Core Viewpoint - The article compares the future prospects of two AI-driven companies, BigBear.ai and Five9, highlighting their growth rates, revenue performance, and overall market positioning. Company Performance - BigBear.ai went public via a SPAC merger on December 8, 2021, with an initial stock price of $9.84, reaching a high of $12.69 on April 13, 2022, but now trades below $4 [2] - Five9 went public on April 4, 2014, starting at $7 and peaking at $211.68 on August 4, 2021, currently trading around $28 [2] - BigBear.ai's revenue grew at a CAGR of only 3% from $140 million in 2020 to $158 million in 2024, significantly below its initial target of 41% CAGR [5] - Five9 aimed for revenue growth from $610 million in 2021 to $2.4 billion by 2026, but revised its target to 2027 and later abandoned the $2.4 billion goal, now targeting 10%-15% annual growth [6] Revenue Growth Comparison - BigBear.ai's revenue growth rates were 4% in 2021, 6% in 2022, 0% in 2023, and 2% in 2024 [9] - Five9's revenue growth rates were 40% in 2021, 28% in 2022, 17% in 2023, and 14% in 2024, indicating a much faster growth trajectory [9][7] - In 2024, Five9 generated over six times the revenue of BigBear.ai [7] Market Challenges - BigBear.ai faced challenges including the bankruptcy of its leading customer, Virgin Orbit, tough competition, and macroeconomic headwinds that limited software spending [9] - Five9 continued to grow despite similar macro challenges, benefiting from companies outsourcing customer support and adopting AI chatbots [10] Future Projections - Analysts expect BigBear.ai's revenue to grow at a CAGR of 9% from 2024 to 2026, while Five9's revenue is projected to grow at a CAGR of 10% [11] - BigBear.ai is expected to remain unprofitable, whereas Five9 is anticipated to become profitable this year and significantly increase its net income by 2026 [11] Valuation Metrics - BigBear.ai has an enterprise value of $1.1 billion, trading at 6.5 times this year's estimated sales [12] - Five9 has an enterprise value of $2.8 billion, trading at 2.4 times this year's sales, indicating a more attractive valuation [12] - BigBear.ai's outstanding shares increased by over 130% in the past three years, while Five9's increased by about 9% [12] Insider Activity - Over the past 12 months, BigBear.ai's insiders sold more than 30 times as many shares as they bought, while Five9's insiders bought nearly three times as many shares as they sold, suggesting stronger insider confidence in Five9 [13] Conclusion - Five9 is identified as the superior investment option due to its larger size, faster growth rate, sustainable business model, clearer path to profitability, and more attractive valuation compared to BigBear.ai [14]

Core Insights - BigBear.ai and C3.ai are both AI companies targeting government, military, and large enterprise customers, but they are not direct competitors [4] - Both companies have seen significant declines in their stock prices since going public, with BigBear.ai trading around $2 from an opening of $9.84, and C3.ai trading around $19 from an opening of $42 [2] Company Overview - BigBear.ai develops AI modules that enhance data from various sources and predict future trends, focusing on edge networks and using a case-by-case pricing model [5] - C3.ai offers a broader range of AI modules that can be integrated into various deployment environments, initially focusing on subscriptions but later introducing consumption-based fees [7][8] Financial Performance - BigBear.ai's revenue grew from $146 million in 2021 to $158 million in 2024, with a net loss increasing from $124 million to $257 million [11] - C3.ai's revenue increased from $269 million in fiscal 2023 to $311 million in fiscal 2024, but its net loss also widened from $269 million to $280 million [14] Future Projections - Analysts expect BigBear.ai's revenue to rise nearly 8% to $170 million in 2025, with a narrowed net loss of $54 million [13] - C3.ai's revenue is projected to grow by 25% to $388 million in fiscal 2025, but its net loss is expected to widen to $300 million [15] Strategic Challenges - BigBear.ai faced challenges due to the bankruptcy of Virgin Orbit, which limited its revenue recognition from that partnership [6] - C3.ai is heavily reliant on its joint venture with Baker Hughes, which accounted for 35% of its revenue in fiscal 2024, and the deal is set to expire without renewal [9] Management Issues - BigBear.ai has undergone significant leadership changes, now on its third CEO since going public [10] - C3.ai has experienced instability in its financial leadership, with four CFOs since its IPO, and is facing lawsuits from investors regarding misrepresentation of its partnership with Baker Hughes [10]