Artificial intelligence (AI) and data company BigBear.ai (BBAI -2.19%) was on a roller-coaster ride over the past month. Shares surged on AI hype and news that AI chip leader Nvidia was buying stakes in emerging AI companies (it didn't buy a stake in BigBear.ai).Unfortunately, those gains evaporated after an earnings report that fell short of Wall Street's expectations. That leaves investors at a crossroads, trying to decide whether BigBear.ai's rise was just a fluke or if the stock is due for a rebound.Whi ...

BigBear.ai (BBAI -4.65%) has disappointed a lot of investors since it went public by merging with a special purpose acquisition company (SPAC) in December 2021. The data mining and analytics company's stock started trading at $9.84 on its first day and rose to an all-time high of $12.69 the following April, but now trades at about $2.BigBear.ai initially dazzled the bulls with rosy long-term estimates before it closed its merger. But like many other SPAC-backed companies, it missed those estimates by a mile ...

Companies Overview - Snowflake, Palantir, and BigBear.ai are competing in the data analytics sector, with Snowflake and Palantir being established players while BigBear.ai is a newer entrant [1] - Snowflake is known for its cloud-based platform and scalability, but its high valuation and dependence on a few large customers are concerns [5] - Palantir focuses on artificial intelligence and government contracts, but its opaque business model and reliance on government contracts raise questions about its long-term prospects [5] - BigBear.ai specializes in AI and machine learning solutions for government and commercial clients, with a lower valuation but significant risks due to its short operating history and lack of profitability [5] Valuation Metrics - Snowflake has a high price-to-sales (P/S) ratio of 18.6, reflecting investor optimism, while Palantir's P/S ratio is even higher at 24.1, suggesting potential overvaluation [2] - BigBear.ai has a more modest P/S ratio of 2.0, making it appear more affordable compared to its peers [2] - Snowflake and Palantir trade at triple-digit multiples to forward earnings estimates, with price-to-free cash flow ratios between 60 and 80, which are considered high and may deter value investors [2] Profitability and Growth Potential - BigBear.ai is not yet profitable, with only a single quarter of positive adjusted EBITDA and operating cash flows, and its trailing four-quarter results remain negative [3] - Snowflake has impressive historical and projected EPS growth, justifying its premium valuation to some extent [3] - Palantir shows decent growth but has not fully convinced investors of its ability to maintain momentum [3] - BigBear.ai's revenue growth slowed during the 2023 AI boom, while Snowflake and Palantir experienced robust topline gains [4] Investment Considerations - Snowflake may be a safer bet for investors seeking proven growth, despite its premium price [6] - Palantir could appeal to high-growth investors willing to take on more risk due to its intriguing technology and government connections [6] - BigBear.ai might attract speculative investors comfortable with higher uncertainty, but it needs to demonstrate sustained growth to gain broader investor interest [6] Conclusion - The decision to invest in BigBear.ai depends on individual risk tolerance and investment goals, with Snowflake and Palantir potentially offering more established alternatives [7]

This was a big week for artificial intelligence (AI) aficionados. The hot ticket was Nvidia's (NVDA 1.18%) GPU Technology Conference (GTC), which has been called the "Woodstock of AI." According to reports, some of the biggest names in technology were on hand while millions more joined the festivities online.CEO Jensen Huang gave the keynote address, which included a rundown of the company's latest AI-centric creations. Investors had plenty to digest, which weighed on many AI stocks throughout the week.With ...

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...

When BigBear.ai (BBAI) went public by merging with a special purpose acquisition company (SPAC) in December 2021, it bore a striking resemblance to Palantir Technologies (PLTR -3.85%), which went public through a direct listing in September 2020. Both analytics companies helped government and enterprise customers aggregate data from disparate sources to make smarter decisions. BigBear.ai even integrated Palantir's tools into its own modules before its public debut. BigBear.ai's stock now trades at about $2, ...

Part I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) BigBear.ai provides Edge AI decision intelligence solutions for national security, supply chain, and digital identity, primarily serving the U.S. government - BigBear.ai provides Edge AI-powered decision intelligence solutions, serving the national security, supply chain management, and digital identity markets through both software and services[12](index=12&type=chunk)[15](index=15&type=chunk) - On February 29, 2024, the company completed the acquisition of Pangiam, a leader in vision AI, to create a comprehensive vision and edge AI portfolio[13](index=13&type=chunk) - The company's total addressable market (TAM) is estimated at approximately **$80 billion** in 2024, projected to grow to **$272 billion** by 2028[33](index=33&type=chunk) - A significant portion of revenue is derived from contracts with public sector agencies, including the U.S. Federal Government[30](index=30&type=chunk) - As of December 31, 2023, the company had approximately **480 employees**, with a majority holding active security clearances[37](index=37&type=chunk) [Item 1A. Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including dependence on government contracts, customer concentration, long sales cycles, cybersecurity threats, and substantial indebtedness - A significant portion of business depends on sales to the public/government sector, which are subject to changes in fiscal policies, budgetary constraints, and potential contract terminations[54](index=54&type=chunk)[250](index=250&type=chunk) - The company has a high customer concentration, with three customers comprising **49% of revenue** for the twelve months ended December 31, 2023 These contracts contain termination for convenience clauses[65](index=65&type=chunk)[66](index=66&type=chunk) - The sales cycle is often long (**6-12+ months**) and unpredictable, involving considerable time and expense, particularly with government customers[62](index=62&type=chunk) - The company faces risks related to its **$200 million** in **6.0% Convertible Notes due 2026**, including restrictive covenants, subordination to secured debt, and potential dilution upon conversion[283](index=283&type=chunk)[327](index=327&type=chunk) - Cybersecurity threats are a significant risk, as the company's software handles sensitive customer data, making it an attractive target for cyberattacks[176](index=176&type=chunk)[177](index=177&type=chunk) - The integration of the newly acquired Pangiam business presents challenges, and the company may not successfully realize the anticipated strategic and financial benefits[341](index=341&type=chunk)[343](index=343&type=chunk) [Item 1B. Unresolved Staff Comments](index=93&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[418](index=418&type=chunk) [Item 1C. Cybersecurity](index=93&type=section&id=Item%201C.%20Cybersecurity) The company's cybersecurity program, based on NIST, is overseen by a CISO and the Board, with no material incidents reported to date - The company's cybersecurity program is built upon the National Institute of Standards and Technology (NIST) Cybersecurity Framework[420](index=420&type=chunk) - The program is supervised by a dedicated Chief Information Security Officer (CISO) with over 15 years of experience, who reports to the Board of Directors on cyber risks[421](index=421&type=chunk) - The Board of Directors, along with the Audit Committee and Nominating and Governance Committee, have oversight of cybersecurity threats[425](index=425&type=chunk) - To date, the company has not experienced any material cybersecurity incidents[425](index=425&type=chunk) [Item 2. Properties](index=94&type=section&id=Item%202.%20Properties) The company leases approximately 54,000 square feet across five primary locations, including its Columbia, Maryland headquarters - The company leases approximately **54,000 square feet** of space across five main locations, with its corporate headquarters in Columbia, Maryland[427](index=427&type=chunk) [Item 3. Legal Proceedings/Legal Matters](index=94&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal matters, not expecting a material impact on its financial condition - The company is subject to litigation and claims in the ordinary course of business but does not expect the outcomes to have a material impact on its financial statements[428](index=428&type=chunk) [Item 4. Mine Safety Disclosures](index=94&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[429](index=429&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=94&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NYSE under 'BBAI', with no history or current intent to pay cash dividends - The company's common stock is traded on the NYSE under the ticker symbol **"BBAI"**[429](index=429&type=chunk) - As of December 31, 2023, there were **86 common stockholders of record**[430](index=430&type=chunk) - The company has never declared or paid cash dividends and does not currently intend to, planning to retain future earnings for growth[431](index=431&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=98&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal year 2023 saw flat revenue at $155.2 million, a reduced net loss of $60.4 million, improved Adjusted EBITDA, and a decrease in total backlog [Recent Developments](index=98&type=section&id=Recent%20Developments) Recent developments include the Pangiam acquisition, significant capital raises through warrant exercises and offerings, and a shift to a single operating segment - Completed the acquisition of Pangiam on February 29, 2024, a leader in vision AI for global trade, travel, and digital identity[443](index=443&type=chunk) - Raised approximately **$53.8 million** in gross proceeds through two separate warrant exercise agreements in February and March 2024[445](index=445&type=chunk)[446](index=446&type=chunk) - Raised approximately **$50 million** in gross proceeds during 2023 through a registered direct offering and a private placement[447](index=447&type=chunk)[448](index=448&type=chunk) - Effective Q1 2023, the company reorganized its operations from two segments (Cyber & Engineering and Analytics) into a single operating and reportable segment[451](index=451&type=chunk)[452](index=452&type=chunk) [Results of Operations](index=105&type=section&id=Results%20of%20Operations) Revenue remained flat at $155.2 million in 2023, while operating and net losses significantly improved due to the absence of goodwill impairment Consolidated Statements of Operations (in thousands) | | Year Ended December 31, | | | | :--- | :--- | :--- | :--- | | | **2023** | **2022** | **2021** | | **Revenues** | **$155,164** | **$155,011** | **$145,578** | | Gross margin | $40,601 | $42,993 | $34,068 | | Operating loss | ($39,034) | ($110,527) | ($78,472) | | Goodwill impairment | $0 | $53,544 | $0 | | **Net loss** | **($60,366)** | **($121,674)** | **($123,552)** | - Revenue in 2023 was nearly flat year-over-year, with an increase of just **$0.15 million** Growth in Army programs was offset by the wind-down of certain Air Force programs and lower volume from Virgin Orbit following its bankruptcy[471](index=471&type=chunk) - SG&A expenses decreased by **$13.7 million (16.2%)** in 2023 compared to 2022, driven by restructuring actions and a reduction in non-recurring integration and advisory costs[475](index=475&type=chunk) - Research and development expenses decreased by **$3.4 million (40.0%)** in 2023 due to the capitalization of certain software development projects that reached technological feasibility[477](index=477&type=chunk) [Supplemental Non-GAAP Information](index=109&type=section&id=Supplemental%20Non-GAAP%20Information) Adjusted EBITDA improved to a $3.2 million loss in 2023, and Free Cash Flow improved to negative $22.1 million, reflecting better operational efficiency Adjusted EBITDA Reconciliation (in thousands) | | **2023** | **2022** | **2021** | | :--- | :--- | :--- | :--- | | **Net loss** | **($60,366)** | **($121,674)** | **($123,552)** | | Adjustments | $57,163 | $104,589 | $128,404 | | **Adjusted EBITDA** | **($3,203)** | **($17,085)** | **$4,852** | Free Cash Flow (in thousands) | | **2023** | **2022** | **2021** | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | ($18,307) | ($48,918) | ($19,782) | | Capital expenditures, net | ($3,830) | ($769) | ($639) | | **Free cash flow** | **($22,137)** | **($49,687)** | **($20,421)** | [Key Performance Indicators](index=111&type=section&id=Key%20Performance%20Indicators) Total backlog decreased to $167.8 million as of December 31, 2023, primarily due to reductions in priced, unexercised options and funded backlog Backlog Summary (in thousands) | Backlog Category | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Funded | $30,112 | $57,234 | | Unfunded | $49,382 | $18,220 | | Priced, unexercised options | $63,878 | $112,119 | | Unpriced, unexercised options | $24,438 | $30,900 | | **Total backlog** | **$167,810** | **$218,473** | [Liquidity and Capital Resources](index=113&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2023, liquidity was $32.6 million, total debt was $195.5 million, and net cash used in operating activities improved to $18.3 million Liquidity and Debt Summary (in thousands) | | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $32,557 | $12,632 | | Total available liquidity | $32,557 | $12,632 | | Total debt, net | $195,502 | $194,377 | Consolidated Cash Flows (in thousands) | | **2023** | **2022** | | :--- | :--- | :--- | | Net cash used in operating activities | ($18,307) | ($48,918) | | Net cash used in investing activities | ($3,830) | ($5,234) | | Net cash provided by (used in) financing activities | $42,062 | ($103,137) | - The company's **$200 million** in unsecured convertible notes bear **6.0% interest** and mature on December 15, 2026 The conversion price was adjusted to **$10.61** in May 2022[512](index=512&type=chunk)[513](index=513&type=chunk) [Critical Accounting Policies and Estimates](index=117&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant estimates in revenue recognition, goodwill impairment, warrant valuation, and software development cost capitalization - Revenue from long-term contracts is generally recognized over time using a percentage-of-completion cost-to-cost measure of progress, which requires significant estimation of total contract costs[553](index=553&type=chunk)[561](index=561&type=chunk) - Goodwill is assessed for impairment annually as of October 1 In 2022, the company recorded a non-cash goodwill impairment charge of **$53.5 million** related to its former Cyber & Engineering and Analytics reporting units[540](index=540&type=chunk)[547](index=547&type=chunk) - Private, PIPE, and RDO warrants are classified as liabilities and remeasured at fair value each period, with changes recognized in earnings Public warrants are classified as equity[568](index=568&type=chunk) - The company capitalizes software development costs incurred after technological feasibility is established In 2023, **$3.3 million** in such costs were capitalized[653](index=653&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=126&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include common stock value fluctuations impacting derivative liabilities and convertible debt, interest rate risk on fixed-rate debt, and inflation - The main market risk is tied to the value of the company's common stock, which impacts derivative liabilities and convertible debt features[579](index=579&type=chunk) - The company is exposed to interest rate risk, with **$200 million** in fixed-rate long-term debt outstanding as of December 31, 2023[579](index=579&type=chunk) - Inflation is a factor, but the company believes it can mitigate its effects through price increases and contractual escalation clauses[580](index=580&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=128&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2021-2023, along with the independent auditor's report Consolidated Balance Sheet Data (in thousands) | | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$199,910** | **$195,308** | | Cash and cash equivalents | $32,557 | $12,632 | | Goodwill | $48,683 | $48,683 | | **Total Liabilities** | **$267,245** | **$233,180** | | Long-term debt, net | $194,273 | $192,318 | | **Total stockholders' deficit** | **($67,335)** | **($37,872)** | Consolidated Statement of Operations Data (in thousands) | | **2023** | **2022** | **2021** | | :--- | :--- | :--- | :--- | | **Revenues** | **$155,164** | **$155,011** | **$145,578** | | **Gross margin** | **$40,601** | **$42,993** | **$34,068** | | **Operating loss** | **($39,034)** | **($110,527)** | **($78,472)** | | **Net loss** | **($60,366)** | **($121,674)** | **($123,552)** | [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures](index=176&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) The company reports no changes or disagreements with its accountants on financial disclosures - None[795](index=795&type=chunk) [Item 9A. Controls and Procedures](index=176&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with prior material weaknesses remediated - Management concluded that disclosure controls and procedures were effective as of December 31, 2023[796](index=796&type=chunk) - Previously disclosed material weaknesses related to segregation of duties, revenue recognition, and IT General Controls were remediated as of December 31, 2023[800](index=800&type=chunk)[801](index=801&type=chunk) - Based on its assessment, management concluded that internal control over financial reporting was effective as of December 31, 2023[798](index=798&type=chunk) [Item 9B. Other Information](index=178&type=section&id=Item%209B.%20Other%20Information) Executive officers adopted Rule 10b5-1 trading plans for equity award tax obligations, and a NYSE-compliant Clawback Policy was adopted - On December 15, 2023, several executive officers adopted Rule 10b5-1 trading plans to facilitate the sale of shares to cover tax withholding obligations related to equity awards[804](index=804&type=chunk)[805](index=805&type=chunk)[808](index=808&type=chunk) - The Compensation Committee adopted a Clawback Policy compliant with NYSE rules, allowing the company to recover excess incentive-based compensation from executives in the event of a material financial restatement[810](index=810&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=180&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not Applicable[811](index=811&type=chunk) Part III [Items 10-14](index=180&type=section&id=Items%2010-14) Information for Items 10-14 will be incorporated by reference from the company's definitive 2024 Proxy Statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the Registrant's 2024 Proxy Statement, which will be filed within 120 days of the fiscal year-end[812](index=812&type=chunk)[813](index=813&type=chunk)[814](index=814&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=180&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all exhibits, financial statements, and schedules filed with the Form 10-K, including governance and material contracts - This item provides a list of all financial statements, schedules, and exhibits filed with the Form 10-K, including governance documents, material contracts, and certifications[815](index=815&type=chunk)[816](index=816&type=chunk)[817](index=817&type=chunk) [Item 16. Form 10-K Summary](index=184&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates no Form 10-K summary - None[818](index=818&type=chunk)

Exhibit 99.1 BigBear.ai Announces Close of Pangiam Acquisition, $54M of Incremental Cash Proceeds, Net Loss of $21.3 million in Q4 2023, and Second Consecutive Quarter of Positive Adjusted EBITDA in Q4 2023 Financial Results • Announced successful close of Pangiam acquisition in an all-stock transaction, combining facial recognition, image-based anomaly detection and advanced biometrics with BigBear.ai's computer vision capabilities. • Approximately $54 million of cash proceeds, before fees, related to warr ...

BigBear.ai (BBAI) is set to report fourth-quarter 2023 results on Mar 7.The Zacks Consensus Estimate for fourth-quarter 2023 revenues is pegged at $42.63 million, indicating a 5.61% increase from the year-ago quarter’s reported figure.The consensus mark for loss has remained unchanged at 7 cents per share in the past 30 days. The company reported a loss of 23 cents per share in the year-ago quarter.BigBear’s earnings miss the Zacks Consensus Estimate in three of the trailing four quarters while beating the ...

Fool.com contributor Parkev Tatevosian forecasts BigBear.ai's (BBAI 25.14%) prospects and answers where the stock could be by the end of 2024. *Stock prices used were the afternoon prices of March 1, 2024. The video was published on March 4, 2024. ...