On March 6, 2025, BigBear.ai Holdings Inc (BBAI, Financial) released its 8-K filing detailing the financial results for the fourth quarter and full year of 2024. BigBear.ai, a technology-led solutions organization, specializes in AI-powered decision intelligence solutions across supply chains & logistics, autonomous systems, and cybersecurity, operating through its Cyber & Engineering and Analytics segments.
Performance Overview and Challenges
BigBear.ai Holdings Inc (BBAI, Financial) reported a revenue increase of 8% year-over-year for the fourth quarter of 2024, reaching $43.8 million compared to $40.6 million in the same period of 2023. This growth was primarily driven by additional revenue from Department of Homeland Security and Digital Identity awards. However, the company faced a significant net loss of $108.0 million in Q4 2024, compared to a net loss of $21.3 million in Q4 2023, largely due to non-cash changes in the fair value of derivative liabilities related to convertible notes and warrants.
Financial Achievements and Industry Significance
Despite the challenges, BigBear.ai made notable financial strides, including restructuring its debt by exchanging $182.3 million in convertible senior notes due in 2026 for notes due in 2029. This move, along with $58 million converted into equity, reduced the remaining debt on convertible notes to $142.3 million. The company's cash balance stood at $50.1 million as of December 31, 2024, and it received gross proceeds of $64.7 million from warrant exercises in Q1 2025. These efforts significantly decreased net debt from $150 million to $27 million, improving the debt-to-cash ratio from 4.0 to 1.2.
Key Financial Metrics
BigBear.ai's gross margin improved to 37.4% in Q4 2024 from 32.1% in Q4 2023, primarily due to year-end fringe and overhead true-up allocation adjustments. However, the company's Non-GAAP Adjusted EBITDA decreased to $2.0 million in Q4 2024 from $3.7 million in Q4 2023, impacted by increased recurring SG&A expenses. The ending backlog as of December 31, 2024, was $418 million, a substantial increase from $168 million at the end of 2023.
| Metric | Q4 2024 | Q4 2023 |
|---|---|---|
| Revenue | $43.8 million | $40.6 million |
| Net Loss | $(108.0) million | $(21.3) million |
| Gross Margin | 37.4% | 32.1% |
| Adjusted EBITDA | $2.0 million | $3.7 million |
Analysis and Outlook
BigBear.ai's revenue growth and improved gross margin highlight its ability to capitalize on new contracts and optimize operational efficiencies. However, the increased net loss underscores the challenges posed by derivative liabilities and rising SG&A expenses. The company's strategic debt restructuring and cash flow improvements position it for potential growth in 2025, with projected revenue between $160 million and $180 million and a negative single-digit Adjusted EBITDA.
2024 was a pivotal year for the business. We demonstrated momentum through major contract wins, expanding our backlog and growing our pipeline, maturing our technology portfolio, and restructuring our debt to strengthen our financial position for the long term," said Kevin McAleenan, Chief Executive Officer, BigBear.ai.
BigBear.ai's focus on leveraging AI-powered solutions in critical sectors like national security and cybersecurity remains a key driver for future growth. However, the company must address its financial challenges to sustain its competitive edge in the technology industry.
Explore the complete 8-K earnings release (here) from BigBear.ai Holdings Inc for further details.
