BigBear.ai targets $125M–$140M 2025 revenue amid historic government AI funding and record cash position

Earnings Call Insights: BigBear.ai Holdings, Inc. (BBAI) Q2 2025

Management View

• CEO Kevin McAleenan highlighted “landmark developments resulting in powerful market tailwinds,” particularly the passage of the One Big Beautiful Bill (OB3), which allocates $170 billion to the Department of Homeland Security and $150 billion to the Department of Defense for disruptive defense technology. He emphasized, “This is a transformative level of investment, and as a mission-ready AI company with national and border security focus, it’s directly in our lane.”
• McAleenan reported that BigBear.ai has deployed biometric solutions “on more than 2,000 devices at over 500 gates and 25 airports,” and is expanding internationally with partnerships in the United Arab Emirates and Panama.
• He stated, “We highlight the strongest ever balance sheet in the history of BigBear.ai, with over $390 million in cash to support aggressive new growth initiatives.”
• Addressing disruptions in federal contracts, McAleenan explained, “We have adjusted our full year guidance this quarter to reflect such disruptions,” specifically noting impacts on Army programs. He added, “We are not going to sit back and lick our wounds. We’re going to compete to win this work again.”
• Regarding future positioning, McAleenan said, “We are confident that our midterm outlook remains strong.”
• Interim CFO Sean Ricker said, “As of the end of the second quarter, we have $391 million of cash, an all-time record…we ended the quarter with a net positive cash position of almost $250 million, another record and the first time in BigBear’s history where our total cash exceeds our total debt.”
• Ricker added, “Second quarter revenue was $32.5 million, a decrease of $7.3 million year-over-year, which was primarily driven by the Army programs that Kevin previously discussed.”

Outlook

• The company now projects full year 2025 revenue between $125 million and $140 million. Management attributed the revised guidance to Army contract disruptions and stated, “We are withdrawing our adjusted EBITDA guidance at this time.”
• McAleenan described the updated guidance as giving “flexibility to invest in an aggressive but disciplined way over the rest of this year and smartly deploy capital to accelerate the major growth inflection that will drive material long-term shareholder value.”

Financial Results

• Ricker reported that second quarter revenue was $32.5 million, with a gross margin of 25% versus 27.8% in the comparable period. “SG&A expenses decreased from $23.4 million in the second quarter of 2024 to $21.5 million in the second quarter of 2025.”
• “Our net loss for the second quarter was $228.6 million, driven by changes in the fair value of derivatives of about $136 million, primarily associated with the quarterly remeasurement of the convertible features of our convertible notes. We also recorded a goodwill impairment charge of about $71 million this quarter.”
• Adjusted EBITDA for the quarter was negative $8.5 million versus negative $3.7 million in the comparable period. Ricker specified the decrease was “primarily driven by lower gross profit due to lower revenue volume as well as higher R&D expenses.”
• The company raised about $293 million through at-the-market facilities, selling approximately 75 million shares at an average gross selling price of $3.90 per share.

Q&A

• NOT_APPLICABLE: No analyst questions or management responses are included in the provided transcript.

Sentiment Analysis

• Analyst sentiment cannot be assessed as no analyst questions or commentary were included in the transcript.
• Management tone in prepared remarks was confident and assertive, with McAleenan stating, “We have the cash to invest, the conviction to advance and we’re building the team to execute.” Management acknowledged short-term challenges but emphasized the company’s strong positioning for future growth.
• Compared to the previous quarter, management’s tone maintains a focus on long-term opportunities, but this quarter there is a more pronounced emphasis on “going on offense” and leveraging the strengthened cash position for aggressive growth.

Quarter-over-Quarter Comparison

• The company shifted from reaffirming full year guidance in Q1 to lowering its revenue outlook in Q2, citing Army contract disruptions.
• Strategic focus has moved towards leveraging record liquidity for both organic and inorganic growth, including targeted M&A.
• Management tone is more aggressive and forward-looking, with a clearer articulation of capital deployment priorities and new market opportunities, compared to a focus in Q1 on operational improvement and transparency.
• The previous quarter highlighted contract wins and backlog growth, while this quarter spotlights preparedness for large-scale government AI investments and international expansion.

Risks and Concerns

• Management cited disruptions in federal contracts, especially U.S. Army programs, as a major challenge impacting revenue.
• The company noted the risk of continued volatility in government contracting and acknowledged, “recent near-term impacts on certain large programs and government contracting timing risks has impacted our revenue outlook for the rest of this year.”
• Risk mitigation strategies include expanding the sales pipeline, competing for new contracts, and aggressively pursuing both organic growth and M&A.

Final Takeaway

BigBear.ai management signaled a strategic pivot in response to extraordinary government AI funding and contract disruptions, placing strong emphasis on using its record $391 million cash position for aggressive expansion and targeted acquisitions. With a revised 2025 revenue outlook of $125 million to $140 million, leadership reiterated confidence in the company’s positioning for long-term growth, citing strengthening partnerships, new product deployments, and a focus on scaling both domestically and internationally in critical AI and national security sectors.

Read the full Earnings Call Transcript