What Satellogic (SATL) Said on Its Q3 Earnings Call

Key Points

• Q3 revenue reached a record $16 million, up 342% year over year, driven by satellite deliveries and higher data-contract volumes. Satellogic posted its second consecutive quarter of positive adjusted EBITDA at $1.2 million, while reported GAAP net income of $28.3 million included a $30 million non-cash gain.
• After quarter-end, the company signed a roughly $37 million sovereign satellite agreement, its largest to date. It also reported more than $550 million in qualified opportunities, which are prospective deals—not signed contracts or revenue guidance.
• Satellogic ended September with $106.5 million in cash and negative $11.7 million in free cash flow. Its first Merlin satellite launched in October, but the company expects most revenue impact from the program to begin in 2028.

Satellogic NASDAQ: SATL reported record third-quarter 2026 revenue of $16 million, up 342% from a year earlier, as satellite deliveries and higher data contract volumes helped the company post its second consecutive quarter of positive adjusted EBITDA.

The Earth observation company also signed a roughly $37 million sovereign satellite agreement after the quarter ended, its largest such contract to date. Founder and CEO Emiliano Kargieman said demand for government-owned satellite capabilities was exceeding the company’s expectations at the start of the year.

Satellite Delivery Drives Revenue Growth

Third-quarter revenue rose from $3.6 million a year earlier and edged up from $15.9 million in the second quarter. Revenue for the first nine months reached $38.1 million, compared with $11.5 million in the same period of 2025 and $17.7 million for all of last year.

Space Systems generated $9.5 million, or 59% of quarterly revenue, driven by the in-orbit delivery of the second satellite under an $18 million agreement with Portugal’s CEiiA. Data and Analytics contributed $6.6 million, more than double the prior-year amount, as contract volumes and task orders increased.

Interim Chief Financial Officer Dustin Greer said Data and Analytics revenue declined modestly from the second quarter, primarily because of lower non-cash revenue recognized under the Palantir agreement. The agreement expires in November, and the companies are discussing an extension, he said.

Gross margin excluding depreciation improved to 78% from 68% a year earlier. Total costs and expenses increased 56% to $18.3 million as Satellogic expanded its commercial organization and technical capabilities.

The company narrowed its operating loss to $2.3 million from $8.1 million. Adjusted EBITDA, a non-GAAP measure, was positive $1.2 million, compared with a $4.9 million loss a year earlier. GAAP net income was $28.3 million, including a $30 million non-cash gain from the remeasurement of financial instruments. Greer said those fair-value movements were not indicative of underlying operating performance.

New Sovereign Contract Adds to Backlog Outlook

The post-quarter agreement covers the in-orbit transfer of one NewSat Mark V and two Mark VI satellites. Two are already in orbit, and Satellogic expects to complete the transfers by mid-2027, subject to contractual and regulatory milestones, Kargieman said.

Satellogic ended September with $66.9 million in remaining performance obligations, down from $80.7 million at June 30, primarily because it recognized revenue from the second CEiiA delivery. The company expects $33.4 million of its September balance to be recognized over the next 12 months. The new $37 million agreement was signed after the cutoff and is expected to add to the fourth-quarter total.

Kargieman said the company had more than $550 million in qualified opportunities, which he described as deals where customers have budgets in place and have selected Satellogic’s offering. He did not provide a breakdown by business line, but said Space Systems typically accounts for a larger share because those deals take longer to develop. The pipeline is not revenue guidance or a measure of signed contracts.

The company also extended its relationship with HEO through a three-year non-Earth imaging agreement running through 2029. Kargieman said it carries a seven-figure minimum annual commitment, without disclosing a more specific amount.

Merlin Deployment and Cash Flow

Satellogic launched its first Merlin satellite on October 1. Kargieman said the spacecraft was healthy and commissioning was proceeding according to plan. The company expects to deploy additional Merlin satellites in the first half of 2027 and make the service operational in the second half.

Satellogic does not expect Merlin revenue in 2026 or the first half of 2027. Kargieman said the company expects some revenue in the second half of 2027 but is not planning for a large ramp-up then; most of Merlin’s impact is expected from 2028 onward.

The company ended September with $106.5 million in cash and cash equivalents. Third-quarter net cash used in operating activities was $10.4 million, up from $8.4 million a year earlier. Adjusted operating cash use was $5.5 million, a non-GAAP figure that includes $4.8 million in satellite-sale proceeds classified under GAAP as investing activities.

Capital expenditures were $6.2 million in the quarter, primarily for Merlin and NewSat production. Free cash flow, as defined by Satellogic, was negative $11.7 million. Greer said the company remains focused on disciplined spending as it invests in production and works toward positive free cash flow.

About Satellogic (NASDAQ:SATL)

Satellogic is a space technology company that designs, manufactures and operates Earth-observation satellites. It provides satellite imagery and geospatial data products to customers seeking information about conditions and changes on the ground. The company's services include imagery and monitoring solutions for applications such as agriculture, forestry, energy, infrastructure and government operations. Satellogic also offers access to satellite data and imaging capacity for organizations that need tailored Earth-observation capabilities.

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