-- Closed 2025 with strongest financial position in Company history
-- Total cash and investments of $462 million as of December 31, 2025
-- Settled the remaining $125 million of 2029 Convertible notes, primarily
through the Company's exercise of debt-to-equity conversion features in
January 2026.
-- Closed acquisitions of Ask Sage (December 2025), and CargoSeer (January
2026), and expanded into the Middle East, which positions the Company for
solid growth in 2026
-- The Company projects full-year 2026 revenue between $135 million and
$165 million, representing approximately 17% growth at the midpoint
compared to full-year 2025 revenue of $128 million
MCLEAN, Va.--(BUSINESS WIRE)--March 02, 2026--
BigBear.ai Holdings, Inc. (NYSE: BBAI) ("BigBear.ai" or the "Company"), a leader in AI-powered decision intelligence solutions, today announced financial results for the fourth quarter of 2025 and issued an investor presentation that has been posted to the Investor Relations section of the Company's website.
"At the start of 2025, we set out to transform our financial foundations to establish a base from which to accelerate in 2026. We have delivered exactly that. As of year-end 2025, BigBear.ai is in the strongest financial position in the company's history. I am tremendously grateful to our team for the work they have done. We have reduced our debt by more than 90%, established a powerful cash position that gives us the freedom to invest in catalytic technologies, expanded internationally, and acquired two highly specialized technology companies which play directly into our two core markets in national security and travel & trade," said Kevin McAleenan, CEO of BigBear.ai.
"The U.S. Government's AI Acceleration Strategy plays directly to our strengths. Unlike many AI and technology companies, we deeply understand the reality operators face. Our national security customers and global partners need the ability to apply emerging tech securely, more rapidly and with greater flexibility than ever before to address emerging threats and challenges. And that's what we intend to keep doing for them."
"There were many significant milestones in 2025: we raised $693 million of proceeds from our ATM facilities and warrants; and closed the purchase of Ask Sage, the largest acquisition in BigBear's history. Further, we have already started 2026 by settling our 2029 Notes, which amounted to $182 million in the beginning of 2025, and also closing on the acquisition of CargoSeer," said Sean Ricker, CFO of BigBear.ai.
Financial Highlights
-- Revenue decreased 38% to $27.3 million for the fourth quarter of 2025,
compared to $43.8 million for the fourth quarter of 2024 primarily due to
lower volume on Army programs.
-- Gross margin was 20.3% in the fourth quarter of 2025, compared to 37.4%
in the fourth quarter of 2024, due to significant one-time high margin
contracts in the fourth quarter of 2024, which did not recur in the
fourth quarter of 2025.
-- Net loss in the fourth quarter of 2025 was $5.8 million, compared to a
net loss of $138.2 million for the fourth quarter of 2024. The decrease
in net loss was primarily driven by non-cash gain of $50.2 million
related to derivative liabilities associated with changes in the fair
value of the convertible features of the 2029 and 2026 Notes and warrants
for the fourth quarter of 2025 compared to a non-cash loss of $93.3
million for the fourth quarter of 2024. Further there was a non-cash loss
on extinguishment of debt in fourth quarter of 2024 of $31.3 million.
Additionally, the Company realized an income tax benefit of $21.7 million
related to a change in tax valuation allowances resulting from the Ask
Sage acquisition. This was partially offset by impairment of long-lived
assets of $53.4 million during the fourth quarter of 2025.
-- Non-GAAP Adjusted EBITDA* of $(10.3) million for the fourth quarter of
2025 compared to $2.0 million for the fourth quarter of 2024, primarily
driven by a decrease in gross margin as well as an increase in research
and development, and SG&A expenses.
The above information on financial outlook, and other sections of this release contain forward-looking statements, which are based on the Company's current expectations. Actual results may differ materially from those projected. It is the Company's practice not to incorporate adjustments into its financial outlook for proposed acquisitions, divestitures, changes in law, or new accounting standards until such items have been consummated, enacted, or adopted, as the case may be. For additional factors that may impact the Company's actual results, refer to the "Forward-Looking Statements" section in this release.
*EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are non-GAAP financial
measures. See the "Non-GAAP Financial Measures" section in this press release
for additional information and reconciliations.
Summary of Results for the Fourth Quarter Ended and Years Ended
December 31, 2025 and December 31, 2024
(Unaudited)
Three Months Ended Years Ended
December 31, December 31,
---------------------------- ------------------------------
$ thousands (expect
per share amounts) 2025 2024 2025 2024
------------------- ----------- ----------- ----------- -----------
Revenues $ 27,300 $ 43,827 $ 127,672 $ 158,236
Cost of revenues 21,752 27,422 99,194 113,016
------------------- ----------- ----------- ----------- -----------
Gross margin 5,548 16,405 28,478 45,220
Operating expenses:
Selling,
general and
administrative 25,658 22,243 95,132 80,040
Research and
development 4,818 2,334 16,752 10,863
Restructuring
charges 113 (30) 4,370 1,287
Transaction
expenses 2,082 -- 2,082 1,450
Impairment of
long-lived
assets 53,403 -- 53,403 --
Goodwill
impairment -- -- 70,636 85,000
------------------- ----------- ----------- ----------- -----------
Operating loss (80,526) (8,142) (213,897) (133,420)
Interest
expense 3,977 6,258 18,116 25,647
Interest income (6,687) (486) (13,253) (2,293)
Net (decrease)
increase in
fair value of
derivatives (50,168) 93,262 92,794 107,658
Loss on
extinguishment
of debt -- 31,272 2,577 31,272
Other (income)
expense (40) 11 1,505 99
------------------- ----------- ----------- ----------- -----------
Loss before taxes (27,608) (138,459) (315,636) (295,803)
Income tax
benefit (21,778) (278) (21,722) (256)
------------------- ----------- ----------- ----------- -----------
Net loss $ (5,830) $ (138,181) $ (293,914) $ (295,547)
------------------- ----------- ----------- ----------- -----------
Basic and diluted
net loss per
share $ (0.01) $ (0.55) $ (0.82) $ (1.27)
Weighted-average
shares
outstanding:
Basic 436,683,643 250,575,733 358,801,375 233,604,500
Diluted 436,683,643 250,575,733 358,801,375 233,604,500
------------------- ----------- ----------- ----------- -----------
Consolidated Balance Sheets as of
December 31, 2025 and December 31, 2024
(Unaudited)
$ in thousands (except per share December 31, December 31,
amounts) 2025 2024
---------------------------------------- -------------- ----------------
Assets
Current assets:
Cash and cash equivalents $ 87,126 $ 50,141
Restricted cash 5,521 --
Available for sale investments 200,461 --
Accounts receivable, less allowance
for credit losses 22,703 38,953
Contract assets 218 895
Prepaid expenses and other current
assets 14,514 3,768
---------------------------------------- --------- ---------
Total current assets 330,543 93,757
---------------------------------------- --------- ---------
Non-current assets:
Property and equipment, net 1,562 1,566
Goodwill 241,100 119,081
Intangible assets, net 139,470 119,119
Available for sale investments 173,949 --
Right-of-use assets 7,063 9,263
Other non-current assets 860 990
---------------------------------------- --------- ---------
Total assets $ 894,547 $ 343,776
---------------------------------------- --------- ---------
Liabilities and stockholders' equity
(deficit)
Current liabilities:
Accounts payable $ 6,088 $ 8,455
Short-term debt, including current
portion of long-term debt 16,560 818
Accrued liabilities 19,649 19,496
Contract liabilities 14,756 2,541
Current portion of long-term lease
liability 1,095 1,068
Derivative liabilities 116,906 170,515
Other current liabilities 10,466 73
---------------------------------------- --------- ---------
Total current liabilities 185,520 202,966
---------------------------------------- --------- ---------
Non-current liabilities:
Long-term debt, net 90,484 135,404
Long-term lease liability 6,673 9,120
---------------------------------------- --------- ---------
Total liabilities 282,677 347,490
---------------------------------------- --------- ---------
Stockholders' equity (deficit)
Common stock, par value $0.0001;
500,000,000 shares authorized and
436,955,655 shares issued and
outstanding at December 31, 2025
and 251,554,378 shares issued and
outstanding at December 31, 2024 46 26
Additional paid-in capital 1,534,792 625,130
Treasury stock, at cost 9,952,803
shares at December 31, 2025 and
December 31, 2024 (57,350) (57,350)
Accumulated deficit (865,555) (571,641)
Accumulated other comprehensive
(loss) income (63) 121
---------------------------------------- --------- ---------
Total stockholders' equity (deficit) 611,870 (3,714)
Total liabilities and stockholders'
equity (deficit) $ 894,547 $ 343,776
---------------------------------------- --------- ---------
Consolidated Statements of Cash Flows for the Fourth Quarter and
Years Ended December 31, 2025 and December 31, 2024 (Unaudited)
Three Months Ended Years Ended
December 31, December 31,
---------------------- ------------------------
$ in thousands 2025 2024 2025 2024
------------------- -------- -------- -------- --------
Cash flows from
operating
activities:
Net loss $ (5,830) $(138,181) $(293,914) $(295,547)
Adjustments to
reconcile net loss
to net cash used in
operating
activities:
Depreciation
and
amortization
expense 4,233 3,133 15,281 11,873
Amortization of
debt discount
and issuance
costs 2,108 3,169 9,057 13,428
Accretion of
discount on
investments in
debt
securities (841) -- (966) --
Equity-based
compensation
expense 6,290 5,053 23,330 21,127
Goodwill
impairment -- -- 70,636 85,000
Impairment of
long-lived
assets 53,403 -- 53,403 --
Non-cash lease
expense 246 167 2,200 720
Provision for
doubtful
accounts -- 8 351 228
Deferred income
tax benefit (21,660) (291) (21,660) (328)
Loss on
extinguishment
of debt -- 31,272 2,577 31,272
(Decrease)
increase in
fair value of
derivatives (50,168) 93,262 92,794 107,658
Changes in assets
and liabilities:
Decrease
(increase) in
accounts
receivable 2,998 (6,357) 17,237 (11,753)
Decrease in
contract
assets 1,962 849 677 3,927
(Increase)
decrease in
prepaid
expenses and
other assets (7,232) 536 (10,370) 2,076
(Decrease)
increase in
accounts
payable (2,809) 4,197 (5,698) (4,027)
Decrease in
accrued
expenses (6,768) (10,483) (254) (2,873)
(Decrease)
increase in
contracts
liabilities (373) 28 593 514
Increase
(decrease) in
other
liabilities 2,607 (1,168) 2,775 (1,414)
------------------- -------- -------- -------- --------
Net cash used in
operating
activities (21,834) (14,806) (41,951) (38,119)
------------------- -------- -------- -------- --------
Cash flows from
investing
activities:
Purchases of
investments in
debt
securities (305,706) -- (564,445) --
Proceeds from
maturities and
sales of
investments in
debt
securities 191,154 -- 191,154 --
Acquisition of
business, net
of cash
acquired (229,025) -- (229,025) 13,935
Purchases of
property and
equipment (252) (180) (525) (484)
Capitalized
software
development
costs -- (3,234) (3,841) (10,630)
------------------- -------- -------- -------- --------
Net cash (used in)
provided by
investing
activities (343,829) (3,414) (606,682) 2,821
------------------- -------- -------- -------- --------
Cash flows from
financing
activities:
Proceeds from
issuance of
shares for
exercised RDO
and PIPE
warrants -- -- 64,673 53,809
Payment of
Private
Placement and
Registered
Direct
Offering
transaction
costs -- -- (551) --
Proceeds from
at-the-market
offering -- -- 637,073 --
Payment of
transaction
costs for
at-the-market
offering -- -- (8,284) --
Proceeds from
short-term
borrowings -- 817 -- 817
Repayment of
short-term
borrowings -- -- (818) (1,229)
Payment of debt
issuance costs
to third
parties -- (349) (4,679) (349)
Proceeds from
exercise of
options 61 302 3,665 421
Issuance of
common stock
upon ESPP
purchase 1,310 760 2,379 1,367
Payments of tax
withholding
from the
issuance of
common stock (108) 765 (2,145) (2,378)
------------------- -------- -------- -------- --------
Net cash provided
by financing
activities 1,263 2,295 691,313 52,458
------------------- -------- -------- -------- --------
Effect of foreign
currency rate
changes on cash,
cash equivalents,
and restricted
cash 467 482 (174) 424
Net (decrease)
increase in cash,
cash equivalents
and restricted
cash (363,933) (15,443) 42,506 17,584
Cash, cash
equivalents, and
restricted cash at
the beginning of
the period 456,580 65,584 50,141 32,557
------------------- -------- -------- -------- --------
Cash, cash
equivalents, and
restricted cash at
the end of the
period $ 92,647 $ 50,141 $ 92,647 $ 50,141
------------------- -------- -------- -------- --------
EBITDA* and Adjusted EBITDA* for the Fourth Quarter and Years Ended
December 31, 2025 and December 31, 2024
(Unaudited)
Three Months Ended Years Ended
December 31, December 31,
--------------------- ------------------------
$ thousands 2025 2024 2025 2024
-------------------- ------- -------- -------- --------
Net loss $ (5,830) $(138,181) $(293,914) $(295,547)
Interest expense 3,977 6,258 18,116 25,647
Interest income (6,687) (486) (13,253) (2,293)
Income tax benefit (21,778) (278) (21,722) (256)
Depreciation and
amortization 4,233 3,132 15,281 11,872
-------------------- ------- -------- -------- --------
EBITDA (26,085) (129,555) (295,492) (260,577)
Adjustments:
Equity-based
compensation 6,290 5,053 23,330 21,127
Employer payroll
taxes related
to equity-based
compensation(1) 125 244 2,011 985
Net (decrease)
increase in
fair value of
derivatives(2) (50,168) 93,262 92,794 107,658
Restructuring
charges(3) 113 (30) 4,370 1,287
Non-recurring
strategic
initiatives(4) 3,944 1,517 9,075 6,459
Non-recurring
litigation(5) -- 23 30 1,142
Transaction
expenses(6) 2,082 -- 2,082 1,450
Non-recurring
integration
costs(7) 44 175 44 1,800
Goodwill
impairment(8) -- -- 70,636 85,000
Impairment of
long-lived
assets(9) 53,403 -- 53,403 --
Loss on
extinguishment
of debt(10) -- 31,272 2,577 31,272
-------------------- ------- -------- -------- --------
Adjusted EBITDA $(10,252) $ 1,961 $ (35,140) $ (2,397)
-------------------- ------- -------- -------- --------
(1) Includes employer payroll taxes due upon the vesting of equity awards
granted to employees.
(2) The change in fair value of derivatives during the year ended December
31, 2025 relates to the remeasurement of the 2025 warrants, IPO
warrants and the 2026 and 2029 Notes Conversion Options derivative
liabilities. The change during the year ended December 31, 2025,
relates to the $14.0 million loss recorded upon the exercise of the
2024 RDO and 2024 PIPE Warrants (the "2024 Warrants") and issuance of
the warrants in 2025 (the "2025 Warrants") in connection with the
warrant exercise agreements entered into on February 5, 2025. During
the year ended December 31, 2025, there was loss related to a
mark-to-market adjustment of $59.9M for the debt to equity conversions
during the period. There was a gain related to the fair market value
adjustment on the 2025 warrants and the private warrants of $2.3
million. Additionally, there was a loss of $20.8 million fair market
value adjustments of the 2026 and 2029 Notes Conversion Option, during
the year ended December 31, 2025.
The increase in fair value of derivatives during the year ended
December 31, 2024, relates to the $42.3 million loss recorded upon the
exercise of the 2023 RDO and 2023 PIPE Warrants (the "2023 Warrants")
and issuance of the warrants in 2024 (the "2024 Warrants") in
connection with the warrant exercise agreements entered into on
February 27, 2024 and March 4, 2024. The additional loss relates to
$11.4 million fair market value adjustment of the 2026 Notes Conversion
Option, 2024 Warrants, and IPO Private Warrants during the year ended
December 31, 2024. This loss is net of a $10.6 million gain related to
the issuance of the 2024 Warrants and was further offset by a reduction
of $11.4 million upon remeasurement of the 2024 Warrants and IPO
Private Warrants' fair value during the year ended December 31, 2024.
Additionally, for the year-ended December 31, 2024, there was a $54.4
million loss related to the fair market valuation of the derivative
liabilities in connection with the 2029 Convertible Notes.
(3) Employee separation costs associated with strategic reviews of the
Company's capacity and future projections to better align the
organization and cost structure and improve the affordability of its
products and services.
(4) Non-recurring professional fees incurred in connection with discrete,
non-recurring strategic initiatives, including business transformation
and strategy realignment consulting services which management does not
consider part of the Company's ongoing operating expenses.
(5) Non-recurring litigation consists primarily of legal settlements and
related fees for specific proceedings that we have determined arise
outside of the ordinary course of business based on the following
considerations which we assess regularly: (1) the frequency of similar
cases that have been brought to date, or are expected to be brought
within two years; (2) the complexity of the case; (3) the nature of the
remedy(ies) sought, including the size of any monetary damages sought;
(4) offensive versus defensive posture of us; (5) the counterparty
involved; and (6) our overall litigation strategy.
(6) Transaction expenses during the year ended December 31, 2024 consist
primarily of diligence, legal and other related expenses incurred
associated with the Pangiam acquisition. Transaction expenses during
the year ended December 31, 2025 consist primarily of diligence, legal
and other related expenses incurred associated with the Ask Sage
acquisition, as well as expenses incurred to explore other acquisition
options.
(7) Non-recurring internal integration costs related to the Pangiam and Ask
Sage acquisitions, respectively.
(8) During the year ended December 31, 2024, the Company recognized a
non-cash goodwill impairment charge primarily driven by a decrease in
share price during the quarter compared to the share price of the
equity issued as consideration for the purchase of Pangiam. During the
year ended December 31, 2025, the company recognized a non-cash
goodwill impairment charge primarily driven by a change in forecast
during the second quarter of 2025.
(9) During December 2025, the Company recognized a non-cash impairment of
its intangible assets, primarily driven by certain revenue contracts
with the U.S. government that resulted in downward revisions of short
and long-term forecasts.
(10) Loss on extinguishment of debt is related to voluntary conversions of
the 2029 Notes to common stock and the related extinguishment of
unamortized debt discount and debt costs.
*EBITDA and Adjusted EBITDA are non-GAAP financial measures. See the "Non-GAAP
Financial Measures" section in this press release for additional information
and reconciliations.
Forward-Looking Statements
This release contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 (the "Securities Act"), the Securities Exchange Act of 1934 (the "Exchange Act") and the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "should," "would," "plan," "predict," "project," "potential," "seem," "seek," "future," "outlook," and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding our industry, future events, and other statements that are not historical facts. These statements are based on current expectations and beliefs concerning future developments and their potential effects on us and should not be relied upon as representing BigBear's assessment as of any date subsequent to the date of this release. There can be no assurance that future developments affecting us will be those that we have anticipated. Many actual events and circumstances are beyond our control. These forward-looking statements are subject to a number of risks and uncertainties, including those relating to: changes in domestic and foreign business, market, financial, political, and legal conditions; the uncertainty of projected financial information; delays caused by factors outside of our control, including changes in fiscal or contracting policies or decreases in available government funding, including as a result of events such as war, incidents of terrorism, natural disasters, and public health concerns or epidemics; changes in government programs or applicable requirements; budgetary constraints, including any potential constraints as a result of recent or future federal government layoffs, including automatic reductions as a result of "sequestration" or similar measures and constraints imposed by any lapses in appropriations for the federal government or certain of its departments and agencies, including government shutdowns or the ability of the U.S. federal government to unilaterally cancel a contract with or without cause, and more specifically, the potential impact of the U.S. DOGE Service Temporary Organization on government spending and terminating contracts for convenience; the failure of contracts comprising backlog to result in revenue due to changes in funding, terminations for convenience, or option periods going unexercised; the impact of tariffs or other restrictive trade measures; implementation of spending limits or changes in budgetary constraints; influence by, or competition from, third parties with respect to pending, new, or existing contracts with government customers; changes in our ability to successfully compete for and receive task orders and generate revenue under Indefinite Delivery/Indefinite Quantity contracts; our ability to realize the benefits of the strategic partnerships; risks that the new businesses will not be integrated successfully or that the combined companies will not realize estimated cost savings; failure to realize anticipated benefits of the combined operations; potential delays or changes in the government appropriations or procurement processes; our ability to remediate a material weakness in our internal control over financial reporting; risks regarding the market and our customers accepting and adopting our products, including future new product offerings; the high degree of uncertainty of the level of demand for, and market utilization of, our solutions and products; our ability to successfully execute and realize the benefits of joint ventures, channel sales relationships, partnerships, strategic alliances, subcontracting opportunities, customer contracts and other commercial agreements to which we are a party; and those factors discussed in the Company's reports and other documents filed with the SEC, including under the heading "Risk Factors." If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from those projected by
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