Annual report [Section 13 and 15(d), not S-K Item 405]

Stock-Based Compensation

v3.25.1
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation
19. Stock-Based Compensation
Legacy BlackSky adopted two equity incentive plans in prior years and issued equity and equity-based awards under the 2014 Equity Incentive Plan (the “2014 Plan”) and the Amended and Restated 2011 Equity Incentive Plan (the “2011 Plan”, together with the 2014 Plan, collectively the “Prior Plans”), which are now administered by the Company’s board of directors. The Prior Plans are no longer active; however, outstanding awards granted under these Prior Plans were not affected by the termination of the Prior Plans. Both of the Prior Plans allowed the board of directors of Legacy BlackSky to grant stock options, designated as incentive or nonqualified, and other equity awards to employees, officers, directors, and consultants. Stock options were granted with an exercise price per share equal to at least the estimated fair value of the underlying shares of Legacy BlackSky Class A common stock on the date of grant. The vesting period was determined through individual award agreements and was generally over a four-year period. Awards generally expired 10 years from the date of grant. As of December 31, 2024, the Company had no options outstanding under the 2011 Plan and 93 thousand options outstanding under the 2014 Plan.
In connection with the Merger, the Company adopted its 2021 Equity Incentive Plan (the "2021 Plan", together with the Prior Plans, collectively the “Plans”) under which it has granted equity awards following the
Merger and the Company adopted its ESPP under which eligible employees began participating in December 2023.
The stock-based compensation expense attributable to continuing operations is included in the consolidated statements of operations and comprehensive loss as indicated in the table below:
Years Ended December 31,
2024 2023
(in thousands)
Imagery & software analytical service costs, excluding depreciation and amortization $ 173  $ 242 
Professional & engineering service costs, excluding depreciation and amortization 470  502 
Selling, general and administrative 10,526  10,118 
Total stock-based compensation expense $ 11,169  $ 10,862 
The Company recorded stock-based compensation related to capitalized internal labor for software development activities and satellite work in process of $0.6 million and $0.7 million during the years ended December 31, 2024 and 2023, respectively. These amounts were included in property, plant, and equipment - net and satellite work in process in the consolidated balance sheets.
Stock Options
Following the Merger, the outstanding stock options issued under the 2011 Plan and the 2014 Plan may be exercised (subject to their original vesting, exercise and other terms and conditions) to purchase a number of shares of Class A common stock equal to the number of shares of Legacy BlackSky Class A common stock, as adjusted for the common stock exchange ratio in the Merger, subject to the same terms and conditions as were applicable to such Legacy BlackSky stock option (each an “Assumed Company Stock Option”). The exercise price per share of each Assumed Company Stock Option was equal to the quotient obtained by dividing the exercise price per share applicable to such Legacy BlackSky stock option by the common stock exchange ratio.
The Black-Scholes option pricing model is used to determine the fair value of stock options granted. The Company utilized assumptions concerning expected term, a risk-free interest rate, and expected volatility to determine such values. The Company did not grant any stock options in the year ended December 31, 2024. A summary of the weighted-average assumptions used by the Company during the year ended December 31, 2023 is presented below:
Year Ended December 31, 2023
Fair value per common share
$1.27
Weighted-average risk-free interest rate
4.31%
Volatility
31.20%
Expected term (in years) 8.00
Dividend rate 0%
Legacy BlackSky historically adjusted the exercise price of certain outstanding stock options. For each award with an adjusted exercise price, Legacy BlackSky calculated the incremental fair value, which was the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. The incremental fair value was recognized as stock-based compensation expense immediately to the extent that the modified stock option already had vested, and for stock options that were not yet vested, the incremental fair value has been recognized as stock-based compensation expense over the remaining vesting period.
A summary of the Company’s stock option activity under the Plans during the year ended December 31, 2024 is presented below:
Options Weighted-Average Exercise Price Weighted Average Contractual Term Aggregate Intrinsic Value
(in thousands) (in years) (in thousands)
Outstanding - January 1, 2024 1,101  $ 19.94 
Exercised (23) 0.10 
Forfeited (202) 49.57 
Outstanding - December 31, 2024 876  13.62  7.62 $ 954 
Exercisable - December 31, 2024 876  13.62  7.62 954
For stock options exercised, intrinsic value is calculated as the difference between the estimated fair value on the date of exercise and the exercise price. The total intrinsic value of stock options exercised during the years ended December 31, 2024 and 2023 was $0.2 million and $0.6 million, respectively. The total fair value of stock options vested during the years ended December 31, 2024 and 2023 was $2.3 million and $2.0 million, respectively.
As of December 31, 2024, there was $2.3 million of total unrecognized stock-based compensation expense, which is expected to be recognized over a weighted-average period of 1.7 years.
Restricted Stock Units
The Company granted an aggregate of 1.3 million RSUs to certain employees and service providers during the year ended December 31, 2024 under the 2021 Plan. The general vesting provisions are that 25% will vest on the one-year anniversary of the vesting commencement date and 75% will vest ratably over twelve consecutive quarters on specified quarterly vesting dates, with the first of such quarterly vesting dates occurring at least three months after the vesting of the initial 25% of the RSUs.
A summary of the Company’s nonvested RSU activity during the year ended December 31, 2024 is presented below:
Restricted Stock Units Weighted-Average Grant-Date Fair Value
(in thousands)
Nonvested - January 1, 2024 2,016  $ 13.52 
Granted 1,319  7.48 
Vested (852) 15.52 
Canceled (64) 12.87 
Nonvested - December 31, 2024 2,419  9.54 
During the year ended December 31, 2024, 48 thousand of the vested, but not yet issued, RSUs were withheld to satisfy payroll tax withholding obligations, which was recorded to additional paid-in capital totaling $1.6 million. Unrecognized compensation costs related to nonvested RSUs totaled $21.4 million as of December 31, 2024, which is expected to be recognized over a weighted-average period of 2.6 years.