BigBear.ai (BBAI) Q3 2026 Earnings Call Transcript

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DATE

Tuesday, Oct. 27, 2026

CALL PARTICIPANTS

• Chief Financial Officer – Sean Ricker
• Chief Executive Officer – Kevin McAleenan

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TAKEAWAYS

• Revenue — $43.6 million, an increase of 31% year over year driven by improved performance across the business and contributions from the generative AI platform.
• Gross Margin — 31.2%, representing an increase of 878 basis points year over year supported by the results of the generative AI platform.
• Net Loss — $91.9 million or $0.19 per share, compared to net income of $2.5 million in the prior year period.
• Noncash Goodwill Impairment Charge — $76.7 million or $0.16 per share, which management cited as the primary driver of the net loss for the quarter.
• Adjusted EBITDA — Negative $9.1 million, compared to negative $9.4 million in the third quarter of 2025.
• Full-Year 2026 Revenue Guidance — $150 million to $165 million, an increase of 5% at the midpoint versus the prior guidance range.
• New Contract Wins — More than 25 contracts awarded since the second quarter, representing over $225 million in total contract value.
• Backlog — $330 million at the end of the third quarter, a 22% increase from the previous quarter.
• Cash and Investments — Approximately $400 million in reserve as of the end of the third quarter.
• Convertible Debt — $17 million outstanding, which the company expects to be settled when the debt matures in Dec. 2026.
• Quarter-over-Quarter Revenue Growth — 18.6% in the third quarter, which accelerated from 6.7% growth in the second quarter.
• Subcontract Awards — Two multiyear contracts totaling five years each to support US Customs and Border Protection risk assessment and targeting operations.
• Biometric Solutions Deployment — Deployed across more than 24 major US airports to support international travel security.
• Customer Expansion — New third quarter contracts secured with the Federal Bureau of Investigation, NASA, the Department of Energy, and the Department of Veterans Affairs.
• Healthcare Segment Renewal — 2-year renewal with Children’s Minnesota for the company’s digital twin and predictive analytics solution.

SUMMARY

BigBear.ai Holdings, Inc. (BBAI +10.85%) reported accelerated revenue growth and a raised full-year outlook as the company expanded its presence in the security and defense technology sectors. Management stated that the business is focused on the tools and application layers of the AI value chain, specifically targeting mission-critical environments for government and national infrastructure. The company reported a net loss for the quarter, which was attributed to a noncash goodwill impairment charge, while operating with a target to be debt free by the end of 2026.

• CEO McAleenan stated, “We specialize in technology, platforms, tools, and solutions for missions that are very difficult for new entrants to understand and penetrate.”
• Management categorized the AI value chain into five layers, indicating that BigBear operates primarily in the tools, enterprise platforms, and specific mission applications segments.
• The company reported that its generative AI platform, acquired through the Ask Sage transaction in Dec. 2025, was a primary driver of the 31% year-over-year revenue increase.
• McAleenan noted that the firm’s model agnostic platform allows for the incorporation of third-party AI model advances without reliance on a single provider.
• Management indicated that global defense modernization and a $112 billion combined AI and autonomy request in the 2027 US defense budget are creating significant market tailwinds.

INDUSTRY GLOSSARY

• Ask Sage: An AI technology company acquired by BigBear.ai in Dec. 2025 that provides generative AI capabilities for government and enterprise customers.
• CBP: US Customs and Border Protection, the federal agency responsible for border security and trade enforcement.
• FutureFlow Rx: A digital twin and predictive analytics solution designed for healthcare capacity and resource optimization.
• AgenTeq: A set of tools used within the company’s generative AI platform to build agents for advanced workflows.
• Digital Twin: A virtual model of a physical system or process used for simulation and predictive analysis in operational environments.

Full Conference Call Transcript

Operator: Greetings, and welcome to the Big Bear AI Holdings Inc. Third Quarter 26 Earnings Call and Webcast. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. It is now my pleasure to introduce Sean Ricker, Chief Financial Officer.

Sean Ricker: Good afternoon, and thank you all for joining us today for our third quarter 26 earnings call. I am Sean Ricker, CFO of BigBear AI. I am joined today by our CEO, Kevin McAleenan. Statements made in today’s call that are not historical facts are considered forward looking statements and are made pursuant to the safe harbor provisions of the federal securities laws. Actual results may differ materially from those projected in the forward-looking statements. These statements including discussion of our guidance, expectations for 2027, and market estimates speak only as of today, and we undertake no obligation to update them.

Please see today’s press release and our SEC filings for a description of some of the factors that may cause actual results to differ materially from those in the forward-looking. We also have posted presentation slides and financial charts on our website today that we plan to address during the call to supplement our comments. These materials also include information regarding non GAAP measures that may be used in today’s call. Please access our website at www.bigbear.ai and click on the Investor Relations link to view and follow the charts. Now I will hand it over to Kevin.

Kevin McAleenan: Thank you, Sean. BigBear had another strong quarter. I will start with 4 important financial updates for our shareholders. First, revenue grew 31% year over year, our third consecutive quarter of growth. Because of this performance, we are raising our full year 2026 revenue guidance range to $150 million to $165 million. This is the first time Big Bear has raised our revenue guidance and achieving the midpoint would represent 23% growth over last year. Second, we have won and announced more than 25 new contracts since the second quarter. Together, these represent more than $225 million in contract value.

Wins include significant recompetes for the Department of Homeland Security, and several important new mission customers as well as classified awards in our national security business. Third, we have sustained our gross margin improvement trend. Gross margins rose by 878 basis points compared with the same period last year. Fourth, we maintained our strong cash position. We entered the fourth quarter with $400 million in cash and investments in reserve. Taken together, we are following through on what we set out to achieve this year. We a

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