BigBear.ai Holdings (BBAI) Q1 2025 Earnings Call May 01, 2025 04:30 PM ET Company Participants None - ExecutiveKevin McAleenan - CEO & DirectorJulie Peffer - Chief Financial Officer Operator Greetings, and welcome to the Big Bear AI Holdings Incorporated First Quarter twenty five Earnings Call and Webcast. At this time, all participants are in a listen only mode. As a reminder, this conference is being recorded. It is now my pleasure to introduce David Cronlow. Thank you, David. You may begin. None Thank yo ...

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $34.8 million, up 5% year-on-year from $33.1 million in Q1 2024, primarily driven by additional revenue from the Department of Homeland Security and digital identity awards [21] - Gross profit increased by 6% from $7 million in Q1 2024 to $7.4 million in Q1 2025, with a gross margin of 21.3%, slightly up from 21.1% in Q1 2024 [22] - Net loss for Q1 2025 was $62 million, significantly improved from a net loss of $127.8 million in Q1 2024, mainly due to the absence of goodwill impairment charges that were $85 million in the previous year [24] - Adjusted EBITDA was negative $7 million for Q1 2025 compared to negative $1.6 million in Q1 2024, primarily driven by increased R&D expenses and recurring SG&A due to government funding delays [25] - Backlog at the end of Q1 2025 was $385 million, up 30% from Q1 2024, indicating continued customer confidence [26] - Cash and cash equivalents at the end of Q1 2025 were $108 million, up from $81 million in Q1 2024, providing increased financial flexibility [26] Business Line Data and Key Metrics Changes - The company is focusing on core markets such as border security, defense, and manufacturing, where it continues to deepen its leadership and expand AI infrastructure [14][18] - In border security, advanced AI solutions have been deployed at major points of entry, enhancing operational efficiency and security [18] - The company is also modernizing the American industrial base and streamlining global supply chains, particularly in shipbuilding [15] Market Data and Key Metrics Changes - The global security environment is driving renewed focus and investment in defense technology, creating opportunities for AI innovation [9] - There is a shift in federal procurement practices towards efficiency and the adoption of advanced commercial technologies [9] - The company is seeing early signs of strategic focus resonating in sectors where it has built deep relationships and understands the mission [17] Company Strategy and Development Direction - The company is committed to mission expertise, international growth, business alliances, and relentless innovation in AI as core strategic priorities for 2025 [12][13] - The growth strategy focuses on strengthening core markets while selectively expanding into high-potential adjacencies [13] - The company aims to build flexible, mission-driven solutions that can adapt and scale with technology innovation [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the dynamic business and macroeconomic environment, which presents both opportunities and potential short-term risks [19] - The company reaffirms its full-year guidance for 2025, emphasizing a strong financial foundation and healthy backlog [30] - Management expresses confidence in the strategy and the ability to navigate market uncertainties while investing in future growth [31] Other Important Information - The company is focused on responsible capital allocation towards projects that aim to provide material improvement to shareholder returns [27] - The debt position has materially reduced, with a significant portion of convertible notes converted into equity, enhancing financial flexibility [27] Q&A Session Summary - No specific questions and answers were provided in the content, thus this section is not applicable.

Financial Performance - Revenue for Q1 2025 was $34.8 million, a 5% increase from $33.1 million in Q1 2024, primarily due to additional revenue from Department of Homeland Security and Digital Identity awards[5] - Net loss for Q1 2025 was $62.0 million, significantly reduced from a net loss of $127.8 million in Q1 2024, mainly due to the absence of non-cash goodwill impairment charges of $85.0 million that occurred in Q1 2024[6] - Adjusted EBITDA for Q1 2025 was $(7.0) million, compared to $(1.6) million in Q1 2024, driven by increased research and development expenses and higher SG&A costs due to government funding delays[6] - Revenue for the three months ended March 31, 2025, was $34,757 thousand, an increase from $33,121 thousand in the same period of 2024, representing a growth of 4.9%[20] - The net loss for Q1 2025 was $61,986 thousand, significantly improved from a net loss of $127,792 thousand in Q1 2024, indicating a reduction of 51.5%[20] - Adjusted EBITDA for Q1 2025 was $(6,989) thousand, compared to $(1,626) thousand in Q1 2024, reflecting a decline in performance[20] - The net loss margin for Q1 2025 was (178.3)%, an improvement from (385.8)% in Q1 2024[20] Expenses - SG&A expenses increased to $22.7 million in Q1 2025 from $16.9 million in Q1 2024, with recurring SG&A rising to $17.7 million from $13.6 million[6] - Selling, general and administrative expenses for Q1 2025 were $22,732 thousand, up from $16,948 thousand in Q1 2024, marking a 33.9% increase[24] - Equity-based compensation allocated to selling, general and administrative expense was $4,087 thousand in Q1 2025, compared to $2,171 thousand in Q1 2024[24] - The company recognized a loss on extinguishment of debt amounting to $2,577 thousand in Q1 2025, with no such loss reported in Q1 2024[20] Cash and Debt Management - Cash balance as of March 31, 2025, was $107.6 million, up from $50.1 million at the end of Q1 2024[13] - The company reduced long-term debt by $58 million during Q1 2025 through voluntary conversions of the 2029 Notes[5] Future Projections - For the full year 2025, the company projects revenue between $160 million and $180 million, with adjusted EBITDA expected to be in the negative single-digit millions[9] - Ending backlog as of March 31, 2025, was $385 million[7] Gross Margin - Gross margin for Q1 2025 was 21.3%, slightly up from 21.1% in Q1 2024[6] - The gross margin for Q1 2025 was 21.3%, slightly up from 21.1% in Q1 2024[20] Non-GAAP Measures - BigBear.ai reported non-GAAP financial measures including EBITDA and Adjusted EBITDA, which are not prepared in accordance with GAAP[28] - Adjusted EBITDA is defined as EBITDA further adjusted for various costs, including equity-based compensation and non-recurring expenses[31] - The company emphasizes that non-GAAP measures should not be considered in isolation from GAAP measures, as they exclude significant expenses and income[34] - BigBear.ai's Adjusted EBITDA Margin is calculated as Adjusted EBITDA as a percentage of Revenue[32] - The company does not provide guidance for net income or reconciliation of Adjusted EBITDA due to unpredictability of certain GAAP elements[35] - Management uses non-GAAP measures to analyze business performance and trends, providing additional tools for investors[33] Strategic Focus - The company is focused on strategic initiatives and market expansion, with ongoing efforts to align organizational capacity and improve product affordability[26] - BigBear.ai operates in sectors such as national security, defense, and enterprise, providing AI-powered decision intelligence solutions[37] - BigBear.ai aims to enhance transparency regarding key measures used to operate and analyze the business over time[30] Company Information - The company is publicly traded on the NYSE under the symbol BBAI[37] - The financial information presented is unaudited and reflects the company's expectations as of the release date[28]

Core Viewpoint - The Gross Law Firm has issued a notice to shareholders of BigBear.ai Holdings, Inc. regarding a class action lawsuit due to alleged misleading statements and accounting errors during a specified class period [1][3]. Summary by Relevant Sections Class Period and Allegations - The class period for the lawsuit is from March 31, 2022, to March 25, 2025 [3]. - Allegations include that BigBear maintained deficient accounting review policies, leading to incorrect accounting for the 2026 Convertible Notes and misstatements in financial statements [3]. Financial Reporting Issues - The company allegedly failed to disclose that the conversion option within the 2026 Convertible Notes did not qualify for the derivative scope exception under ASC 815-40, resulting in improper accounting [3]. - As a consequence, BigBear's financial statements were inaccurate and may require restatement, increasing the risk of delays in filing reports with the SEC [3]. Next Steps for Shareholders - Shareholders are encouraged to register for the class action by June 10, 2025, to monitor the case's progress [4]. - Registration allows shareholders to receive updates and does not incur any costs or obligations [4]. Law Firm's Commitment - The Gross Law Firm aims to protect investors' rights and seeks recovery for losses incurred due to misleading statements or omissions by companies [5].

Core Viewpoint - A lawsuit has been filed against BigBear.ai Holdings, Inc. and certain senior executives for potential violations of federal securities laws, specifically under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 [1][2]. Company Overview - BigBear.ai is an AI-driven technology solutions company that focuses on operationalizing AI through data analysis, providing insights in national security, supply chain management, and digital identity and biometrics [3]. Financial Misstatements - Following its public listing via a SPAC transaction, BigBear.ai issued $200 million of unsecured convertible notes with a maturity date of December 15, 2026. The company improperly accounted for these notes, leading to misstatements in its financial statements [4]. Stock Performance and Impact - On March 18, 2025, BigBear.ai announced a delay in filing its 2024 10-K, stating that prior financial statements since fiscal year 2021 should not be relied upon, resulting in a stock price decline of approximately 15%, from $3.49 to $2.97 per share [5]. - Following the restatement of its financial statements on March 25, 2025, which revealed a material weakness in internal controls, the stock price fell again by about 9%, from $3.51 to $3.19 per share [6].

Core Viewpoint - The Gross Law Firm has issued a notice to shareholders of BigBear.ai Holdings, Inc. regarding a class action lawsuit due to alleged misleading statements and accounting errors during the class period from March 31, 2022, to March 25, 2025 [1][2]. Summary by Sections Allegations - The complaint alleges that BigBear maintained deficient accounting review policies related to the reporting and disclosure of certain non-routine, unusual, or complex transactions [2] - It is claimed that BigBear incorrectly determined that the conversion option within the 2026 Convertible Notes qualified for the derivative scope exception under ASC 815-40 and failed to bifurcate the conversion option as required by ASC 815-15 [2] - The company is accused of improperly accounting for the 2026 Convertible Notes, leading to misstatements in several previously issued financial statements [2] - As a result of these errors, the financial statements were deemed inaccurate and likely to require restatement, increasing the risk of delays in filing financial reports with the SEC [2] Next Steps for Shareholders - Shareholders are encouraged to register for the class action by June 10, 2025, to monitor the case's progress [3] - Registration will provide shareholders with status updates throughout the lifecycle of the case, with no cost or obligation to participate [3] About the Law Firm - The Gross Law Firm is a nationally recognized class action law firm dedicated to protecting the rights of investors affected by deceit, fraud, and illegal business practices [4] - The firm aims to ensure companies adhere to responsible business practices and seeks recovery for investors who suffered losses due to misleading statements or omissions [4]

Core Viewpoint - Rosen Law Firm is reminding investors who purchased BigBear.ai Holdings, Inc. securities between March 31, 2022, and March 25, 2025, of the June 10, 2025, deadline to become lead plaintiffs in a class action lawsuit [1]. Group 1: Class Action Details - Investors who purchased BigBear.ai securities during the specified Class Period may be entitled to compensation without any out-of-pocket fees through a contingency fee arrangement [2]. - A class action lawsuit has already been filed, and interested parties must move the Court by June 10, 2025, to serve as lead plaintiff, representing other class members [3]. - Investors are encouraged to select qualified legal counsel with a successful track record in securities class actions [4]. Group 2: Case Allegations - The lawsuit alleges that BigBear.ai made false and misleading statements and failed to disclose deficiencies in accounting review policies related to certain complex transactions [5]. - Specific allegations include improper accounting for the 2026 Convertible Notes and the likelihood of needing to restate previously issued financial statements due to inaccuracies [5]. - The lawsuit claims that these misstatements led to investor damages when the true details became public [5].

Core Viewpoint - A class action securities lawsuit has been filed against BigBear.ai Holdings, alleging securities fraud that affected investors between March 31, 2022, and March 25, 2025 [1]. Group 1: Lawsuit Details - The complaint claims that BigBear.ai Holdings made false statements and concealed deficiencies in accounting review policies related to complex transactions [2]. - It is alleged that the company incorrectly determined the derivative scope exception for the 2026 Convertible Notes, failing to bifurcate the conversion option as required [2]. - The misstatements in financial statements are expected to necessitate restatements, increasing the risk of delays in filing financial reports with the SEC [2]. Group 2: Investor Information - Investors who suffered losses during the specified timeframe have until June 10, 2025, to request appointment as lead plaintiff, although participation does not require this [3]. - Class members may be entitled to compensation without any out-of-pocket costs or fees [3]. Group 3: Legal Firm Background - Levi & Korsinsky has a strong track record in securing compensation for shareholders and is recognized as one of the top securities litigation firms in the United States [4].

BigBear.ai Holdings, Inc. (BBAI) is scheduled to report first-quarter 2025 results on May 1, after the closing bell.In the last reported quarter, BigBear.ai reported revenues of $43.8 million, which missed the Zacks Consensus Estimate by 19.1% but increased 8% year over year. The company’s bottom line in the fourth quarter was heavily impacted by non-cash charges—specifically, a $93.3 million hit from changes in derivative liabilities tied to the new 2029 convertible notes—resulting in a net loss of $108 mi ...

NEW YORK, April 29, 2025 (GLOBE NEWSWIRE) -- Leading securities law firm Bleichmar Fonti & Auld LLP announces that a lawsuit has been filed against BigBear.ai Holdings, Inc. (NYSE: BBAI) and certain of the Company's senior executives for potential violations of the federal securities laws. If you invested in BigBear.ai, you are encouraged to obtain additional information by visiting https://www.bfalaw.com/cases-investigations/bigbearai-holdings-inc. Investors have until June 10, 2025, to ask the Court to be ...