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BigBear.ai Q3 Earnings Miss Estimates, Revenues Top, Stock Up

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Key Takeaways

  • BBAI posted a Q3 loss of $0.07 per share, wider than expected, as revenues fell 20% year over year.
  • Shares climbed 12.4% after BBAI agreed to acquire Ask Sage, a generative AI platform for defense.
  • The deal strengthens BBAI's position in secure, end-to-end AI solutions for national security growth.

BigBear.ai Holdings, Inc. (BBAI - Free Report) reported third-quarter 2025 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top and bottom lines declined on a year-over-year basis.

Despite the mixed results, the company’s shares climbed 12.4% in the after-hours trading session yesterday. Positive investor sentiments were witnessed as BigBear.ai announced a definitive agreement to acquire Ask Sage, a fast-growing generative AI platform designed for secure deployment across defense, national security and other highly regulated sectors.

The move is expected to enhance the company’s presence in the defense technology ecosystem by combining Ask Sage’s expansive user base and advanced agentic AI capabilities with BigBear.ai’s established decision intelligence framework. Management highlighted that this integration will create a secure, end-to-end AI platform uniting software, data and mission services, catering directly to evolving market needs. The transaction is expected to close by late 2025 or early 2026.

Despite delays tied to the recent government shutdown, BigBear.ai remains optimistic about future growth opportunities in border security and defense, anticipating new contracts and accelerated spending under the “One Big Beautiful Bill.” The company underscored its strong positioning to deliver next-generation, secure AI solutions in support of national defense objectives.

BigBear.ai’s Q3 Earnings & Revenues

In the third quarter of 2025, BigBear.ai reported an adjusted loss per share of 7 cents, wider than the Zacks Consensus Estimate of a loss of 6 cents. In the prior-year quarter, the company reported an adjusted loss per share of 5 cents.

BigBear.ai Holdings, Inc. Price, Consensus and EPS Surprise

BigBear.ai Holdings, Inc. Price, Consensus and EPS Surprise

BigBear.ai Holdings, Inc. price-consensus-eps-surprise-chart | BigBear.ai Holdings, Inc. Quote

Quarterly revenues came in at $33.1 million, beating the Zacks Consensus Estimate of $31.1 million. The figure declined 20% from the $41.5 million reported in the prior-year quarter. The downside was caused by lower volume on certain U.S. Army programs.

Q3 Margins & Profitability of BigBear.ai

SG&A expenses in the third quarter came in at $25.3 million compared with $17.5 million reported in the prior-year quarter. This was caused by increased marketing spend, strategic initiatives and labor costs tied to the company’s transformation efforts.

During the quarter, gross profit totaled $7.4 million, compared with $10.8 million reported in the prior-year quarter. Gross margin came in at 22.4%, down from 25.9% in the year-ago quarter. The contraction reflected the absence of higher-margin programs recorded in 2024.

On an adjusted basis, EBITDA stood at $9.4 million, against $0.9 million reported in the prior-year quarter. The downside was attributed to higher Selling, general and administrative expenses (SG&A) and softer gross margins. Adjusted EBITDA margin stood at 28.4% against 2.3% reported in the prior-year period.

The company reported GAAP net income of $2.5 million, marking a sharp turnaround from a net loss of $15.1 million in the year-ago quarter. The improvement was primarily driven by non-cash derivative revaluation gains associated with convertible notes and warrants.

BigBear.ai’s Balance Sheet & Liquidity

The company ended the third quarter with a cash balance of $456.6 million, significantly up from $50.1 million at the end of 2024. During the quarter, long-term debt came in at $104.9 million compared with $135.4 million, reported as of December end.

The backlog stood at $376 million as of Sept. 30, 2025.

BigBear.ai’s 2025 Revenue Outlook

Management reaffirmed its 2025 revenue outlook of $125-$140 million.

BBAI’s Zacks Rank & Peer Releases

BigBear.ai currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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