NYSE:BBAI BigBear.ai Q1 2025 Earnings Report $3.37 +0.03 (+0.90%) Closing price 05/2/2025 03:59 PM EasternExtended Trading$3.36 0.00 (-0.15%) As of 05/2/2025 07:59 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast BigBear.ai EPS ResultsActual EPS-$0.10Consensus EPS -$0.06Beat/MissMissed by -$0.04One Year Ago EPS-$0.67BigBear.ai Revenue ResultsActual Revenue$34.76 millionExpected Revenue$36.26 millionBeat/MissMissed by -$1.51 millionYoY Revenue Growth+4.90%BigBear.ai Announcement DetailsQuarterQ1 2025Date5/1/2025TimeAfter Market ClosesConference Call DateThursday, May 1, 2025Conference Call Time4:30PM ETConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Earnings HistoryCompany ProfilePowered by BigBear.ai Q1 2025 Earnings Call TranscriptProvided by QuartrMay 1, 2025 ShareLink copied to clipboard.There are 4 speakers on the call. Operator00:00:00Greetings, 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. Operator00:00:22You may begin. Speaker 100:00:24Thank you all for joining today for our first quarter twenty twenty five earnings call. I'm joined today by our CEO, Kevin McAleenan and our CFO, Julia Heifer. During the call today, we may make certain forward looking statements. Listeners are cautioned not to put undue reliance on forward looking statements and Big Bear specifically disclaims any obligation to update the forward looking statements that may be discussed during this call. Many factors could cause actual events to differ materially from those forward looking statements, statements that are based on current expectations and assumptions, and as a result are subject to risk and uncertainty. Speaker 100:01:08For more information about these risks and uncertainties, please refer to the forward looking statements section of the earnings press release, which we do today on our SEC filings. We will also discuss some non GAAP financial measures during the call These non GAAP financial measures should not be considered a replacement for and should be read together with GAAP results. You can find the GAAP and non GAAP reconciliations within our earnings release. Let me now turn it over to Kevin. Speaker 200:01:40Thank you, David, and good afternoon, everyone. It's a privilege to be speaking with you for the first time as CEO of BigBear AI. I'm honored to be leading this company at such a pivotal time and excited to share with you how we are positioning BigBear AI for sustainable growth and long term performance and value. Today, I'll start by introducing myself and sharing my perspective on the market and our company. I'll walk through our strategic priorities for 2025, and I'll highlight our progress so far this year, both in terms of growth and key operational improvements. Speaker 200:02:14Julie will then review our financial results for the first quarter, and I'll provide some brief closing thoughts. Before we begin, a note on our new format for our earnings process. As we begin this next chapter in BigBerry Eyes growth, you will notice an evolution in the way we communicate. We are committed to providing more context, greater transparency, and a sharper focus on aligning with all of our stakeholders, our shareholders, our employees, our customers, and our partners. This approach reflects our sense of accountability to the missions we serve, our excitement to share how we are tackling opportunities, and our desire to involve our stakeholders in the path to the long term success of Big Bear AI. Speaker 200:02:55Let me start by sharing a bit about my background and how it shapes my leadership philosophy at Big Bear AI. During my time leading operational government organizations at US Customs and Border Protection and later the Department of Homeland Security, I saw firsthand the power of equipping teams with the right tools and technology, clear direction, and strong support to succeed in complex high stakes environments. Those experiences taught me that technological innovation is critical, but alone, it is not enough. Success comes when technology is fused with operational expertise and a deep understanding of the problem at hand. That belief in the right approach to innovation is what drew me to this critical area of the private sector. Speaker 200:03:37I'm convinced that sustaining American economic dynamism and security requires the unique blend of deep subject matter expertise and cutting edge innovation, applying artificial intelligence and advanced technologies in areas as important as national security and critical infrastructure. It was with that conviction that I co founded Panjiem, a company dedicated to solving real world problems at the intersection of AI and security. When Panjiem was acquired by BigBear AI, I had the opportunity to continue that mission at a larger scale. Over the past year as president of Big Bear AI, I worked closely with our teams, customers, and partners, and that experience has only deepened my belief in the company's potential and purpose. That same commitment and mission driven innovation will guide my approach as I now lead the company as CEO. Speaker 200:04:26At BigBear AI, we are uniquely positioned at the convergence of artificial intelligence, national security, and critical infrastructure. We have a strong foundation of trust with some of the most demanding customers in the world. Our team of over 600 professionals combined exceptional technical capabilities with a deep shared sense of mission and purpose. I could not be more excited to serve along our outstanding team. Turning to the broader market environment, we are operating at a time of profound change. Speaker 200:04:56Change that is creating significant new opportunities, but also challenges and transition turbulence. First, the global security environment is driving a renewed focus and investment in defense technology, creating opportunities to capitalize on American AI innovation to safeguard our security and national interests and those of our allies and partners. Second, there are fundamental transitions underway in global trade, creating demand for smarter, more resilient supply chains, powered by automation and dynamic decision making tools to support the reshoring of key manufacturing sectors, modernization of critical infrastructure, and new trading relationships. Third, the imperative to increase efficiency of operations through technological modernization is being approached with growing urgency across both government and industry, setting the stage for rapid development of new commercial solutions and accelerated technology deployment and implementation of both interoperable and secure open architecture solutions. And importantly, we are starting to see a shift in federal procurement practices with an increased emphasis on efficiency and the adoption of advanced commercial technologies. Speaker 200:06:08Across all of these trends, one thing is clear. Government and enterprise customers are no longer simply buying software. They're seeking to solve their critical problems with tailored solutions. That is precisely the space where Big Bear AI excels. One of the reasons I'm excited about our path forward is that Big Bear AI is positioned with intention to support and capitalize on these trends. Speaker 200:06:33These beliefs about the structural shifts in the market inform the values and principles that shape how we operate, where we invest, and how we lead. At BigBear AI, we are responding to the macro dynamics with deliberate strategic focus. That's why as I stepped into this role, I've been centered on a few core tenants that reflect both the demand of the current environment and the opportunities we say ahead. First, mission expertise. We believe our deep experience embedded with supporting national security and critical infrastructure customers we serve is our true competitive edge. Speaker 200:07:06We recruit professionals who have lived the missions we serve and equip them with the technology and tools to help enhance them. By bringing operators and technologists together, we are building flexible, mission driven solutions that can adapt and scale at the pace of technology innovation. Second, international growth. We see a vital opportunity to extend American innovation to our allies and partners around the world. In an era of intensifying technological competition, we have the opportunity and responsibility to ensure American developed AI technologies are deployed where they can strengthen global stability and shared security. Speaker 200:07:44Third, business alliances and partnerships. We will pursue collaborations and remain open to strategic acquisitions that enable us to innovate faster, grow into new areas, and deliver greater value to our customers. And finally, relentless innovation in AI. We're focused on delivering mission ready AI, operationalizing artificial intelligence in the real world to enable human machine teaming and bring cutting edge technologies to the point of decision in ways that are timely, adaptable, and integrated. Building on these anchors, our growth strategy for 2025 is focused on a clear dual mandate, strengthen within our core markets where we have proven success while expanding selectively into high potential adjacencies where our expertise and technology provide a competitive edge. Speaker 200:08:35In our core markets, we are continuing to deepen our leadership. In border security, travel, and trade, we continue to support border security missions at the Department of Homeland Security, and we are expanding AI infrastructure at major US and partner nation gateways. Our ability to integrate federal and commercial solutions through the Pangaea portfolio gives us a powerful advantage, creating better, faster solutions for both mission sets. In defense and intelligence, we are orchestrating AI at the mission edge, sourcing and fusing critical data and delivering actionable insights directly to the point of need, integrating with emerging AI operating systems and connecting diverse sensor types to fuse operational data. In manufacturing and supply chain, we are well positioned to help modernize the American industrial base and streamline global supply chains. Speaker 200:09:25Our goal is to improve visibility into challenges, accelerate decision making, and unlock efficiency gains, particularly in critical sectors like shipbuilding. At the same time, we are strategically expanding into new markets. Internationally, we are focused on converting successful pilots into enduring programs, monetizing R and D where export of American innovation is in our national interest and where our national partnerships are strongest and starting to build regional go to market partnerships with leading companies. Domestically, we are pursuing adjacencies that leverage our core competencies. For example, adapting technologies built for one federal agency's needs to address similar challenges in another or introducing innovations developed for the commercial sector into government and vice versa. Speaker 200:10:13Our growth is accelerated by a portfolio of technologies, including commercial and software solutions like Pangea Threat Detection, Veriscan, True Face, ProModel AI, ConductorOS, and Shipyard AI, and a suite of underlying assets from computer vision models to data pipelines. Additionally, we believe that a collaborative approach is critical given the pace of innovation and the variety of mission sets we seek to serve. We are focused on working with strategic partners through alliances and joint ventures, and we'll also consider strategic acquisitions, giving us the ability to move swiftly, precisely and with a shared risk in a complex dynamic market. As we enter the second quarter, we are seeing early and encouraging signs that our strategic focus is resonating, particularly in sectors where we built deep relationships, have a clear understanding of the mission, and are deploying proven technologies. The national security was secured a significant new contract to deliver and maintain the Department of Defense Joint Staff j thirty five's Orion decision support platform. Speaker 200:11:17This award is a powerful validation of our AI capabilities and their direct alignment with mission critical needs at the highest levels of defense decision making. In manufacturing and shipbuilding, we are deepening our partnerships with key industry players like Austell USA, demonstrating our solutions can drive meaningful impact in industries that are most critical to American interests. On the border and travel security front, we successfully deployed advanced AI solutions at major points of entry and exit, including US airports like Dallas Fort Worth and Denver International Airport, enhancing operational efficiency and traveler experience while strengthening security postures. We're also proud to support enhanced primary processing for arrivals at Los Angeles International Airport and the Port Of Seattle. Internationally, we are beginning to see results from our increased focus. Speaker 200:12:07Our collaboration with Smith Detection on applying Big Bear AI automated prohibited item detection using advanced algorithms and integrated with computed tomography scanners is a prime example, unlocking new international distribution channels for our threat detection technologies and helping us accelerate our reach in the global security markets. Given the progress we're seeing across these areas, we are confident in our strategy and we are reaffirming our twenty twenty five full year guidance. We recognize that we are operating in an exceptionally dynamic business and macroeconomic environment, which creates opportunity, but also potential short term risks. Among these changes in federal procurement processes and government efficiency efforts are creating temporary variability, including delays in funding and award timing. We remain focused on capitalizing on this dynamic market and driving disciplined sustained execution. Speaker 200:13:03Now, me turn it over to Julie to share our financial results for this quarter. Speaker 300:13:08Thank you, Kevin. Now let's turn to our first quarter results. As we have stated in the past, it's important to reemphasize that our revenue can be lumpy and can fluctuate meaningfully depending on the quarter in which contracts are awarded, milestones achieved or contracts complete. Revenue for the quarter was 34,800,000.0, up 5% year on year compared to 33,100,000.0 in the first quarter of twenty twenty four. This is primarily driven by additional revenue from the Department of Homeland Security and digital identity awards, including products such as Veriscan and True Face. Speaker 300:13:44Gross profit for the quarter is up 6% from 7,000,000 in first quarter of twenty twenty four to 7,400,000.0 in first quarter of twenty twenty five. Gross margin was 21.3% this quarter, which is a slight improvement from 21.1 in Q1 twenty twenty four. Lower reported gross margin in both periods are impacted by higher annual incentive compensation that was settled in the form of stock awards issued in the first quarter, resulting in higher stock based compensation, non cash expense. If you look at adjusted gross margin, which removes the impact of equity compensation, it shows 28.6% in the first quarter of twenty twenty five versus 29.1 in Q1 of twenty twenty four. Year over year, our R and D spend is up $3,000,000 as we continue to invest in innovation and technology as you have seen over the last few quarters. Speaker 300:14:40We have recently progressed some R and D projects into general availability. Therefore, have fewer projects being capitalized as part of the development cycle in Q1 of twenty twenty five. Net loss in the first quarter of twenty twenty five was 62,000,000 compared to the net loss of 127,800,000.0 in the first quarter of twenty twenty four. The primary drivers of change in net loss were all non cash items. In the first quarter of twenty twenty four, we booked goodwill impairment charges of 85,000,000 and this was not repeated in the first quarter of twenty twenty five. Speaker 300:15:17This is partially offset by higher non cash losses on the increase in the fair value of derivatives of $9,500,000 from 23,800,000.0 in Q1 of twenty twenty four to 33,300,000.0 in Q1 of twenty twenty five. We were also recognized non cash losses on debt extinguishment of 2,600,000.0 during the first quarter of twenty twenty five related to voluntary conversions by holders of the convertible notes due in 2029. And finally, non cash stock based compensation expense was higher in Q1 of twenty twenty five versus Q1 of twenty twenty four by $2,200,000. Now, turning to adjusted EBITDA. It was a negative, this was negative $7,000,000 for the first quarter of twenty twenty five compared to negative 1,600,000.0 in the first quarter of twenty twenty four, primarily driven by increased R and D expense and recurring SG and A due to the government funding delays, creating excess resource capacity. Speaker 300:16:16Our backlog was $385,000,000 at the end of the first quarter, which is up thirty percent and $89,000,000 compared to Q1 of twenty twenty four, indicating continued customer confidence in our solutions and long term value proposition. And finally, I want to reinforce the renewed strength of our balance sheet and improved debt position. As shared last quarter, we made significant progress during Q1 to improve our cash position. We ended Q1 with $108,000,000 in cash and cash equivalents, up from 81,000,000 in Q1 of twenty twenty four and 50,000,000 at the end of twenty twenty four. The cash position provides us with increased financial flexibility to strategically invest, navigate market uncertainties and drive long term value for our shareholders. Speaker 300:17:03Our debt position has materially reduced during Q1 as several of our twenty twenty nine note holders opted to convert into equity during Q1 resulting in a reduction of $58,000,000 of debt in the period. The outstanding principal on our convertible notes is 142,000,000 at the end of this quarter, down from 200,000,000 at the end of twenty twenty four. These new 2029 notes also provide us with the optionality to settle future interest payments in stock or in cash at our election. This gives us improved financial flexibility and gives us the ability to execute with confidence and discipline as we look ahead. As we mentioned last quarter, we will continue to be responsible with our strength and balance sheet. Speaker 300:17:46We will look to allocate capital only towards projects that aim to provide material improvement to our shareholder return. And now back to Kevin for a few closing remarks. Speaker 200:17:56Thank you, Julie. As we've shown today, we are positioning Big Bear for the long term. And as we reaffirm our guidance for the full year, I'd like to remind everyone of three key building blocks of the business today. I'd like to highlight our financial foundation as we did in last quarter's CEO letter. We closed the quarter with 108,000,000 in cash and cash equivalents. Speaker 200:18:16This is a result of deliberate steps taken to strengthen our balance sheet, enhance liquidity, and preserve the strategic flexibility we need to navigate near term uncertainty while still investing decisively in our future growth. The strong financial footing allows us to be selective, patient and opportunistic. Second, our backlog and pipeline remain healthy, closing the first quarter with a backlog of $385,000,000. We're taking a long view with our backlog and pipeline and focusing on building a portfolio of large multi year programs and deep commercial relationships that provide stable compounding value over time. Third, innovation remains at the core of our identity. Speaker 200:18:56We are continuing to blend internal r and d with customer funded development while expanding our innovation ecosystem through partnerships that allow us to access cutting edge technologies and talent across sectors. At BigBear AI, we are building a durable, high impact company at the forefront of AI enabled national security and critical infrastructure modernization. We are doing so with focus, with urgency, and with a foundation that is designed to deliver lasting value for our customers, our partners, our employees, and our shareholders. Thank you for your time today on our first quarter call. Operator00:19:33Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallBigBear.ai Q1 202500:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K) BigBear.ai Earnings HeadlinesBBAI FRAUD NOTICE: BigBear.ai Holdings, Inc. (NYSE:BBAI) Investors may have been affected by Fraud -- Contact BFA Law by June 10 Court DeadlineMay 3 at 7:18 AM | globenewswire.comBigBear.ai Earnings Call: Mixed Sentiment with Growth and ChallengesMay 2 at 9:48 PM | tipranks.comTrump wipes out trillions overnight…Is there anybody more powerful than Donald Trump right now? In a single tariff announcement, he wiped out nearly $5 trillion in wealth from the S&P 500 and $6.4 trillion from the Dow Jones… Not to mention the countless trillions of dollars lost in every market around the world… leaving the major political powers scrambling in fear of Trump’s next move.May 3, 2025 | Porter & Company (Ad)Lost Money on BigBear.ai Holdings, Inc.(BBAI)? Join Class Action Suit Seeking Recovery – Contact Levi & KorsinskyMay 2 at 2:09 PM | globenewswire.comBigBear.ai Announces First Quarter 2025 Results; Affirms 2025 OutlookMay 2 at 9:50 AM | finance.yahoo.comJune 10, 2025 Deadline: Contact Levi & Korsinsky to Join Class Action Suit Against BBAIMay 2 at 5:45 AM | prnewswire.comSee More BigBear.ai Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like BigBear.ai? Sign up for Earnings360's daily newsletter to receive timely earnings updates on BigBear.ai and other key companies, straight to your email. Email Address About BigBear.aiBigBear.ai (NYSE:BBAI) provides artificial intelligence-powered decision intelligence solutions. It offers national security, supply chain management, and digital identity and biometrics solutions. 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There are 4 speakers on the call. Operator00:00:00Greetings, 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. Operator00:00:22You may begin. Speaker 100:00:24Thank you all for joining today for our first quarter twenty twenty five earnings call. I'm joined today by our CEO, Kevin McAleenan and our CFO, Julia Heifer. During the call today, we may make certain forward looking statements. Listeners are cautioned not to put undue reliance on forward looking statements and Big Bear specifically disclaims any obligation to update the forward looking statements that may be discussed during this call. Many factors could cause actual events to differ materially from those forward looking statements, statements that are based on current expectations and assumptions, and as a result are subject to risk and uncertainty. Speaker 100:01:08For more information about these risks and uncertainties, please refer to the forward looking statements section of the earnings press release, which we do today on our SEC filings. We will also discuss some non GAAP financial measures during the call These non GAAP financial measures should not be considered a replacement for and should be read together with GAAP results. You can find the GAAP and non GAAP reconciliations within our earnings release. Let me now turn it over to Kevin. Speaker 200:01:40Thank you, David, and good afternoon, everyone. It's a privilege to be speaking with you for the first time as CEO of BigBear AI. I'm honored to be leading this company at such a pivotal time and excited to share with you how we are positioning BigBear AI for sustainable growth and long term performance and value. Today, I'll start by introducing myself and sharing my perspective on the market and our company. I'll walk through our strategic priorities for 2025, and I'll highlight our progress so far this year, both in terms of growth and key operational improvements. Speaker 200:02:14Julie will then review our financial results for the first quarter, and I'll provide some brief closing thoughts. Before we begin, a note on our new format for our earnings process. As we begin this next chapter in BigBerry Eyes growth, you will notice an evolution in the way we communicate. We are committed to providing more context, greater transparency, and a sharper focus on aligning with all of our stakeholders, our shareholders, our employees, our customers, and our partners. This approach reflects our sense of accountability to the missions we serve, our excitement to share how we are tackling opportunities, and our desire to involve our stakeholders in the path to the long term success of Big Bear AI. Speaker 200:02:55Let me start by sharing a bit about my background and how it shapes my leadership philosophy at Big Bear AI. During my time leading operational government organizations at US Customs and Border Protection and later the Department of Homeland Security, I saw firsthand the power of equipping teams with the right tools and technology, clear direction, and strong support to succeed in complex high stakes environments. Those experiences taught me that technological innovation is critical, but alone, it is not enough. Success comes when technology is fused with operational expertise and a deep understanding of the problem at hand. That belief in the right approach to innovation is what drew me to this critical area of the private sector. Speaker 200:03:37I'm convinced that sustaining American economic dynamism and security requires the unique blend of deep subject matter expertise and cutting edge innovation, applying artificial intelligence and advanced technologies in areas as important as national security and critical infrastructure. It was with that conviction that I co founded Panjiem, a company dedicated to solving real world problems at the intersection of AI and security. When Panjiem was acquired by BigBear AI, I had the opportunity to continue that mission at a larger scale. Over the past year as president of Big Bear AI, I worked closely with our teams, customers, and partners, and that experience has only deepened my belief in the company's potential and purpose. That same commitment and mission driven innovation will guide my approach as I now lead the company as CEO. Speaker 200:04:26At BigBear AI, we are uniquely positioned at the convergence of artificial intelligence, national security, and critical infrastructure. We have a strong foundation of trust with some of the most demanding customers in the world. Our team of over 600 professionals combined exceptional technical capabilities with a deep shared sense of mission and purpose. I could not be more excited to serve along our outstanding team. Turning to the broader market environment, we are operating at a time of profound change. Speaker 200:04:56Change that is creating significant new opportunities, but also challenges and transition turbulence. First, the global security environment is driving a renewed focus and investment in defense technology, creating opportunities to capitalize on American AI innovation to safeguard our security and national interests and those of our allies and partners. Second, there are fundamental transitions underway in global trade, creating demand for smarter, more resilient supply chains, powered by automation and dynamic decision making tools to support the reshoring of key manufacturing sectors, modernization of critical infrastructure, and new trading relationships. Third, the imperative to increase efficiency of operations through technological modernization is being approached with growing urgency across both government and industry, setting the stage for rapid development of new commercial solutions and accelerated technology deployment and implementation of both interoperable and secure open architecture solutions. And importantly, we are starting to see a shift in federal procurement practices with an increased emphasis on efficiency and the adoption of advanced commercial technologies. Speaker 200:06:08Across all of these trends, one thing is clear. Government and enterprise customers are no longer simply buying software. They're seeking to solve their critical problems with tailored solutions. That is precisely the space where Big Bear AI excels. One of the reasons I'm excited about our path forward is that Big Bear AI is positioned with intention to support and capitalize on these trends. Speaker 200:06:33These beliefs about the structural shifts in the market inform the values and principles that shape how we operate, where we invest, and how we lead. At BigBear AI, we are responding to the macro dynamics with deliberate strategic focus. That's why as I stepped into this role, I've been centered on a few core tenants that reflect both the demand of the current environment and the opportunities we say ahead. First, mission expertise. We believe our deep experience embedded with supporting national security and critical infrastructure customers we serve is our true competitive edge. Speaker 200:07:06We recruit professionals who have lived the missions we serve and equip them with the technology and tools to help enhance them. By bringing operators and technologists together, we are building flexible, mission driven solutions that can adapt and scale at the pace of technology innovation. Second, international growth. We see a vital opportunity to extend American innovation to our allies and partners around the world. In an era of intensifying technological competition, we have the opportunity and responsibility to ensure American developed AI technologies are deployed where they can strengthen global stability and shared security. Speaker 200:07:44Third, business alliances and partnerships. We will pursue collaborations and remain open to strategic acquisitions that enable us to innovate faster, grow into new areas, and deliver greater value to our customers. And finally, relentless innovation in AI. We're focused on delivering mission ready AI, operationalizing artificial intelligence in the real world to enable human machine teaming and bring cutting edge technologies to the point of decision in ways that are timely, adaptable, and integrated. Building on these anchors, our growth strategy for 2025 is focused on a clear dual mandate, strengthen within our core markets where we have proven success while expanding selectively into high potential adjacencies where our expertise and technology provide a competitive edge. Speaker 200:08:35In our core markets, we are continuing to deepen our leadership. In border security, travel, and trade, we continue to support border security missions at the Department of Homeland Security, and we are expanding AI infrastructure at major US and partner nation gateways. Our ability to integrate federal and commercial solutions through the Pangaea portfolio gives us a powerful advantage, creating better, faster solutions for both mission sets. In defense and intelligence, we are orchestrating AI at the mission edge, sourcing and fusing critical data and delivering actionable insights directly to the point of need, integrating with emerging AI operating systems and connecting diverse sensor types to fuse operational data. In manufacturing and supply chain, we are well positioned to help modernize the American industrial base and streamline global supply chains. Speaker 200:09:25Our goal is to improve visibility into challenges, accelerate decision making, and unlock efficiency gains, particularly in critical sectors like shipbuilding. At the same time, we are strategically expanding into new markets. Internationally, we are focused on converting successful pilots into enduring programs, monetizing R and D where export of American innovation is in our national interest and where our national partnerships are strongest and starting to build regional go to market partnerships with leading companies. Domestically, we are pursuing adjacencies that leverage our core competencies. For example, adapting technologies built for one federal agency's needs to address similar challenges in another or introducing innovations developed for the commercial sector into government and vice versa. Speaker 200:10:13Our growth is accelerated by a portfolio of technologies, including commercial and software solutions like Pangea Threat Detection, Veriscan, True Face, ProModel AI, ConductorOS, and Shipyard AI, and a suite of underlying assets from computer vision models to data pipelines. Additionally, we believe that a collaborative approach is critical given the pace of innovation and the variety of mission sets we seek to serve. We are focused on working with strategic partners through alliances and joint ventures, and we'll also consider strategic acquisitions, giving us the ability to move swiftly, precisely and with a shared risk in a complex dynamic market. As we enter the second quarter, we are seeing early and encouraging signs that our strategic focus is resonating, particularly in sectors where we built deep relationships, have a clear understanding of the mission, and are deploying proven technologies. The national security was secured a significant new contract to deliver and maintain the Department of Defense Joint Staff j thirty five's Orion decision support platform. Speaker 200:11:17This award is a powerful validation of our AI capabilities and their direct alignment with mission critical needs at the highest levels of defense decision making. In manufacturing and shipbuilding, we are deepening our partnerships with key industry players like Austell USA, demonstrating our solutions can drive meaningful impact in industries that are most critical to American interests. On the border and travel security front, we successfully deployed advanced AI solutions at major points of entry and exit, including US airports like Dallas Fort Worth and Denver International Airport, enhancing operational efficiency and traveler experience while strengthening security postures. We're also proud to support enhanced primary processing for arrivals at Los Angeles International Airport and the Port Of Seattle. Internationally, we are beginning to see results from our increased focus. Speaker 200:12:07Our collaboration with Smith Detection on applying Big Bear AI automated prohibited item detection using advanced algorithms and integrated with computed tomography scanners is a prime example, unlocking new international distribution channels for our threat detection technologies and helping us accelerate our reach in the global security markets. Given the progress we're seeing across these areas, we are confident in our strategy and we are reaffirming our twenty twenty five full year guidance. We recognize that we are operating in an exceptionally dynamic business and macroeconomic environment, which creates opportunity, but also potential short term risks. Among these changes in federal procurement processes and government efficiency efforts are creating temporary variability, including delays in funding and award timing. We remain focused on capitalizing on this dynamic market and driving disciplined sustained execution. Speaker 200:13:03Now, me turn it over to Julie to share our financial results for this quarter. Speaker 300:13:08Thank you, Kevin. Now let's turn to our first quarter results. As we have stated in the past, it's important to reemphasize that our revenue can be lumpy and can fluctuate meaningfully depending on the quarter in which contracts are awarded, milestones achieved or contracts complete. Revenue for the quarter was 34,800,000.0, up 5% year on year compared to 33,100,000.0 in the first quarter of twenty twenty four. This is primarily driven by additional revenue from the Department of Homeland Security and digital identity awards, including products such as Veriscan and True Face. Speaker 300:13:44Gross profit for the quarter is up 6% from 7,000,000 in first quarter of twenty twenty four to 7,400,000.0 in first quarter of twenty twenty five. Gross margin was 21.3% this quarter, which is a slight improvement from 21.1 in Q1 twenty twenty four. Lower reported gross margin in both periods are impacted by higher annual incentive compensation that was settled in the form of stock awards issued in the first quarter, resulting in higher stock based compensation, non cash expense. If you look at adjusted gross margin, which removes the impact of equity compensation, it shows 28.6% in the first quarter of twenty twenty five versus 29.1 in Q1 of twenty twenty four. Year over year, our R and D spend is up $3,000,000 as we continue to invest in innovation and technology as you have seen over the last few quarters. Speaker 300:14:40We have recently progressed some R and D projects into general availability. Therefore, have fewer projects being capitalized as part of the development cycle in Q1 of twenty twenty five. Net loss in the first quarter of twenty twenty five was 62,000,000 compared to the net loss of 127,800,000.0 in the first quarter of twenty twenty four. The primary drivers of change in net loss were all non cash items. In the first quarter of twenty twenty four, we booked goodwill impairment charges of 85,000,000 and this was not repeated in the first quarter of twenty twenty five. Speaker 300:15:17This is partially offset by higher non cash losses on the increase in the fair value of derivatives of $9,500,000 from 23,800,000.0 in Q1 of twenty twenty four to 33,300,000.0 in Q1 of twenty twenty five. We were also recognized non cash losses on debt extinguishment of 2,600,000.0 during the first quarter of twenty twenty five related to voluntary conversions by holders of the convertible notes due in 2029. And finally, non cash stock based compensation expense was higher in Q1 of twenty twenty five versus Q1 of twenty twenty four by $2,200,000. Now, turning to adjusted EBITDA. It was a negative, this was negative $7,000,000 for the first quarter of twenty twenty five compared to negative 1,600,000.0 in the first quarter of twenty twenty four, primarily driven by increased R and D expense and recurring SG and A due to the government funding delays, creating excess resource capacity. Speaker 300:16:16Our backlog was $385,000,000 at the end of the first quarter, which is up thirty percent and $89,000,000 compared to Q1 of twenty twenty four, indicating continued customer confidence in our solutions and long term value proposition. And finally, I want to reinforce the renewed strength of our balance sheet and improved debt position. As shared last quarter, we made significant progress during Q1 to improve our cash position. We ended Q1 with $108,000,000 in cash and cash equivalents, up from 81,000,000 in Q1 of twenty twenty four and 50,000,000 at the end of twenty twenty four. The cash position provides us with increased financial flexibility to strategically invest, navigate market uncertainties and drive long term value for our shareholders. Speaker 300:17:03Our debt position has materially reduced during Q1 as several of our twenty twenty nine note holders opted to convert into equity during Q1 resulting in a reduction of $58,000,000 of debt in the period. The outstanding principal on our convertible notes is 142,000,000 at the end of this quarter, down from 200,000,000 at the end of twenty twenty four. These new 2029 notes also provide us with the optionality to settle future interest payments in stock or in cash at our election. This gives us improved financial flexibility and gives us the ability to execute with confidence and discipline as we look ahead. As we mentioned last quarter, we will continue to be responsible with our strength and balance sheet. Speaker 300:17:46We will look to allocate capital only towards projects that aim to provide material improvement to our shareholder return. And now back to Kevin for a few closing remarks. Speaker 200:17:56Thank you, Julie. As we've shown today, we are positioning Big Bear for the long term. And as we reaffirm our guidance for the full year, I'd like to remind everyone of three key building blocks of the business today. I'd like to highlight our financial foundation as we did in last quarter's CEO letter. We closed the quarter with 108,000,000 in cash and cash equivalents. Speaker 200:18:16This is a result of deliberate steps taken to strengthen our balance sheet, enhance liquidity, and preserve the strategic flexibility we need to navigate near term uncertainty while still investing decisively in our future growth. The strong financial footing allows us to be selective, patient and opportunistic. Second, our backlog and pipeline remain healthy, closing the first quarter with a backlog of $385,000,000. We're taking a long view with our backlog and pipeline and focusing on building a portfolio of large multi year programs and deep commercial relationships that provide stable compounding value over time. Third, innovation remains at the core of our identity. Speaker 200:18:56We are continuing to blend internal r and d with customer funded development while expanding our innovation ecosystem through partnerships that allow us to access cutting edge technologies and talent across sectors. At BigBear AI, we are building a durable, high impact company at the forefront of AI enabled national security and critical infrastructure modernization. We are doing so with focus, with urgency, and with a foundation that is designed to deliver lasting value for our customers, our partners, our employees, and our shareholders. Thank you for your time today on our first quarter call. Operator00:19:33Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.Read morePowered by