BigBear.ai Q1 Earnings Call Highlights

Key Points

• BigBear.ai is doubling down on two core markets—national security and travel & trade—and reported several recent wins including a classified sole‑source contract with a ceiling of about $53 million and airport deployments at O'Hare and DFW totaling roughly $7 million, helping backlog rise 14% to $281.9 million.
• Financially, Q1 revenue was $34.4 million (flat year‑over‑year) with gross margin improving to 34% (up ~1,300 bps); net loss narrowed to $56.8 million, adjusted EBITDA was -$9.9 million, and the company reaffirmed its full‑year revenue outlook of $135–$165 million.
• Management says integrations of the Ask Sage and CargoSeer acquisitions are on track (Ask Sage launched a simpler UI and a new commercial offering; CargoSeer is rolling out invoice‑fraud detection), and the company added DHS-focused leadership including Troy Miller plus new CHRO and corporate affairs hires to accelerate go‑to‑market efforts.

BigBear.ai NYSE: BBAI executives highlighted stronger gross margins, growing backlog and recent contract wins in national security and travel and trade markets during the company’s first-quarter 2026 earnings call, while maintaining its full-year revenue outlook.

Strategy centered on national security and travel and trade

CEO Kevin McAleenan said the company remains focused on two “core markets that are growing, national security and trade and travel,” built on “deep mission understanding,” applied AI expertise and what he described as a combination of “scale and agility.” He added that BigBear.ai is implementing an “enhanced go-to-market approach” to align talent, technology development and delivery teams with “emerging customer needs where we see the greatest growth potential.”

McAleenan also referenced heightened operational demand tied to geopolitical developments, saying BigBear.ai teams supported government and commercial customers involved with the Iran conflict, including “augmenting the capabilities of warfighters,” helping businesses adjust to supply chain disruptions and supporting the Homeland Security community as threat conditions change.

Q1 contract wins and backlog growth

McAleenan outlined several customer wins during the quarter as examples of progress against the company’s top-line growth priority.

• Classified intelligence community contract: BigBear.ai signed a classified, sole-source contract as prime contractor with a ceiling value of approximately $53 million, to be executed over the next two years, according to McAleenan.
• Airport deployments: In the travel and trade market, the company is deploying capabilities under two recent contract wins at Chicago O’Hare and Dallas Fort Worth. McAleenan said the combined value of the contracts is $7 million and that they leverage the company’s BearScan and TrueFace products.
• Shipbuilding and simulation: McAleenan said BigBear.ai won two contracts tied to Shipyard AI and its ProModel simulation platform—one with Chantier Davie in Canada and another with Bollinger Shipyards in the U.S.
• Ask Sage platform customers: McAleenan said the company has won new generative AI platform contracts with NASA, the U.S. Army Intelligence and Security Command in Virginia, and the U.S. Naval Research Laboratory to use Ask Sage.

McAleenan said the company’s backlog increased 14% from the fourth quarter to $281.9 million. CFO Sean Ricker similarly reported ending backlog of about $282 million, attributing the increase primarily to new orders referenced on the call.

DHS-related developments and leadership additions

McAleenan noted changes affecting the Department of Homeland Security environment, including the March 23 confirmation of Senator Markwayne Mullin as Secretary of Homeland Security. McAleenan said Mullin has “strongly signaled his intent to enhance the pace of applying funds to projects where BigBear.ai is well-positioned to win,” adding that the company is “actively bidding live RFPs right now.”

He also said that while a partial shutdown had not affected most DHS work due to the “critical nature” of the missions supported, he expected fuller funding to “unlock the potential for new starts” and enable additional technology procurements.

McAleenan also announced that Troy Miller, former acting Customs and Border Protection Commissioner and former director of the National Targeting Center, joined BigBear.ai full-time in April. McAleenan said Miller will lead efforts to serve DHS and federal civilian security and law enforcement agencies.

As part of a broader push for “execution rigor,” McAleenan said Jo Ann Bjornson joined as chief human resources officer on March 16, and Alex Thompson joined as chief corporate affairs officer on March 1.

Ask Sage and CargoSeer integration and product updates

McAleenan said the company’s priority to capitalize on recent acquisitions—Ask Sage and CargoSeer—includes integrating the businesses, expanding product sets and cross-selling into BigBear.ai’s customer base. He said both integrations are “on track and progressing well.”

For CargoSeer, McAleenan said the business is establishing “new beachheads in air cargo environments,” including technology to correlate documents with cargo contents. He added that the company launched a new capability “to detect fraud in invoices used by shippers in all ports of entry,” with the first customer expected to go live in the coming weeks.

For Ask Sage, McAleenan said a “new, simpler user interface” launched last week with tools including chat, workbook, code canvas and agent builder, designed to address gaps from user feedback. He also said Ask Sage launched a new commercial offering last week, extending access beyond government and defense industrial base customers to broader industry and international partners.

Financial results: higher gross margin, loss narrowed; outlook reaffirmed

Ricker reported first-quarter 2026 revenue of $34.4 million, which he said was comparable to the first quarter of 2025. He attributed performance to increased revenue from generative AI platforms and products related to the Ask Sage acquisition, offset by lower volume on Army programs in the prior-year quarter that did not repeat in Q1 2026.

Gross margin was 34%, up nearly 1,300 basis points year over year, which Ricker said was driven by a higher mix of revenue from Ask Sage’s platforms and products.

Ricker said SG&A expenses rose to $29.2 million from $22.7 million, primarily due to higher intangible asset amortization from the Ask Sage acquisition, increased legal and proxy expenses tied to a special stockholder meeting and a new retail voting program, and increased sales and marketing expenses. R&D expenses increased to $5.5 million from $4.2 million, reflecting investment in new capabilities across national security and trade and travel.

Net loss for the quarter was $56.8 million compared with about $62 million in the prior-year period. Ricker said the decrease was driven by lower interest expense, higher gross margin and increased interest income. He also noted about $36 million of non-cash charges related to fair value changes in derivatives and losses on debt extinguishment, “mostly the result of the conversion of our 2029 Notes to equity,” which the company executed in January.

Adjusted EBITDA was -$9.9 million versus -$7 million in the comparable period, which Ricker said primarily reflected higher investment in sales, go-to-market capabilities and R&D, partially offset by expanded gross margins.

The company affirmed its full-year 2026 revenue outlook of $135 million to $165 million, according to Ricker.

Ricker also said BigBear.ai recently launched a retail voting program that, for shareholders who opt in, will automatically vote shares in line with board recommendations on future proxy solicitations. He encouraged shareholders to vote ahead of the company’s annual general meeting scheduled for June 9.

About BigBear.ai NYSE: BBAI

BigBear.ai is a provider of artificial intelligence (AI) and data analytics solutions designed to deliver actionable insights for public sector and commercial clients. Headquartered in Columbia, Maryland, the company specializes in advanced analytics, machine learning, predictive modeling and network analysis to support decision-making in complex, data-rich environments. Its clientele spans defense and intelligence agencies, civil government organizations and enterprise businesses seeking to enhance mission outcomes and operational efficiency.

The company’s flagship offerings include an AI-driven analytics platform that integrates data engineering, algorithm development and visualization tools.

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