BigBear.ai Holdings, Inc. Q1 FY2025 earnings call

• Kevin McAleenan introduced himself and shared his leadership philosophy shaped by experiences in operational government organizations, emphasizing the blend of technological innovation and operational expertise at BigBear.ai.
• Outlined strategic priorities for 2025 including mission expertise, international growth, business alliances and partnerships, and relentless innovation and AI.
• Detailed progress in core markets: deepening leadership in border security, defense and intelligence, manufacturing and supply chain; and expanding into new markets internationally and domestically.
• Highlighted recent achievements like securing a significant new contract in National Security, deepening partnerships in manufacturing and shipbuilding, and successful deployments in border and travel security.
• Julie Peffer reviewed financial results, including revenue, gross profit, margins, R&D spend, net loss, adjusted EBITDA, backlog, and the strengthened balance sheet with cash position and reduced debt.

Revenue for the first quarter was $34.8 million, up 5% year-on-year compared to $33.1 million in the first quarter of 2024, primarily driven by additional revenue from the Department of Homeland Security and digital identity awards. Gross profit for the quarter was up 6% from $7 million in the first quarter of 2024 to $7.4 million in the first quarter of 2025. Gross margin was 21.3% this quarter, with adjusted gross margin (removing equity compensation impact) at 28.6% in Q1 2025 versus 29.1% in Q1 2024. R&D spend was up $3 million year-over-year. Net loss in the first quarter of 2025 was $62 million compared to $127.8 million in the first quarter of 2024. Adjusted EBITDA was negative $7 million in Q1 2025 compared to negative $1.6 million in Q1 2024. Backlog was $385 million at the end of the first quarter, up 30% from Q1 2024. Ended Q1 with $108 million in cash and cash equivalents, and debt position materially reduced with outstanding principal on convertible notes at $142 million at the end of the quarter, down from $200 million at the end of 2024.

• Reaffirmed full year guidance.
• Noted that the business operates in a dynamic macroeconomic environment with potential short-term risks such as changes in federal procurement processes and government efficiency efforts leading to delays in funding and award timing.

• Changes in federal procurement processes and government efficiency efforts creating temporary variability, including delays in funding and award timing.