By Nate Wolf

BigBear.ai Holdings stock soared Tuesday after the artificial-intelligence software firm reported stronger-than-expected quarterly earnings and announced the acquisition of generative AI platform Ask Sage.

The company posted a loss of 3 cents a share for the third quarter, surpassing the loss of 7 cents a share analysts had anticipated. Revenue totaled $33.1 million, down 20% from last year but ahead of Wall Street's call for $31.8 million. BigBear reported net income of $2.5 million, marking its second ever quarterly profit and the first since 2023.

Shares climbed 16% in premarket trading Tuesday. The stock is up 28% this year and 214% over the last 12 months as of Monday's close, buoyed by lucrative government contracts and the broader excitement around AI.

BigBear, which sells its software to the Defense Department and other branches of the federal government, continues to double down on the defense sector. The company announced a $250 million deal on Monday to acquire Ask Sage, an AI platform built for defense and national agencies. Ask Sage already supports more than 100,000 users across hundreds of companies and 16,000 government teams, BigBear CEO Kevin McAleenan said.

Defense-related stocks have surged in 2025, so it makes sense why BigBear is leaning into the trend. The Global X Defense Tech exchange-traded fund has climbed 79% this year, led by its largest holding Palantir Technologies.

"Despite delays resulting from the government shutdown, we believe the potential for new business in the field of border security and defense remains strong," McAleenan said, adding that he expected those opportunities "to materialize into contracts next year" with the help of President Donald Trump's sweeping tax-and-spending bill.

Whether that push leads to consistent profits is an open question. BigBear's losses haven't consistently narrowed since its 2021 special-purpose acquisition company, or SPAC, merger. And the company is on track to post its lowest fiscal-year revenue as a public company in 2025.

BigBear is, in part, banking on Ask Sage continuing its rapid growth. The start-up, which was founded in 2023, is expected to post annual recurring revenue of roughly $25 million in 2025, up sixfold from a year ago. The deal is expected to close late in the fourth quarter of 2025 or early in the first quarter of 2026.

Write to Nate Wolf at nate.wolf@barrons.com

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November 11, 2025 08:36 ET (13:36 GMT)

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