WASHINGTON — BlackSky has taken full ownership of smallsat manufacturer LeoStella, giving the remote sensing company greater control over the production of its next generation of imaging satellites.
In a Nov. 7 earnings call to discuss its third quarter financial results, BlackSky announced it acquired the 50% of LeoStella it did not already own from Thales Alenia Space, the other partner in the joint venture. The company did not disclose financial terms of the deal.
The deal was completed on Nov. 6, according to BlackSky’s 10-Q filing with the U.S. Securities and Exchange Commission. “We expect that this acquisition will allow the Company to improve its control over the Gen-3 supply chain and production operations,” the company stated in the filing, which also did not disclose financial details about the transaction.
Gen-3 is the next generation of imaging satellites that LeoStella has been producing for BlackSky. The new satellites promise increase performance in terms of resolution and revisit rates over the company’s existing Gen-2 spacecraft, with additional capabilities such as shortwave infrared imaging and intersatellite links. The company anticipates a baseline constellation of at least a dozen of those satellites.
During the earnings call, Brian O’Toole, chief executive of BlackSky, said the first Gen-3 satellite is in the “final testing phase” after which it will be shipped to New Zealand for launch on a Rocket Lab Electron. He did not disclose a projected launch date for the satellite other than it will take place three to four weeks after shipment.
He said that acquiring the half of LeoStella it did not own would improve efficiencies in the production of future Gen-3 satellites. “To support our Gen-3 production objectives, we’ve taken active steps to further optimize the Gen-3 supply chain and production operations, which includes the acquisition of our partner stake in LeoStella,” he stated.
BlackSky, then a part of Spaceflight Industries, announced the creation of the LeoStella joint venture with Thales Alenia Space in 2018 as part of a $150 million Series C round. LeoStella opened a satellite factory in a Seattle suburb in 2019 that would be used to both produce BlackSky satellites as well as those from other customers.
While LeoStella did win business from other companies, such as Loft Orbital, and sought to enter defense markets, BlackSky was its major customer. In an Oct. 24 press release to announce that BlackSky and LeoStella jointly were selected for a Space Development Agency program that makes them eligible to compete for future experimental satellite missions, LeoStella stated that it has delivered 23 satellites to date, 19 of which were in orbit. Most of those would be for BlackSky.
O’Toole was vague about whether LeoStella would continue to sell satellites to third parties now that it is wholly owned by BlackSky. “Right now, BlackSky is the primary customer for LeoStella. So, we’ve been essentially funding that business through our existing satellite production contracts,” he said. LeoStella’s focus, he said, will be “on the scaling of Gen-3 and optimizing those production operations.”
Notably, LeoStella’s website now redirects to BlackSky’s site, which makes no mention of satellite manufacturing capabilities.
O’Toole said in the earnings call that despite buying out Thales Alenia’s stake in LeoStella, the two companies would continue to work together. “Our partnership with Thales remains really strong,” he said. “We’re continuing to partner worldwide on bringing Gen-3 capability combined with their offerings to the market.”
BlackSky reported $71.7 million in revenue in the first nine months of this year, a 22% increase over the same period in 2023. It said it had adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $4.3 million through the first nine months of the year, compared to negative adjusted EBITDA of $10.3 million in the same period last year.
