BigBear.ai(BBAI) - 2024 Q4 - Annual Report

Financial Performance - Revenues for the year ended December 31, 2024, increased to $158,236 million, up from $155,164 million in 2023, representing a growth of 1.3%[548]. - Gross margin improved to $45,220 million in 2024, compared to $40,601 million in 2023, reflecting a significant increase of 11.5%[548]. - Research and development expenses rose to $10,863 million in 2024, a substantial increase from $5,035 million in 2023, indicating a growth of 116.5%[548]. - The net loss for 2024 was $295,547 million, compared to a net loss of $70,657 million in 2023, representing an increase in losses of 318.5%[548]. - Basic and diluted net loss per share for 2024 was $1.27, compared to $0.47 in 2023, indicating a deterioration in per-share performance[548]. - Total comprehensive loss for 2024 was $295,426 million, compared to $70,657 million in 2023, marking an increase of 318.3%[548]. - Net loss for the year ended December 31, 2024, was $295.5 million, compared to a net loss of $70.7 million in 2023[556]. - The accumulated deficit as of December 31, 2024, was $571.6 million, up from $276.1 million as of December 31, 2023[546]. Assets and Liabilities - As of December 31, 2024, the total assets of BigBear.ai Holdings, Inc. amounted to $343.8 million, a significant increase from $199.9 million as of December 31, 2023[546]. - Total current liabilities increased to $203.0 million as of December 31, 2024, compared to $69.1 million in the previous year[546]. - Long-term debt, net of unamortized discounts, was $135.4 million as of December 31, 2024, down from $156.2 million in the previous year[546]. - Total liabilities decreased to $229.9 million as of December 31, 2023, down from $267.2 million[566]. - The company reported cash and cash equivalents of $50.1 million as of December 31, 2024, up from $32.6 million in the previous year[546]. Employee and Organizational Structure - The company employs 630 individuals, with approximately 53% being software engineers, data scientists, and cyber subject-matter experts[38]. - The company had approximately 630 full-time employees as of December 31, 2024, with no employees affiliated with labor unions[47][48]. - The company incurred employee separation costs of $1.3 million during the three months ended March 31, 2024, compared to $0.8 million for the same period in 2023, indicating a 63% increase[636][637]. - The company completed its organizational restructuring by March 31, 2024, with no unpaid employee separation costs as of December 31, 2024[636]. Acquisitions and Investments - The company completed the acquisition of Pangiam Intermediate Holdings, LLC on February 29, 2024, enhancing its vision AI capabilities in global trade, travel, and digital identity industries[23]. - The company issued 63,982,145 common shares as consideration for the acquisition of Pangiam, contributing to the increase in total stockholders' equity[551]. - The acquisition of Pangiam resulted in post-acquisition net revenues of $38.7 million and a net loss of $82.6 million for the year ended December 31, 2024[649]. - BigBear.ai's acquisition of ProModel Corporation was completed for approximately $16.1 million, funded through cash and the issuance of 649,976 shares[653]. Financial Instruments and Derivatives - The estimated fair value of derivative liabilities related to warrants was $54.7 million as of December 31, 2024, with the 2024 RDO and PIPE Warrants fully exercised in Q1 2025[525]. - The estimated fair value of derivative liabilities related to the 2029 and 2026 Convertible Notes was $116.2 million as of December 31, 2024[526]. - The company recorded changes in fair value of Level 3 liabilities, with significant additions of $37.4 million in 2024[666]. Revenue Recognition and Accounting Policies - The Company recognizes revenue from fixed-price contracts based on the predetermined price, with profit varying according to actual costs incurred[580]. - For T&M contracts, revenue is recognized based on the right to invoice method, corresponding directly with the value of the Company's performance[581]. - Revenue is recognized over time for contracts with continuous transfer of control, using the percentage-of-completion method based on costs incurred[591]. - The Company allocates transaction prices to performance obligations based on estimated standalone selling prices, particularly for contracts with the U.S. government[589]. Goodwill and Intangible Assets - Goodwill impairment for 2024 was recorded at $85,000 million, while there was no impairment in 2023, indicating a significant adjustment in asset valuation[548]. - Goodwill related to the Pangiam acquisition was recorded at $156.1 million, reflecting potential synergies and market expansion opportunities[648]. - The weighted-average estimated useful lives of the acquired intangible assets from Pangiam are 7 years for technology, 5 years for trade names, and 20 years for customer relationships[646]. - Intangible assets net amount to $119.1 million as of December 31, 2024, with amortization expense of $11.3 million recognized in 2024[673][674]. Research and Development - Research and development expenses were $5,035 million in 2023, down from $8,393 million in 2022, reflecting a strategic reduction in R&D spending[568]. - Capitalized software development costs increased to $10.2 million for the year ended December 31, 2024, compared to $3.3 million for the year ended December 31, 2023, reflecting a 209% increase[626].