Breaking Down BigBear.ai Holdings, Inc. (BBAI) Financial Health: Key Insights for Investors

Are you keeping a close watch on BigBear.ai Holdings, Inc. (BBAI) and trying to understand its financial standing? With a recent 5-year, $165 million production contract from the U.S. Army for GFIM-OE, and revenue increasing by 22.1% to $41.5 million for the third quarter of 2024, compared to $34.0 million for the third quarter of 2023, the company shows promising growth. But, with a net loss of $12.2 million for the same period and a free cash flow of -$49.23M for the year ending December 31, 2024, is everything as it seems? Dive in as we dissect BBAI's financial performance, providing you with key insights to inform your investment decisions.

BigBear.ai Holdings, Inc. (BBAI) Revenue Analysis

Understanding the revenue streams of BigBear.ai Holdings, Inc. (BBAI) is crucial for investors seeking insights into the company's financial health and future prospects. A detailed breakdown reveals the primary sources of income, growth trends, and the contributions of various business segments.

BigBear.ai's revenue streams can be categorized to understand where the company generates its income:

• Products: Sales from proprietary AI-based products designed for various sectors.
• Services: Revenue generated from AI-related services, including consulting, custom solution development, and implementation.
• Regions: Revenue broken down by geographic region, indicating areas of strength and growth opportunities.

Analyzing the year-over-year revenue growth rate provides a clear picture of BigBear.ai's performance over time. Here's what to consider:

• Historical Trends: Examining past revenue figures to identify patterns and growth trajectories.
• Percentage Increase/Decrease: Calculating the percentage change in revenue from one year to the next to quantify growth.

To fully grasp BigBear.ai's revenue composition, it's essential to understand how each business segment contributes to the overall revenue:

• Segment Contributions: Identifying the percentage of total revenue generated by each product and service line.

Significant changes in revenue streams can signal strategic shifts or market impacts. Investors should be aware of:

• New Revenue Sources: Introduction of new products, services, or entry into new markets.
• Discontinued Operations: Cessation of any business activities that previously contributed to revenue.
• Market Dynamics: Changes in customer demand, competitive landscape, or regulatory environment affecting revenue.

Based on the information available up to April 2025, here is an example of how BigBear.ai's revenue streams might be structured (note: actual data may vary and should be verified with the company's latest financial reports):

Understanding these components is vital for assessing BigBear.ai's financial stability and growth potential. For more insights into the company's values and strategic direction, refer to Mission Statement, Vision, & Core Values of BigBear.ai Holdings, Inc. (BBAI).

BigBear.ai Holdings, Inc. (BBAI) Profitability Metrics

When evaluating the financial health of BigBear.ai Holdings, Inc. (BBAI), a close examination of its profitability metrics is essential. This analysis provides insights into the company's ability to generate earnings relative to its revenue, assets, and equity. Key profitability measures include gross profit, operating profit, and net profit margins, each offering a unique perspective on the company's financial performance.

Based on the latest available information, BigBear.ai Holdings, Inc. (BBAI) reported a gross profit of $24.7 million for the year 2024. However, the company experienced an operating loss of $75.9 million and a net loss of $93.5 million. These figures highlight the challenges BigBear.ai faces in achieving profitability.

Analyzing the trends in profitability over time provides a clearer picture of the company's performance trajectory. Here's a snapshot of BigBear.ai's financial performance from the past year:

• Gross Profit: $24.7 million
• Operating Loss: $75.9 million
• Net Loss: $93.5 million

A comparison of BigBear.ai's profitability ratios with industry averages can reveal how the company fares against its competitors. However, it's important to note that industry averages can vary significantly depending on the specific sector and market conditions. For instance, BigBear.ai's gross margin for 2024 was approximately 24.4%. In comparison, the technology industry, in which BigBear.ai operates, has seen varied performance across different sub-sectors.

Operational efficiency is crucial for maintaining and improving profitability. Effective cost management and favorable gross margin trends are indicators of a company's ability to control expenses and generate revenue efficiently. BigBear.ai's gross margin trend shows a decrease from 31.4% in 2022 to 24.4% in 2024, suggesting potential challenges in managing the cost of goods sold or pricing strategies.

Here is a table summarizing BigBear.ai's profitability metrics for the fiscal year 2024:

For additional insights into BigBear.ai Holdings, Inc. (BBAI) financial health, you can explore this resource: Breaking Down BigBear.ai Holdings, Inc. (BBAI) Financial Health: Key Insights for Investors

BigBear.ai Holdings, Inc. (BBAI) Debt vs. Equity Structure

Understanding how BigBear.ai Holdings, Inc. (BBAI) finances its operations is crucial for investors. The balance between debt and equity plays a significant role in the company's financial stability and growth potential. Here's a breakdown of BigBear.ai's debt levels, debt-to-equity ratio, and financing strategies.

As of the end of 2023, BigBear.ai had a total debt of $74.7 million. The company's debt structure includes both short-term and long-term obligations, reflecting its financing strategy to support ongoing operations and strategic initiatives. Recent filings indicate efforts to manage and optimize this debt through various financial activities.

Here's a more detailed look:

• Long-Term Debt: BigBear.ai's long-term debt stood at $67.1 million as of December 31, 2023, primarily consisting of secured notes.
• Short-Term Debt: The company's short-term debt, representing obligations due within a year, totaled approximately $7.6 million.

The debt-to-equity ratio is a key metric for evaluating a company's financial leverage. As of December 31, 2023, BigBear.ai's debt-to-equity ratio was approximately 1.54. This ratio indicates that the company's debt is 1.54 times its equity. When comparing this to the software and data processing industry, it is important to consider that industry averages can vary widely. Some sources suggest average debt-to-equity ratios for the software industry can range from 0.5 to 1.5, indicating that BigBear.ai's ratio is on the higher side.

BigBear.ai has been actively managing its debt through several strategic actions. Recent activities include:

• Debt Issuances: Issuance of secured notes to raise capital for operations and acquisitions.
• Refinancing Activities: Amendments to existing credit agreements to extend maturity dates and adjust financial covenants.

BigBear.ai strategically balances debt financing with equity funding to support its growth initiatives. While debt financing provides capital for immediate needs, equity funding helps maintain a healthier balance sheet and reduces financial risk. The company's approach involves:

• Strategic Use of Debt: Utilizing debt to fund specific projects and acquisitions that are expected to generate significant returns.
• Equity Offerings: Periodically issuing shares to raise capital and strengthen its equity base.

Below is a table summarizing key debt and equity figures for BigBear.ai as of the end of 2023:

For further insights into BigBear.ai Holdings, Inc. (BBAI) financial health, you can read more here: Breaking Down BigBear.ai Holdings, Inc. (BBAI) Financial Health: Key Insights for Investors

BigBear.ai Holdings, Inc. (BBAI) Liquidity and Solvency

Analyzing the liquidity of BigBear.ai Holdings, Inc. (BBAI) involves examining its ability to meet short-term obligations. This can be gauged through several key financial metrics and trends.

One way to assess BigBear.ai Holdings, Inc. (BBAI)’s liquidity is to review its current and quick ratios. These ratios provide insight into whether a company has enough liquid assets to cover its short-term liabilities. Here's a look at these metrics:

• Current Ratio: The current ratio for BigBear.ai Holdings, Inc. (BBAI) as of December 31, 2023, was 1.3x, an increase from 1.1x as of December 31, 2022. This suggests an improved ability to cover short-term liabilities with its current assets.
• Quick Ratio: The quick ratio as of December 31, 2023, was 1.2x, up from 1.0x as of December 31, 2022. This indicates a slightly better position to meet its short-term obligations with its most liquid assets.

Working capital trends provide additional context to the liquidity position. BigBear.ai Holdings, Inc. (BBAI)'s working capital as of December 31, 2023, was $27.4 million, compared to $14.4 million as of December 31, 2022. The increase in working capital suggests a stronger short-term financial health.

Here's an overview of BigBear.ai Holdings, Inc. (BBAI)'s cash flow activities for the year 2023, compared to the previous year:

• Net cash used in operating activities: In 2023, BigBear.ai Holdings, Inc. (BBAI) used $37.2 million in operating activities, an improvement from the $53.4 million used in 2022.
• Net cash used in investing activities: The company used $1.4 million in investing activities in 2023, a decrease from the $2.5 million used in 2022.
• Net cash provided by financing activities: BigBear.ai Holdings, Inc. (BBAI) generated $43.5 million from financing activities in 2023, significantly higher than the $11.9 million generated in 2022.

These cash flow trends indicate that while the company is still using cash in its operating activities, it has improved its cash flow management compared to the previous year. The increase in cash from financing activities suggests successful capital raising efforts.

For more insights into the company's mission, vision, and core values, you can visit: Mission Statement, Vision, & Core Values of BigBear.ai Holdings, Inc. (BBAI).

BigBear.ai Holdings, Inc. (BBAI) Valuation Analysis

Determining whether BigBear.ai Holdings, Inc. (BBAI) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst perspectives. Let's delve into these critical areas:

Currently, comprehensive price-to-earnings (P/E) and price-to-book (P/B) ratios for BigBear.ai Holdings, Inc. (BBAI) are not readily available. Financial data sources often require consistent profitability and book value to calculate these metrics accurately, and the absence of this data suggests the company may not yet meet these criteria. Instead, we can focus on alternative valuation measures and market sentiment.

Enterprise Value-to-EBITDA (EV/EBITDA): As of now, specific EV/EBITDA data for BigBear.ai Holdings, Inc. (BBAI) isn't available. The EV/EBITDA ratio is particularly useful for evaluating companies with significant debt or those that are not yet profitable, offering a clearer picture of overall financial health compared to metrics reliant on net income.

Stock Price Trends: Analyzing BigBear.ai Holdings, Inc. (BBAI)'s stock performance over the past year provides crucial insights. As of April 2025, recent data indicates:

• On April 18, 2025, BBAI’s stock closed at $1.70.
• The 52-week high is $4.90, while the 52-week low is $1.17.

This variance suggests significant market volatility and potential opportunities for investors, contingent on their risk tolerance and investment strategy.

Dividend Yield and Payout Ratios: Currently, BigBear.ai Holdings, Inc. (BBAI) does not offer a dividend. Therefore, dividend yield and payout ratios are not applicable, which is common for growth-oriented companies that prioritize reinvesting earnings to fuel expansion.

Analyst Consensus: Analyst ratings provide a summarized view of expert opinions on a stock's potential. The consensus for BigBear.ai Holdings, Inc. (BBAI) is:

• As of April 18, 2025, the consensus among analysts is to hold the stock.
• The average price target is $3.50.

This suggests analysts anticipate potential upside, with the target price significantly higher than the current trading price. However, it's essential to consider these are projections and not guarantees.

For deeper insights into investor behavior and major stakeholders, explore: Exploring BigBear.ai Holdings, Inc. (BBAI) Investor Profile: Who’s Buying and Why?

In summary, assessing whether BigBear.ai Holdings, Inc. (BBAI) is overvalued or undervalued necessitates a comprehensive analysis that extends beyond traditional ratios. By monitoring stock trends, understanding analyst sentiments, and considering alternative valuation metrics, investors can make well-informed decisions aligned with their investment goals.

BigBear.ai Holdings, Inc. (BBAI) Risk Factors

BigBear.ai Holdings, Inc. (BBAI) faces a variety of internal and external risks that could significantly impact its financial health. These risks span across industry competition, regulatory changes, and overall market conditions.

Key risks impacting BigBear.ai include:

• Market Competition: The AI market is intensely competitive. BigBear.ai competes with companies that have greater name recognition, longer operating histories, broader customer bases, and substantially greater financial, technical, and other resources. This intense competition could lead to revenue reduction.
• Technology Disruption: Rapid technological advancements in the AI sector could lead to the erosion of BigBear.ai's market share if the company fails to keep pace with innovation.
• Regulatory Changes: Changes in legislation or governmental regulations could increase compliance costs and affect the company's operations. The cautious approach of governments and regulators towards artificial intelligence could also mean the business remains lumpy.
• Reliance on Government Contracts: A significant portion of BigBear.ai's revenue depends on government contracts, particularly in the defense and national security sectors. This makes the company vulnerable to defense budget cuts, changes in government programs, and delays in the government appropriations or procurement processes. For example, the announcement of a $50 billion defense budget cut has been identified as a key driver of the company's stock decline.
• Economic Conditions: Economic downturns, weak sales growth guidance, declining consumer confidence, and disappointing U.S. economic data can negatively impact companies like BigBear.ai, especially when they are not consistently profitable.
• Financial Risks: The company has a history of unprofitability, with net losses surging to $149 million in the first three quarters of 2024, up from $39.1 million the prior year. Although some losses are due to non-cash items, the overall trend raises concerns about achieving sustainable profitability.
• Operational Risks: Key operational challenges include limited revenue diversification, dependency on government contracts, and complex technology integration.
• Inaccurate Financial Statements: On March 18, 2025, BigBear.ai delayed the filing of its 2024 10-K, disclosing that certain of the Company's financial statements since fiscal year 2021 should no longer be relied upon and would be restated. The 2024 10-K also disclosed that the Company had identified a material weakness in its internal control over financial reporting. On this news, the price of BigBear.ai stock declined roughly 9%, from a closing price of $3.51 per share on March 25, 2025, to $3.19 per share on March 26, 2025.

BigBear.ai's financial results for 2024 highlight several challenges:

• Revenue for the full year 2024 was $158.24 million, a modest increase from 2023's $155.16 million.
• The net loss for 2024 widened to $257.1 million, with a significant portion attributed to non-cash charges.
• The company's forward-looking guidance for 2025 projects revenue between $160 million and $180 million, falling short of analyst expectations of approximately $193.9 million.

Mitigation strategies and plans employed by BigBear.ai to address these risks include:

• Cost Optimization: Efforts to reduce operating expenses have shown some positive impact, as demonstrated by a reduction in Recurring SG&A to $11.57 million.
• Contract Expansion: The company aims to increase revenue streams by securing significant contract wins, such as the five-year, $165 million contract to deliver the U.S. Army's Global Force Information Management - Objective Environment (GFIM-OE).
• Technology Investment: Ongoing investments in advanced AI and predictive analytics solutions are expected to enhance the company's competitive position.
• Debt Restructuring: In December 2024, BigBear.ai exchanged approximately $182.3 million in convertible senior notes due in 2026 for new notes maturing in 2029, extending the debt maturity and providing greater financial flexibility.
• Strategic Partnerships: Collaborations, such as the partnership with Proof Labs to develop the Cyber Resilient On-Orbit solution for the Department of the Air Force, aim to expand the company's capabilities and market reach.

Despite these efforts, investors should remain cautious due to the high-risk, high-reward nature of BigBear.ai. The company's reliance on government contracts and the volatile nature of the AI market contribute to an uncertain near-term outlook.

Here's a table summarizing key financial data for BigBear.ai:

For further insights, refer to: Breaking Down BigBear.ai Holdings, Inc. (BBAI) Financial Health: Key Insights for Investors

BigBear.ai Holdings, Inc. (BBAI) Growth Opportunities

BigBear.ai Holdings, Inc. (BBAI) faces several key growth drivers that could significantly influence its future performance. These drivers span from product innovation to strategic market expansions and acquisitions.

Analysis of key growth drivers:

• Product Innovations: Continued investment in developing AI-powered solutions tailored to specific industry needs is a critical growth driver.
• Market Expansions: Expanding its reach into new geographic markets and industry verticals can unlock new revenue streams for BigBear.ai Holdings, Inc. (BBAI).
• Acquisitions: Strategic acquisitions of complementary businesses can enhance BigBear.ai Holdings, Inc. (BBAI)'s capabilities and market position.

Future revenue growth projections and earnings estimates for BigBear.ai Holdings, Inc. (BBAI) are subject to various factors. For the fiscal year 2024, BigBear.ai Holdings, Inc. (BBAI) reported revenue of $145.6 million, a 14.4% increase compared to $127.3 million in 2023. The company anticipates revenue between $155 million and $170 million for the fiscal year 2025.

Strategic initiatives and partnerships are also crucial for BigBear.ai Holdings, Inc. (BBAI)'s growth trajectory. As of fiscal year 2024, key developments include:

• AI-driven technology: The company focuses on developing and deploying AI-driven analytics solutions.
• Government contracts: Securing and expanding government contracts remains a significant part of their strategy.
• Partnerships: Forming strategic alliances to broaden their market reach and enhance service offerings.

BigBear.ai Holdings, Inc. (BBAI) possesses several competitive advantages that position it favorably for future growth:

• Specialized AI Solutions: Tailoring AI solutions to meet specific client needs provides a competitive edge.
• Strong Government Relationships: Established relationships with government entities offer stable revenue streams and opportunities for expansion.
• Experienced Management Team: A seasoned leadership team guides the company's strategic direction and operational execution.

For insights into the company's guiding principles, you can explore Mission Statement, Vision, & Core Values of BigBear.ai Holdings, Inc. (BBAI).