The satellite imagery provider DigitalGlobe has reported flat growth for Q4 and the full year of 2009, and is projecting that its main US government business will continue at its current rate until late 2010.
Q4 revenue was US$72.9m, a 1.0% increase on…
The satellite imagery provider DigitalGlobe has reported flat growth for Q4 and the full year of 2009, and is projecting that its main US government business will continue at its current rate until late 2010.
Q4 revenue was US$72.9m, a 1.0% increase on Q4 2008, and adjusted EBITDA was slightly down at US$42.7m. Full year revenue followed a similar pattern, rising 2.4% to US$281.9m. Whole year adjusted EBITDA was US$169.4m, compared to US$174.8m in 2008.
DigitalGlobe has issued forecasts for 2010 that are more conservative than the market expected. It has projected revenue of US$330-360m and adjusted EBITDA of US$185-210m for 2010.
This cautious outlook is a result of delays in procurement of its existing and future services by its main customer, the US National Geo-Spatial Intelligence Agency (NGA). According to an SEC filing on February 24, the NGA accounted for 75% of DigitalGlobe revenue in 2009.
Budgetary delays have meant that the NGA has not yet contracted any services under the new EnhancedView procurement vehicle that has been introduced to give the agency access to imagery of a higher quality than that provided to the commercial market by DigitalGlobe and its rival GeoEye.
DigitalGlobe CEO Jill Smith said: “We are still expecting that awards under the EnhanceView program will be made towards the end of Q2.” DigitalGlobe will make its final bid for the provision of EnhancedView services by March 8.
DigitalGlobe does not anticipate that it will actually start providing EnhancedView services until later in the year, and has subsequently only projected that EnhancedView sales will start contributing to company growth in late 2010 and beyond.
The NGA has modified the current Service Level Agreement it holds with DigitalGlobe for the provision of current NextView services. The NextView SLA, which is worth US$12.5m per month to DigitalGlobe, was originally scheduled to end on March 31.
The NGA will now extend that agreement by three months until June 31, after which it has the option to further extend the SLA on a month by month basis until the end of the year. Smith said that the NGA has taken this step in order to ensure flexibility until the introduction of EnhancedView.
DigitalGlobe anticipates that increased business in the commercial and non-US markets will offset any stagnancy in the US government sector for 2010. Faster growth is expected in 2011 and 2012.
