Why BlackSky Stock Dropped Today

Key Points

• BlackSky met on sales but missed -- badly -- on earnings this morning.

• Quarterly losses quadrupled, and per-share losses more than doubled.

• BlackSky generated positive free cash flow in the first half, but only just barely.

• 10 stocks we like better than BlackSky Technology ›

BlackSky Technology (NYSE: BKSY), the Earth observation satellite company, dropped in afternoon trading Thursday, down 2.6% through 12:30 p.m. ET after reporting a big earnings miss for the second quarter of 2025.

Heading into the report, analysts already weren't optimistic about BlackSky, forecasting a $0.48-per-share loss on $22.2 million in revenue. BlackSky hit the revenue target, barely, but reported a quarterly loss of $1.27 per share.

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Image source: Getty Images.

BlackSky Q2 earnings

Revenue declined 11% year over year, with imagery orders rising nicely, but lumpier "professional and engineering services revenue" falling steeply. Net losses quadrupled year over year, a fact the company blamed on a large loss on derivatives contracts.

The per-share loss didn't increase quite as fast as the net loss, due to BlackSky selling a lot of shares (to raise cash) in the quarter, resulting in a much larger share count that spread out total net losses among more shares outstanding. Thus, the per-share loss increased "only" 144%.

Is BlackSky stock a sell?

Was there any good news to report? Actually, yes, although it took some hunting to find it. Way down at the end of the earnings report, on the cash-flow statement, BlackSky noted that through the first half of this year it's generated positive free cash flow of $11.9 million. The company did note that it spent $10.8 million in cash on "satellite work in process," however. If considered a capital expenditure (and to be conservative, we probably should consider it capex), that would cut FCF for the first half to just $1.1 million.

That's not great, but at least it's positive.

Still, with a $620 million market capitalization, falling sales and deeply negative earnings, it's hard to call BlackSky stock a buy right now. So I won't.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.