109 $ 2,231 5.1 % 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. 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: (in thousands) For the years ending December 31, 2026 $ 6,879 2027 11,117 2028 7,581 2029 3,926 2030 755 $ 30,258 36 Table of Contents Research and Development Three Months Ended June 30, $ % Six Months Ended June 30, $ % 2026 2025 Change Change 2026 2025 Change Change (dollars in thousands) Research and development $ 291 $ 17 $ 274 NM $ 461 $ 262 $ 199 76.0 % • NM - Fluctuation in terms of percentage change is not meaningful. Research and development expense increased for the three and six months ended June 30, 2026, as compared to the same periods in 2025, due to increased investments in our next-generation AROS multi-spectral, large-area collection system and novel AI capabilities. Depreciation and Amortization Three Months Ended June 30, $ % Six Months Ended June 30, $ % 2026 2025 Change Change 2026 2025 Change Change (dollars in thousands) Depreciation of satellites $ 3,470 $ 3,573 $ (103) (2.9) % $ 8,097 $ 7,201 $ 896 12.4 % Depreciation of all other property and equipment 4,159 3,455 704 20.4 % 8,225 6,856 1,369 20.0 % Amortization 368 180 188 104.4 % 922 387 535 138.2 % Depreciation and amortization $ 7,997 $ 7,208 $ 789 10.9 % $ 17,244 $ 14,444 $ 2,800 19.4 % 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. 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. 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. 37 Table of Contents Non-Operating Expenses Three Months Ended June 30, $ % Six Months Ended June 30, $ % 2026 2025 Change Change 2026 2025 Change Change (dollars in thousands) Loss on derivatives $ (10,517) $ (24,435) $ 13,918 57.0 % $ (18,734) $ (22,534) $ 3,800 16.9 % Interest income 1,348 677 671 99.1 % 2,372 1,250 1,122 89.8 % Interest expense (3,865) (3,509) (356) (10.1) % (7,797) (6,852) (945) (13.8) % Other (expense) income, net (1) 3 (4) (133.3) % (2) 68 (70) (102.9) % Loss on derivatives 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. Outstanding derivative liabilities are re-measured to fair value at each reporting date. The gains or losses recognized in the applicable period are non-cash fair value adjustments. These re-measurements of derivative liabilities generated a loss for the three and six months ended June 30, 2026 and 2025. In addition, in May 2026, seven thousand of our March 2023 private placement warrants were exercised and the exercised warrants were re-measured to fair value on their exercise dates, resulting in the recognition of a loss on derivatives of $129 thousand. Interest income 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. Interest expense 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%. Non-GAAP Financial Measures In addition to our results determined in accordance with GAAP, management utilizes certain non-GAAP performance measures, such as Adjusted EBITDA, for purposes of evaluating our ongoing operations and for internal planning and forecasting purposes. Our management and board of directors believe that this non-GAAP operating measure, when reviewed with our GAAP financial information, provides useful supplemental information to investors in assessing our operating performance. Adjusted EBITDA 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 38 Table of Contents 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. Adjusted EBITDA is presented as a supplemental measure to our GAAP measures of performance. When evaluating Adjusted EBITDA, you should be aware that we may incur future expenses similar to those excluded when calculating this measure. In addition, our presentation of this measure should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Furthermore, our computation of Adjusted EBITDA may not be directly comparable to similarly titled measures computed by other companies, as the nature of the adjustments that other companies may include or exclude when calculating Adjusted EBITDA may differ from the adjustments reflected in our measure. Because of these limitations, Adjusted EBITDA should not be considered in isolation, nor should this measure be viewed as a substitute for the most directly comparable GAAP measure, which is net loss. We compensate for the limitations of non-GAAP measures by relying primarily on our GAAP results. You should review the reconciliation of our net loss to Adjusted EBITDA below and not rely on any single financial measure to evaluate our performance. The table below reconciles our net loss to Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Net loss $ (20,834) $ (41,239) $ (50,497) $ (54,052) Interest income (1,348) (677) (2,372) (1,250) Interest expense 3,865 3,509 7,797 6,852 Income tax expense — 35 — 65 Depreciation and amortization 7,997 7,208 17,244 14,444 Loss on derivatives 10,517 24,435 18,734 22,534 Stock-based compensation expense 4,312 3,454 8,417 6,351 Severance 180 6 252 332 Litigation, settlements, and related costs 32 77 50 215 Non-recurring transaction costs 17 375 17 1,031 Impairment and asset disposals — — — 44 Adjusted EBITDA $ 4,738 $ (2,817) $ (358) $ (3,434) Liquidity and Capital Resources 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. Our short-term liquidity as of June 30, 2026 was comprised of the following: 39 Table of Contents (in thousands) Cash and cash equivalents $ 36,897 Restricted cash 9,965 Short-term investments(1) 197,283 $ 244,145 (1) Short-term investments were included in cash flows from investing activities in the unaudited condensed consolidated statements of cash flows. 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. In July 2025, we issued $185.0 million aggregate principal amount of Convertible Senior Notes in a private offering. The Convertible Senior Notes will mature on August 1, 2033 unless earlier converted, redeemed or repurchased. The Convertible Senior Notes will bear interest at a rate of 8.25% per year, payable semiannually in arrears on February 1 and August 1 of each year, beginning on February 1, 2026. 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. In December 2025, we entered into an ATM sales agreement with Deutsche Bank Securities Inc. and Craig-Hallum Capital Group LLC as our sales agents (the “2025 ATM Agreement”), under which we could offer and sell from time to time up to $100.0 million of shares of our Class A common stock in negotiated transactions or transactions that were deemed to be an ATM offering. During the six months ended June 30, 2026, we fully exhausted the 2025 ATM Agreement, resulting in net proceeds of $97.0 million; we terminated the 2025 ATM Agreement in May 2026. 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. 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. From time to time, we may seek additional equity or debt financing to fund capital expenditures, strategic initiatives or investments and our ongoing operations. If we decide, or are required, to seek additional financing from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition and results of operations could be adversely affected. 40 Table of Contents Funding Requirements We cannot be sure our revenues will exceed expenses in the near term due to the ongoing investments we are making in sales, marketing and products to increase our market share. We expect to continue to incur capital expenditures as we procure, build, and launch Gen-3 satellites, as well as invest in our BlackSky Spectra software platform to significantly expand our product capabilities in the future. Short-Term Liquidity Requirements 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. 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. Long-Term Liquidity Requirements We anticipate that our most significant long-term liquidity and capital needs will relate to continued funding of operations, including procurement of materials for our missions solutions programs, satellite development capital expenditures, launch capital expenditures, and ongoing investments to optimize our BlackSky Spectra software platform and corporate business and operational systems that will enable us to continue to scale the business efficiently and securely. These ongoing investments in our operational systems include a multi-year minimum commitment for compute/storage costs to facilitate our expanding AI/ML functionality. Upcoming satellite development capital expenditures include plans to expand our current high frequency monitoring constellation with multispectral, large-area collection satellites. We expect that these new satellites will be designed to support country scale digital mapping, navigation, maritime, and 3D digital twin applications. We can manage the timing for a large part of our capital expenditures, including the design, build, and launch of our new satellites currently under development, to provide us with additional flexibility to optimize our long-term liquidity requirements. Macroeconomic conditions and credit markets could also impact the availability and/or the cost of potential future debt or equity financing. Cash Flow Analysis 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. Six Months Ended June 30, $ 2026 2025 Change (in thousands) Net cash (used in) provided by operating activities $ (5,881) $ 19,965 $ (25,846) Net cash used in investing activities (144,926) (49,821) (95,105) Net cash provided by financing activities 154,121 39,186 114,935 Net increase in cash, cash equivalents, and restricted cash 3,314 9,330 (6,016) Cash, cash equivalents, and restricted cash – beginning of year 43,548 14,378 29,170 Cash, cash equivalents, and restricted cash – end of period $ 46,862 $ 23,708 $ 23,154 41 Table of Contents Operating Activities 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. Investing Activities 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. 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. Financing Activities 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. Contractual Obligations and Commitments During 2025, we entered into a commitment for non-refundable multi-launch and integration services as well as a commercial agreement with financing terms for these launches. The launch services agreement contains a minimum commitment that was satisfied as of June 30, 2026 by $11.9 million of debt incurred under the commercial agreement. 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 for further detail on the satellite launch vendor financing. In addition to the above, we have entered into various operational commitments for the next several years totaling $24.8 million as of June 30, 2026. Critical Accounting Estimates The preparation of our unaudited condensed consolidated financial statements and related notes requires management to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Management has based its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. 42 Table of Contents For a description of our significant accounting policies, see Note 2—“Basis of Presentation and Summary of Significant Accounting Policies” of the notes to the unaudited condensed consolidated financial statements. An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the unaudited condensed consolidated financial statements. Management believes the following critical accounting policies reflect the more significant estimates and assumptions used in the preparation of our unaudited condensed consolidated financial statements. Revenue Recognition The recognition and measurement of revenue requires the use of judgments and estimates. Specifically, judgment is used in interpreting complex arrangements with nonstandard terms and conditions and determining when all criteria for revenue recognition have been met, as further discussed below. We generate revenue from the sale of space-based intelligence & AI services, mission solutions, and advanced technology programs. Identifying the Contract with the Customer 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. Identifying the Performance Obligations in a Contract We execute contracts for a single promise or multiple promises. Specifically, our firm-fixed price contracts may include multiple promises which may be accounted for as separate performance obligations if they are capable of being distinct within the context of the contract. Significant judgment is required in determining performance obligations and these decisions could change the amount of revenue and profit or loss recorded in each period. Classification of Revenue We classify revenue as space-based intelligence & AI services, mission solutions, and advanced technology programs in our unaudited condensed consolidated statements of operations and comprehensive loss based on the predominant attributes of the performance obligations. Determination of and Allocation of Transaction Price Each customer contract sets forth the transaction price for the products and services purchased under the arrangement. We estimate any variable consideration, and whether the transaction price is constrained, upon execution of each contract. Variable consideration is estimated as the most likely amount that is dependent upon the occurrence or non-occurrence of a future event. We continually review, and may reassess, the transaction price based on forecasted service level provisions within a limited number of our customer purchase orders, costs incurred to date and historical experience. As a result, we may update our estimated constraints on revenue, which are generally on a prospective basis. For contracts with multiple performance obligations, we evaluate whether the stated selling prices for the products or services represent their standalone selling prices. When it is necessary to allocate the transaction price to multiple performance obligations, management uses the volume adjusted list price for imagery and analytics subscriptions and the expected cost plus a reasonable profit margin to estimate the standalone selling price of each product or service, which is mostly professional services. Determination of when Performance Obligations are Satisfied Space-based intelligence & AI services revenue is recognized over the subscription period based on the promise to continuously provide contractual satellite capacity for tasked imagery or software analytical services at the discretion of the customer. Mission solutions revenue is primarily recognized from firm-fixed price long-term 43 Table of Contents customized satellites and ground station contracts. Advanced technology programs revenue is primarily generated from cost-plus contracts, and time and materials basis contracts and firm-fixed price service solutions contracts. Due to the long-term nature of some of our contracts, we recognize revenue over time using a cost-to-complete measure of progress because it best depicts the transfer of control to the customer as we incur costs on the contracts. Under this measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs to complete the performance obligation(s). Calculating total estimated costs at completion is subject to many variables and requires significant judgment. We recognize changes in the estimation of total costs at completion on a cumulative catch-up basis in the period in which the changes are identified. Such changes in estimates can result in the recognition of revenue in a current period for performance obligations that were satisfied or partially satisfied in a prior period. If, at any time, the estimate of contract profitability indicates a probable anticipated loss on the contract, we recognize the total loss as and when known. Equity Valuations Equity valuations impact various amounts and accounting conclusions reflected in our unaudited condensed consolidated financial statements, including the recognition of equity-based compensation and warrant valuations. The following discussion provides additional details regarding the significant estimates, assumptions, and judgments that impacted the determination of the fair values of equity-based compensation awards, warrants, and the common stock that comprise our capital structure. The following discussion also explains why these estimates, assumptions, and judgments could be subject to uncertainties and future variability. Equity-Based Compensation We have equity and equity-based awards outstanding under our 2021 Equity Incentive Plan ("2021 Plan") and our 2014 Equity Incentive Plan ("2014 Plan"). Outstanding awards issued include stock options and RSUs. In addition, our eligible employees can participate in our 2021 Employee Stock Purchase Plan ("ESPP") pursuant to purchase right offerings that are established under the ESPP. For purposes of recognizing equity-based compensation related to RSUs and stock options granted to employees and other service providers, management estimates the grant date fair values of such awards to measure the costs to be recognized as services are received. For awards with time-based vesting conditions, we recognize compensation costs based upon the straight-line amortization of the grant date fair value of the awards over the requisite service period. When equity-based compensation awards include a performance condition, no compensation is recognized until the performance condition is deemed probable to occur; we then recognize compensation costs based on the accelerated attribution method, which accounts for awards with discrete vesting dates as if they were separate awards. Stock Option and Class A Common Stock Warrant Valuations We use the Black-Scholes option-pricing model to value all options, including options under our ESPP, and Class A common stock warrants. Estimating the fair value of stock options using the Black-Scholes option-pricing model requires the application of significant assumptions, such as the estimated term of the options, risk-free interest rates, the expected volatility of the price of our Class A common stock, and an expected dividend yield. Each of these assumptions is subjective, requires significant judgment, and is based upon management’s best estimates. If any of these assumptions were to change significantly in the future, equity-based compensation related to future awards may differ significantly, as compared with awards previously granted. We grant RSUs to the bulk of our employees. For these RSUs, the grant date fair value is equal to the trading price fair value of our Class A common stock on the date of grant. For stock options, which are primarily granted to certain management employees, we use the following inputs under Black-Scholes as follows: Expected Dividend Yield: The Black-Scholes valuation model requires an expected dividend yield as an input. The dividend yield is based on historical experience and expected future changes. We historically have not paid, and currently have no plans to pay dividends on our Class A common stock. Accordingly, we have assumed no dividend yield upon valuation of our stock options. 44 Table of Contents Expected Volatility: As there was no observable volatility with respect to Legacy BlackSky Class A common stock and due to the lack of sufficient history of BlackSky Class A common stock, we estimated the expected volatility of Legacy BlackSky and BlackSky Class A common stock based upon the historical share price volatility of guideline comparable companies. Risk-free Interest Rate: We used the yield on actively traded, non-inflation indexed U.S. Treasury notes to extrapolate an average risk-free interest rate based on the expected term of the underlying grants. Expected Term: For options granted since 2021, as there is not a significant history of option exercises as a public company, we consider the option vesting terms and contractual period, as well as the demographics of the holders, in estimating the expected term. We will continue to review our estimate and adjust it, if necessary, due to changes in our historical exercises. Private Placement Warrants and Sponsor Shares 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. 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.