BigBear.ai Holdings, Inc. (BBAI): Results of Operations and Financial Condition
BigBear.ai Holdings, Inc. (BBAI) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 BigBear.ai Announces Second Quarter 2026 Results; Delivers 13% Growth, 20+ New Contract Wins, and Expanded Margins; Affirms Full Year Revenue Guidance • Delivers Q2 2026 revenue of $36.7 million, increasing 13% year-over-year • Expanded Q2 gross margins by 781 basis
How this was made
The 30-second read
Why it matters
Key decision inputs are the affirmed full-year revenue guidance range, the magnitude of gross margin expansion, backlog growth, and liquidity (cash and investments). These can drive revisions to forward estimates and risk premium.
Market read
Q2 shows double-digit top-line growth and a large gross margin improvement, with backlog and cash supporting execution, while profitability metrics remain weak.
What to watch
SG&A rose $10.4M YoY, and the company still reports a large net loss; traders may discount the headline gross margin improvement if operating leverage does not follow through in subsequent quarters.
BigBear.ai Announces Second Quarter 2026 Results; Delivers 13% Growth, 20+ New Contract Wins, and Expanded Margins; Affirms Full Year Revenue Guidance
Revenue grew 13% and gross margin expanded to 32.8%, while the company affirmed full-year revenue guidance and reported $409.8 million of available cash and investments. However, SG&A and research and development expenses increased, and non-GAAP Adjusted EBITDA declined to $(11.6) million from $(8.5) million.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $36.7 million | – | 13% |
| Cost of revenuesGAAP | $ 24,698 ($ thousands) | – | – |
| Gross marginGAAP | $ 12,051 ($ thousands) | – | – |
| Gross margin percentageGAAP | 32.8% | – | 781 basis points |
| Selling, general and administrative expensesGAAP | $31.8 million | – | increased $10.4 million |
| Research and developmentGAAP | $ 7,562 ($ thousands) | – | – |
| Restructuring chargesGAAP | $ 384 ($ thousands) | – | – |
| Transaction expensesGAAP | $ 815 ($ thousands) | – | – |
| Goodwill impairmentGAAP | — | – | – |
| Operating lossGAAP | $ (28,558) ($ thousands) | – | – |
| Interest expenseGAAP | $ 307 ($ thousands) | – | – |
| Interest incomeGAAP | $ (3,817) ($ thousands) | – | – |
| Net increase in fair value of derivativesGAAP | $ 471 ($ thousands) | – | – |
| Loss before taxesGAAP | $ (25,744) ($ thousands) | – | – |
| Income tax expenseGAAP | $ 5 ($ thousands) | – | – |
| Net lossGAAP | $25.7 million | – | – |
| Basic and diluted net loss per shareGAAP | $ (0.05) | – | – |
| Weighted-average shares outstanding, basicGAAP | 479,119,921 | – | – |
| Weighted-average shares outstanding, dilutedGAAP | 479,119,921 | – | – |
| EBITDAnon-GAAP | $ (22,448) ($ thousands) | – | – |
| Adjusted EBITDAnon-GAAP | $(11.6) million | – | – |
| Six months revenueGAAP | $ 71,184 ($ thousands) | – | – |
| Six months gross marginGAAP | $ 23,772 ($ thousands) | – | – |
| Six months operating lossGAAP | $ (52,813) ($ thousands) | – | – |
| Six months net lossGAAP | $ (82,512) ($ thousands) | – | – |
| Six months basic and diluted net loss per shareGAAP | $ (0.17) | – | – |
| Six months EBITDAnon-GAAP | $ (75,584) ($ thousands) | – | – |
full-year 2026 outlook
- Revenue$135 million - $165 million
What drove it
- Revenue growth was due to revenue from Ask Sage’s GenAI Platforms and Products.
- Gross-margin expansion was due to increased volume from Ask Sage’s higher margin GenAI Platforms and Products.
- The company reported more than 20 new contract wins.
- Backlog increased 9% to $269.6 million between December 31, 2025 and June 30, 2026.
- The net-loss decrease was primarily driven by a decrease in the loss due to non-cash changes in the fair value of derivatives of $135.3 million, a decrease of goodwill impairment of $70.6 million, a decrease in interest expense of $4.1 million, higher gross margin of $3.9 million and increased interest income of $2.1 million.
Concerns
- Selling, general and administrative expenses increased $10.4 million to $31.8 million, primarily driven by intangible asset amortization from the Ask Sage acquisition, legal and proxy expenses, the new Retail Voting Program, and sales and marketing expenses.
- Research and development costs increased $3.2 million.
- Non-GAAP Adjusted EBITDA was $(11.6) million, compared to $(8.5) million.
- Net cash used in operating activities was $ (22,207) ($ thousands), compared to $ (3,868) ($ thousands).
- Cash, cash equivalents, and restricted cash at the end of the period was $ 38,065 ($ thousands), compared to $ 390,845 ($ thousands).
What to watch
- Execution during the second half of 2026 against the affirmed full-year 2026 revenue guidance of $135 million - $165 million.
- Whether volume from Ask Sage’s higher margin GenAI Platforms and Products continues to support gross margin.
- The pace of SG&A, research and development, and associated effects on Adjusted EBITDA.
- Deployment of cash and investments toward accretive, catalytic M&A, as described by the CEO.
- New contract activity and conversion of the $269.6 million backlog into revenue.
Balance sheet and cash flow
- Total available cash and investments of $409.8 million as of June 30, 2026
- Cash and cash equivalents: $ 36,278 ($ in thousands) as of June 30, 2026, compared to $ 87,126 ($ in thousands) as of December 31, 2025
- Available for sale investments: $ 282,913 ($ in thousands) current and $ 90,612 ($ in thousands) non-current as of June 30, 2026
- Total assets: $ 841,312 ($ in thousands) as of June 30, 2026, compared to $ 894,547 ($ in thousands) as of December 31, 2025
- Current portion of long-term debt, net: $ 16,643 ($ in thousands) as of June 30, 2026, compared to $ 16,560 ($ in thousands) as of December 31, 2025
- Long-term debt, net: — as of June 30, 2026, compared to $ 90,484 ($ in thousands) as of December 31, 2025
- Total liabilities: $ 70,988 ($ in thousands) as of June 30, 2026, compared to $ 282,677 ($ in thousands) as of December 31, 2025
- Total stockholders’ equity: $ 770,324 ($ in thousands) as of June 30, 2026, compared to $ 611,870 ($ in thousands) as of December 31, 2025
- Net cash used in operating activities: $ (22,207) ($ thousands), compared to $ (3,868) ($ thousands)
- Net cash used in investing activities: $ (43,041) ($ thousands), compared to $ (1,164) ($ thousands)
- Net cash used in financing activities: $ (3,417) ($ thousands), compared to net cash provided by financing activities of $ 288,822 ($ thousands)
- Cash, cash equivalents, and restricted cash at the end of the period: $ 38,065 ($ thousands), compared to $ 390,845 ($ thousands)
- Six months net cash used in operating activities: $ (40,208) ($ thousands), compared to $ (10,532) ($ thousands)
- Six months net cash used in investing activities: $ (10,318) ($ thousands), compared to $ (2,784) ($ thousands)
- Six months net cash used in financing activities: $ (4,200) ($ thousands), compared to net cash provided by financing activities of $ 354,765 ($ thousands)
Analysis
BigBear.ai reported Q2 2026 revenue of $36.7 million, up 13% from $32.5 million in Q2 2025. The company attributed the increase to revenue from Ask Sage’s GenAI Platforms and Products. It also reported more than 20 new contract wins, while backlog increased 9% to $269.6 million between December 31, 2025 and June 30, 2026.
Mix improved materially in the quarter. Gross margin rose to 32.8% from 25.0%, an expansion of 781 basis points, which management attributed to increased volume from Ask Sage’s higher margin GenAI Platforms and Products. Gross margin in dollars was $ 12,051 ($ thousands), compared with $ 8,113 ($ thousands), despite cost of revenues of $ 24,698 ($ thousands), compared with $ 24,359 ($ thousands).
Operating costs remained elevated. SG&A increased $10.4 million to $31.8 million, driven by Ask Sage intangible-asset amortization, legal and proxy expenses, the Retail Voting Program, and sales and marketing investment. Research and development was $ 7,562 ($ thousands), compared with $ 4,393 ($ thousands). Non-GAAP Adjusted EBITDA declined to $(11.6) million from $(8.5) million, with the company citing the SG&A increase as partially offset by higher gross margin.
GAAP net loss narrowed to $25.7 million from a net loss of $228.6 million. The release cited lower non-cash fair-value derivative losses, lower goodwill impairment, lower interest expense, higher gross margin, and higher interest income as the principal drivers, partially offset by higher SG&A and research and development costs. The company reported total available cash and investments of $409.8 million as of June 30, 2026, and long-term debt, net, was reported as — compared with $ 90,484 ($ in thousands) at December 31, 2025.
BigBear.ai affirmed full-year 2026 revenue guidance of $135 million - $165 million. The filing provides no gross-margin, operating-expense, tax-rate, profitability, cash-flow, or capital-return guidance. The central reported execution variables for the second half are revenue conversion from backlog, sustained GenAI product mix, cost control, and management’s stated pursuit of accretive, catalytic M&A.
Management, verbatim
It has been another strong quarter. Double-digit growth, significant margin expansion and more than 20 new contracts show that the BigBear.ai leadership team is following through on our commitments. We are in a strong financial position with $410 million of cash and investments, we’re on track for our target of 17% revenue growth, and we intend to accelerate. The second half of 2026 is all about execution discipline and positioning ourselves for accretive, catalytic M&A and building momentum for even stronger topline growth in 2027.
Kevin McAleenan, CEO of BigBear.ai
BigBear.ai is in an excellent position to take advantage of the rapid expansion of investment and innovation in defense technology, which shows no signs of slowing down, given the macro environment. We have steadily been maturing the underlying financial discipline of the company and have significant cash in reserve so that when the right opportunity presents itself, we can move fast.
Sean Ricker, CFO of BigBear.ai
Not in the filing
stated, not guessed- Prior-quarter revenue, gross margin, operating expenses, operating loss, net loss, EPS, EBITDA and Adjusted EBITDA comparisons were not reported.
- Segment revenue and segment profitability were not reported.
- Free cash flow was not reported.
- Adjusted EPS was not reported.
- Share repurchases and dividend declarations or payments were not reported.
- Full-year 2026 gross-margin, operating-expense, tax-rate, earnings, EBITDA, cash-flow and capital-return guidance were not reported.
- Previous-release outlook was not provided, so comparison of actual results with prior guidance is unavailable.
- The provided filing text truncates the full Adjusted EBITDA reconciliation after the non-recurring integration costs line.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC 8-K (Item 2.02) with BigBear.ai’s Q2 2026 results and an accompanying earnings release exhibit.
Ticker impact
BigBear.ai reported Q2 2026 revenue of $36.7M (+13% YoY), gross margin expansion to 32.8%, and affirmed full-year guidance of $135M-$165M.
Likely supportive for the stock, especially if investors focus on margin expansion and backlog growth, though net loss and adjusted EBITDA remain negative.
The 8-K includes specific, time-stamped operating metrics (revenue, gross margin, backlog, cash/investments) and guidance affirmation, which are direct inputs to earnings power and forward expectations.
Market effects
Reinforces demand and execution in defense and security AI, with margin expansion suggesting improving unit economics for defense AI platforms.
Limited direct regional read-through beyond US defense tech sentiment.
Primarily US-focused defense contracting and AI spending signals; limited global spillover from the disclosed metrics.
Counterpoint
Margin expansion may be partly mix-driven (Ask Sage GenAI platforms) and may not fully translate into sustained profitability given continued negative adjusted EBITDA.
Key entities
- public_companyBigBear.ai Holdings, Inc.
Specialized defense and security AI provider reporting Q2 2026 results, backlog, liquidity, and affirmed 2026 revenue guidance.
- business_unitAsk Sage
GenAI platforms and products contributor cited as a driver of Q2 revenue growth and higher gross margin.
