BigBear.ai Q3 Earnings Call Highlights

Key Points

• BigBear.ai reported strong operational growth: Third-quarter revenue rose 31% year over year to $43.6 million, while gross margin expanded to 31.2%, helped by its Ask Sage generative AI platform.
• The company raised its full-year outlook to $150 million–$165 million in revenue as backlog reached $330 million and contract wins accelerated across national security, border security and enterprise markets.
• Despite improved operations, BigBear.ai posted a $91.9 million net loss, primarily due to a $76.7 million non-cash goodwill impairment charge; management said it expects to be debt-free by 2027 and is pursuing further growth and acquisitions.

BigBear.ai NYSE: BBAI reported third-quarter revenue growth of 31% year over year and raised its full-year 2026 revenue outlook, citing momentum in generative AI, national security and border-security contracts.

Revenue for the quarter totaled $43.6 million, while gross margin expanded to 31.2%, up 878 basis points from the same period a year earlier. Chief Financial Officer Sean Ricker said the company’s generative AI platform, acquired as Ask Sage in December 2025, substantially contributed to revenue growth and margin expansion.

“Our results were strong operationally and financially this quarter,” Ricker said. The company reported adjusted EBITDA of negative $9.1 million, compared with negative $9.4 million in the comparable quarter.

Guidance Raised as Backlog Grows

BigBear.ai increased its full-year revenue guidance to a range of $150 million to $165 million. At the midpoint, the outlook would represent 23% growth from 2025, according to Chief Executive Officer Kevin McAleenan.

Ricker said the new range represented a 5% increase at the midpoint from the company’s earlier guidance. He also pointed to accelerating sequential growth, with revenue increasing 6.7% in the second quarter and 18.6% in the third quarter.

The company ended the quarter with $330 million in backlog, up 22% from the end of the prior quarter. McAleenan said BigBear.ai had announced more than 25 contract wins since the second quarter, representing more than $225 million in contract value. Across the second and third quarters, the company announced more than 45 new wins, he said.

BigBear.ai entered the fourth quarter with nearly $400 million in cash and investments. Ricker said approximately $17 million of convertible debt is scheduled to mature in December and that the company expects to begin 2027 debt-free.

Impairment Drives Net Loss

Despite the operational gains, BigBear.ai recorded a net loss of $91.9 million, or $0.19 per share, compared with net income of $2.5 million in the prior-year quarter. The company said the result was primarily driven by a non-cash goodwill impairment charge of $76.7 million, or $0.16 per share.

McAleenan said the company’s near-term priorities remain revenue growth and pursuing merger-and-acquisition opportunities that could enable rapid deployment of technology or expand BigBear.ai’s market reach and scale.

Government and Critical-Infrastructure Contract Activity

The company highlighted contract wins involving homeland and border security, including two subcontracts supporting U.S. Customs and Border Protection’s Targeting and Analysis Systems Program Directorate. One subcontract is on SAIC’s team, while the other involves Unissant.

Under SAIC’s five-year recompete task order, BigBear.ai is to provide AI and analytics supporting systems used to assess risk associated with travelers and cargo entering the U.S., McAleenan said. Under Unissant’s five-year contract, the company will continue software development work for CBP vetting workflow operations and analysis.

BigBear.ai also cited new enterprise customers for its generative AI platform, including the Federal Bureau of Investigation, U.S. Coast Guard, NASA, Department of Energy and Department of Veterans Affairs. McAleenan said the platform provides agencies with secure access to generative AI models and agentic tools, including in disconnected and air-gapped environments.

Outside government markets, the company said it renewed a two-year agreement with Children’s Minnesota, a pediatric health system. The agreement covers the use of BigBear.ai’s digital-twin and predictive-analytics technology to help hospital leaders anticipate patient flow, assess operational challenges, and optimize capacity and resources.

Applied AI Strategy and 2027 Outlook

McAleenan characterized BigBear.ai as an applied AI company focused primarily on enterprise AI platforms and mission-specific applications, rather than AI infrastructure or general-purpose foundation models. He said the company’s model-agnostic approach enables it to incorporate developments from third-party AI providers while also building specialized capabilities for customer requirements.

The CEO identified defense modernization, changing global trade flows, rising international travel and pressure on security agencies as longer-term market tailwinds. He said the company expects these trends to support demand for AI deployments in national security, travel, trade and critical infrastructure.

“We approach the end of the year with real confidence, thanks to our underlying financial strength and win momentum,” McAleenan said, adding that the company sees itself positioned for growth in 2027.

About BigBear.ai (NYSE:BBAI)

BigBear.ai Holdings, Inc NYSE: BBAI is an artificial intelligence company that develops decision-intelligence solutions for government and commercial organizations. Its technologies are designed to help customers analyze complex data, identify risks and opportunities, and support planning and operational decision-making.

The company provides artificial intelligence and machine-learning capabilities across areas such as supply-chain management, cyber operations, logistics, autonomous systems, predictive analytics, and computer vision.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.