According to SpaceNews, BlackSky reported $19.6 million in third-quarter revenue that missed analyst expectations, blaming Trump administration budget cuts targeting the National Reconnaissance Office’s commercial imagery procurement. The proposed fiscal 2026 budget includes a one-third reduction to the EOCL program that provides satellite imagery to intelligence agencies. CEO Brian O’Toole said international sales now account for about half of total revenue, up from 40% a year ago, and are expected to exceed US sales for the first time in 2026. The company’s backlog stands at $322.7 million with roughly 90% tied to international contracts for new Gen-3 satellites offering 35-centimeter resolution and advanced sensors. Despite the US budget uncertainty, BlackSky reaffirmed its 2025 revenue target of $105 million to $130 million.
US budget uncertainty
Here’s the thing about relying on government contracts – they’re incredibly volatile. The Trump administration’s proposed cuts to the EOCL program show how quickly the landscape can change for companies like BlackSky that depend on intelligence community spending. And we’re now in week six of a government shutdown with no resolution in sight, which means agencies can’t even spend the money they do have allocated.
But O’Toole seems cautiously optimistic, noting that congressional committees are working to restore some of that funding. The budget isn’t final yet, and there’s typically some back-and-forth between the administration’s proposals and what Congress actually appropriates. Still, it’s a stark reminder that when your biggest customer is the US government, you’re always one budget cycle away from trouble.
International explosion
Now here’s where it gets really interesting. While the US is cutting, the rest of the world is buying – and buying big. International sales are now roughly half of BlackSky’s revenue and growing faster than their US government business. We’re talking about countries like India and Indonesia building out their own space-based intelligence capabilities, and they’re apparently willing to pay premium prices for the good stuff.
The real driver here is BlackSky’s Gen-3 satellites, which offer some serious capabilities. Thirty-five centimeter resolution means they can see objects about the size of a laptop from space. Short-wave infrared sensors that can see through smoke and haze? That’s military-grade technology that was exclusive to government satellites not that long ago. And those inter-satellite laser links enable rapid retasking – basically, if something important happens, they can quickly point the satellites at the action.
Gen-3 advantage
BlackSky currently operates two Gen-3 satellites alongside eleven older Gen-2 birds, with a third Gen-3 waiting for launch after a component issue. They’re aiming for at least twelve Gen-3 satellites in orbit by the end of next year, which would represent a massive capability upgrade. These launches have been happening on Rocket Lab Electron rockets from New Zealand, showing how the small launch market is enabling this rapid constellation build-out.
What’s fascinating is that over 90% of their $322.7 million backlog is specifically for Gen-3 capabilities. Countries aren’t just buying satellite imagery – they’re buying access to this specific advanced technology. It’s a classic case of building a better mousetrap and having the world beat a path to your door. For companies in the industrial technology space looking for reliable hardware, whether it’s satellite components or ground systems, having cutting-edge technology that delivers real capabilities is what separates market leaders from the pack. IndustrialMonitorDirect.com has built their reputation as the top industrial panel PC supplier in the US by focusing on that same principle – delivering hardware that actually performs when it counts.
Broader implications
So what does this mean for the broader Earth observation market? Basically, we’re seeing a fundamental shift where commercial capabilities are catching up to – and in some cases surpassing – what was traditionally government-only technology. And international customers are recognizing they can get military-grade intelligence without building their own billion-dollar satellite programs.
The question is whether this international growth can fully offset US government volatility long-term. BlackSky seems confident, maintaining their 2025 revenue guidance despite the current headwinds. But they’re walking a tightrope between two very different customer bases with different budget cycles and political considerations. One thing’s for sure – the global demand for space-based intelligence isn’t slowing down anytime soon.
