BigBear.ai Holdings, Inc. (BBAI) Q1 2026 Earnings Call Prepared Remarks Transcript
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Overview
BigBear.ai's earnings call highlights strong revenue and backlog growth, improved gross margins, and strategic acquisitions, all contributing to a positive outlook. Despite a net loss, the company shows promising revenue guidance and market opportunities, particularly in national security and trade. The integration of new executives and realigned teams further supports growth potential. Although risks such as supply chain disruptions and competitive pressures exist, the overall sentiment leans positive due to strategic initiatives and market expansion. Without market cap data, a precise prediction is challenging, but momentum suggests a positive stock movement.
Key Financial Performance
Revenue $34.4 million, comparable to Q1 2025. Increase driven by GenAI platforms and products from Ask Sage acquisition, offset by lower volume on Army programs.
Gross Margin 34%, an increase of almost 1,300 basis points compared to Q1 2025. Expansion driven by higher mix of revenue from GenAI platforms and products.
SG&A Expenses $29.2 million, up from $22.7 million in Q1 2025. Increase due to intangible asset amortization from Ask Sage acquisition, legal and proxy expenses, and expanded sales and marketing efforts.
R&D Expenses $5.5 million, up from $4.2 million in Q1 2025. Increase attributed to investments in new capabilities and technologies in national security and trade and travel domains.
Net Loss $56.8 million, reduced from $62 million in Q1 2025. Decrease driven by lower interest expense, higher gross margin, and increased interest income.
Adjusted EBITDA Negative $9.9 million, compared to negative $7 million in Q1 2025. Decrease due to increased investment in sales, go-to-market capabilities, and R&D, partially offset by expanded gross margins.
Backlog $281.9 million, a 14% increase from Q4 2025. Growth driven by new orders, including significant contracts in national security and trade and travel markets.
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Operating Highlights
Ask Sage generative AI platform: New contracts with NASA, Army's Intelligence and Security Command, and Naval Research Lab. Expanded to commercial offerings, supporting a wide range of AI models for broader industry and international partners.
CargoSeer: Launched new capabilities for fraud detection in invoices and air cargo environments. First customer to go live in the coming weeks.
Shipyard AI: Secured contracts with Chantier Davie and Bollinger Shipyards to support shipbuilding operations.
veriScan and TrueFace products: Deployed at Chicago O'Hare and Dallas-Fort Worth airports, valued at $7 million, enhancing travel efficiency and security.
National security and trade and travel markets: Focused on these growing markets with tailored AI solutions and realigned teams to meet specific mission needs.
DHS and federal civilian security: Positive developments with new leadership and funding, positioning BigBear.ai for additional technology procurements.
Revenue and backlog growth: Revenue for Q1 2026 was $34.4 million, with a 14% increase in backlog to $281.9 million. Gross margin improved significantly.
Leadership and team realignment: New executives joined, and teams were realigned to focus on national security and trade and travel priorities.
Enhanced go-to-market approach: Integrated sales, technology, delivery, and customer success teams for better alignment with growth priorities.
Strategic acquisitions: Progress in integrating Ask Sage and CargoSeer acquisitions, expanding product capabilities and customer base.
Marketing and advocacy: Launched a campaign emphasizing mission understanding and AI's role in national security, including congressional engagement.
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Risk or Challenges
Supply Chain Disruptions: The company highlighted challenges in helping businesses adjust to supply chain disruptions, particularly in the context of the Iran conflict and global conflicts affecting trade and logistics.
Economic and Budgetary Constraints: The partial government shutdown and delays in DHS fiscal year funding were noted as challenges, potentially impacting the pace of technology procurements and new project starts.
Competitive Pressures: The company emphasized the need to outperform competitors in the trade and travel market, particularly in airport security and efficiency solutions, as well as in AI-driven platforms for national security.
Operational Execution Risks: The company is undergoing significant internal realignment and restructuring, which could pose risks to execution and operational efficiency during the transition period.
Regulatory and Legislative Uncertainty: The evolving regulatory landscape and the need for close collaboration with lawmakers to address advanced AI threats were mentioned as critical challenges.
Technological Advancement by Adversaries: The CEO highlighted the rapid pace of AI adoption by adversaries and criminal networks, emphasizing the need for the U.S. to remain peerless in countering advanced AI threats.
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Guidance & Outlook
Revenue Outlook: The company affirms its revenue guidance for 2026, projecting revenue between $135 million and $165 million.
Backlog Growth: The company reported a 14% increase in backlog from Q4 2025 to $281.9 million, driven by new orders.
Market Trends and Opportunities: The global market for increased shipbuilding remains robust, with $65.8 billion in new funding requested for naval shipbuilding in the administration's 2027 budget. BigBear.ai is leveraging its Shipyard AI platform to support U.S. and allied shipyards.
DHS Funding and Opportunities: The confirmation of Secretary Markwayne Mullin and the signing of the majority of DHS' fiscal year 2026 budget are expected to unlock potential for new starts and additional technology procurements. BigBear.ai is actively bidding on live RFPs.
Product and Platform Expansion: The company launched new capabilities for its CargoSeer and Ask Sage platforms, including fraud detection in invoices for CargoSeer and a new user interface for Ask Sage. Ask Sage also introduced a commercial offering to expand its customer base beyond government users.
Strategic Realignment: BigBear.ai is implementing a new go-to-market approach, aligning sales, technology, delivery, and customer success teams to growth priorities in national security and trade and travel.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Review of Unclear Management Responses
A:
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Annual General
Ask Sage
CFO
CargoSeer
DHS
GenAI platform
General Meeting
Officer
Sage acquisition
Sean
Secretary
United States
ai
campaign
cargo
contract
disruption
effort
homeland
insight
majority
meeting
need
operator
pace
pressure
priority
security trade
team
threat landscape
trade travel
understanding
user
voting program
week
BBAI Transcript
BigBear.ai Holdings, Inc. (BBAI) Q1 2026 Earnings Call Prepared Remarks Transcript
Positive5-8
BigBear.ai's earnings call highlights strong revenue and backlog growth, improved gross margins, and strategic acquisitions, all contributing to a positive outlook. Despite a net loss, the company shows promising revenue guidance and market opportunities, particularly in national security and trade. The integration of new executives and realigned teams further supports growth potential. Although risks such as supply chain disruptions and competitive pressures exist, the overall sentiment leans positive due to strategic initiatives and market expansion. Without market cap data, a precise prediction is challenging, but momentum suggests a positive stock movement.
BigBear.ai Holdings, Inc. (BBAI) Q4 2025 Earnings Call Prepared Remarks Transcript
Unknown3-2
The earnings call revealed several negative factors: declining revenue and gross margins, increased expenses, and a negative adjusted EBITDA. Despite strategic growth plans and reduced net loss, the financial strain and execution risks from acquisitions are concerning. The Q&A section did not provide clarity on these issues. These factors outweigh the positive outlook, leading to a negative sentiment rating.
BigBear.ai Holdings, Inc. (BBAI) Q3 2025 Earnings Call Prepared Remarks Transcript
Unknown11-11
The earnings call summary indicates significant financial challenges: a revenue decline, reduced gross margins, increased SG&A expenses, and negative adjusted EBITDA. The company's reliance on federal contracts poses risks, especially given the government shutdown impact. Although the Ask Sage acquisition could support future growth, it presents integration risks. The absence of shareholder return discussion and competitive market pressures further weigh negatively. Despite a strong cash position, these factors suggest a negative stock price reaction in the short term.
BigBear.ai Holdings, Inc. (BBAI) Q1 2025 Earnings Call Transcript
Unknown5-1
The earnings call presents mixed signals: positive backlog growth and reduced debt are offset by increased net losses and negative EBITDA. While revenue and gross profit saw modest growth, margins declined slightly. The lack of clear guidance on new product launches and supply chain challenges add uncertainty. Despite reaffirmed revenue guidance, the absence of specific sales figures and vague management responses in the Q&A add to the neutral outlook. Given these factors, the stock price is likely to remain stable over the next two weeks.
BBAI Slides
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