- Awarded 5-year production contract valued at $165 million,
beginning in Q4 2024, to deliver the U.S. Army’s Global Force
Information Management - Objective Environment (GFIM-OE).
- Demonstrated ConductorOS, the Company’s distributed AI
orchestration platform, in a live environment at the U.S.
Department of Defense’s (DoD’s) Rapid Defense Experimentation
Reserve Technology Readiness Experimentation (RDER T-REX)24-2 event
and is showcasing capabilities of ConductorOS in the U.S. Navy’s
Mission Autonomy Proving Ground (MAPG) series of exercises through
the rest of 2024.
- Revenue increased 22.1% to $41.5 million compared to $34.0
million in 2023.
- Gross margin increased to 25.9% in the third quarter of 2024
compared to 24.7% in 2023.
- Net loss of $12.2 million and non-GAAP Adjusted EBITDA* of
positive $0.9 million.
- Cash balance of $65.6 million as of September 30, 2024; $1.9
million net cash used in operating activities in the third
quarter.
- Affirming full-year 2024 revenue guidance between $165 million
and $180 million.
BigBear.ai Holdings, Inc. (NYSE: BBAI) (“BigBear.ai” or
the “Company”), a leader in AI-powered decision intelligence
solutions, today announced financial results for the third quarter
of 2024 and issued an investor letter that has been posted to the
Investor Relations section of the Company’s website.
“Our third quarter financials show that we are continuing to
build a long-term sustainable business, with good cash reserves and
steady progress. The headwinds we face as a business are unchanged:
the cautious approach of governments and regulators towards
artificial intelligence means our business will remain lumpy, and
we understand these challenges and are navigating them
thoughtfully,” said Mandy Long, CEO of BigBear.ai.
“The route to the long-term success of BigBear.ai lies in both
the expertise of our team members and the quality and relevancy of
our technology. You can read more details in our letter to
investors published today,” she continued.
Financial Highlights
- Revenue increased 22.1% to $41.5 million for the third quarter
of 2024, compared to $34.0 million for the third quarter of
2023.
- Gross margin increased to 25.9% in the third quarter of 2024 as
compared to 24.7% in the third quarter of 2023, partially driven by
higher margin commercial solutions in the third quarter of 2024
compared to the third quarter of 2023.
- Net loss of $12.2 million for the third quarter of 2024,
compared to net income of $4.0 million for the third quarter of
2023. The increase in net loss was primarily driven by a decreased
benefit from the changes in fair value of warrants. The benefit of
the change of the fair value of derivatives was $1.3 million in the
third quarter of 2024 compared to $15.7 million in the third
quarter of 2023.
- Non-GAAP Adjusted EBITDA* of positive $0.9 million for the
third quarter of 2024 compared to $0.2 million for the third
quarter of 2023, primarily driven by improved gross margins and
continued focus on cost management.
- SG&A of $17.5 million for the third quarter of 2024
compared to $15.5 million for the third quarter of 2023, partially
due to increased headcount, as well as higher costs related to
non-recurring integration, strategic initiatives, and non-recurring
litigation.
- Ending backlog was $437 million as of September 30, 2024.
- The consolidated year-to-date results include results from
Pangiam from the acquisition date of February 29th, 2024 to the end
of September 2024.
Momentum
- BigBear.ai awarded production contract to deliver the U.S.
Army’s GFIM-OE — The U.S. Army awarded BigBear.ai a five-year,
$165.15 million sole source prime contract for GFIM production
services. Since 2021, BigBear.ai has been working with the Army to
transform 15 legacy systems into an enterprise-wide intelligent
automation platform, supporting the Secretary of the Army’s vision
for data-centric force management. Building on the contributions
through Phase 1 and Phase 2, this contract will support the
continued development and transition of GFIM-OE capabilities to
production.
- BigBear.ai and Concept Solutions team awarded shared IDIQ
contract with Federal Aviation Administration (FAA) — BigBear.ai
received an award as a subcontractor to Concept Solutions, LLC
(CS). CS is one of 14 companies awarded a FAA Information
Technology Innovative Procurement Strategic Sourcing (ITIPSS)
contract supporting the Office of Information Technology (AIT).
This multiple-award IDIQ contract, with a $2.4 billion shared
ceiling over ten years, will enable the FAA to acquire a full range
of IT capabilities, solutions, and emerging technologies, offering
state-of-the-art IT-related service solutions.
- BigBear.ai implemented biometric boarding solutions for Denver
International Airport (DEN) — BigBear.ai announced a successful
installation of veriScan, BigBear.ai’s biometric verification
solution, at DEN. veriScan is now deployed at 14 international
departure gates at DEN, impacting the boarding process for over
46,600 international departing passengers.
- ConductorOS excellence at RDER T-REX24-2 — BigBear.ai
demonstrated ConductorOS, BigBear.ai’s AI orchestration platform,
at the DoD Office of the Under Secretary of Defense for RDER
T-REX24-2 event highlighting its capabilities in edge AI
orchestration. ConductorOS was recognized as a Tier 1
technology.
- BigBear.ai participates in U.S. Navy MAPG exercises —
BigBear.ai announced its participation in previous and upcoming
showcases with the U.S. Navy’s MAPG series of exercises in the
second half of 2024, providing maritime domain awareness and edge
AI orchestration. In collaboration with the U.S. Navy, BigBear.ai
will continue to showcase ConductorOS, BigBear.ai’s AI, data and
sensor orchestration platform, to demonstrate multi-vendor
interoperability and AI deployment for the maritime domain.
- BigBear.ai announced the promotion of Carl Napoletano to Chief
Operating Officer — Napoletano will continue to report directly to
CEO Mandy Long. Napoletano has held a number of senior leadership
positions at BigBear.ai, most recently serving as Vice President of
Special Projects, where he oversaw the strategic integration of
major acquisitions, including Pangiam.
- BigBear.ai receives additional “Awardable” status for DoD’s
work in the Chief Digital and Artificial Intelligence Office’s
(CDAO) Tradewinds Solutions Marketplace – BigBear.ai announced
additional “Awardable” status through the CDAO Tradewinds Solutions
Marketplace. The Tradewinds Solutions Marketplace is the premier
offering of Tradewinds, the DoD’s suite of tools and services
designed to accelerate the procurement and adoption of Artificial
Intelligence (AI)/Machine Learning (ML), data, and analytics
capabilities. Available capabilities include Trueface, BigBear.ai's
proprietary facial recognition software, and support for the U.S.
DoD Joint Staff J3’s ORION, a technology-enabled decision-making
platform.
The following information and other sections of this release
contain forward-looking statements, which are based on the
Company’s current expectations. Actual results may differ
materially from those projected. It is the Company’s practice not
to incorporate adjustments into its financial outlook for proposed
acquisitions, divestitures, changes in law, or new accounting
standards until such items have been consummated, enacted, or
adopted, as the case may be. For additional factors that may impact
the Company’s actual results, refer to the “Forward-Looking
Statements” section in this release.
For the year-ended December 31, 2024, the Company projects:
- Revenue between $165 million and $180 million.
- The projections include the results of Pangiam after the
acquisition date of February 29, 2024.
*These are non-GAAP measures. Refer to the “Non-GAAP Financial
Measures” section in this press release.
Summary of Results for the
Third Quarter and Nine Months Ended
September 30, 2024 and
September 30, 2023
(Unaudited)
Three Months Ended September
30,
Nine Months Ended
September 30,
$ thousands (expect per share amounts)
2024
2023
2024
2023
Revenues
$
41,505
$
33,988
$
114,409
$
114,601
Cost of revenues
30,739
25,579
85,594
87,016
Gross margin
10,766
8,409
28,815
27,585
Operating expenses:
Selling, general and administrative
17,485
15,533
57,797
52,825
Research and development
3,820
(349
)
8,529
3,004
Restructuring charges
—
—
1,317
780
Transaction expenses
—
1,437
1,450
1,437
Goodwill impairment
—
—
85,000
—
Operating loss
(10,539
)
(8,212
)
(125,278
)
(30,461
)
Interest expense
3,541
3,540
10,647
10,656
Net (decrease) increase in fair value of
derivatives
(1,278
)
(15,659
)
14,832
(1,971
)
Other income
(647
)
(87
)
(1,719
)
(87
)
(Loss) income before income
taxes
(12,155
)
3,994
(149,038
)
(39,059
)
Income tax expense (benefit)
21
(5
)
22
51
Net (loss) income
$
(12,176
)
$
3,999
$
(149,060
)
$
(39,110
)
Basic and diluted net (loss) income per
share
$
(0.05
)
$
0.03
$
(0.65
)
$
(0.27
)
Weighted-average shares
outstanding:
Basic
249,951,542
155,830,775
227,900,950
146,679,444
Diluted
249,951,542
157,894,001
227,900,950
146,679,444
Other comprehensive loss
Foreign currency translation
(8
)
—
(8
)
—
Total other comprehensive loss
(8
)
—
(8
)
—
Total comprehensive (loss)
income
$
(12,184
)
$
3,999
$
(149,068
)
$
(39,110
)
Consolidated Balance Sheets as
of
September 30, 2024 and
December 31, 2023
(Unaudited)
$ in thousands
September 30,
2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
65,584
$
32,557
Accounts receivable, less allowance for
credit losses
32,464
21,949
Contract assets
1,914
4,822
Prepaid expenses and other current
assets
4,222
4,449
Total current assets
104,184
63,777
Non-current assets:
Property and equipment, net
1,519
997
Goodwill
118,621
48,683
Intangible assets, net
119,257
82,040
Right-of-use assets
9,430
4,041
Other non-current assets
1,072
372
Total assets
$
354,083
$
199,910
Liabilities and stockholders’
deficit
Current liabilities:
Accounts payable
$
4,249
$
11,038
Short-term debt, including current portion
of long-term debt
—
1,229
Accrued liabilities
26,356
16,233
Contract liabilities
2,082
879
Current portion of long-term lease
liability
1,075
779
Derivative liabilities
15,796
37,862
Other current liabilities
1,027
602
Total current liabilities
50,585
68,622
Non-current liabilities:
Long-term debt, net
195,738
194,273
Long-term lease liability
9,327
4,313
Deferred tax liabilities
—
37
Total liabilities
255,650
267,245
Stockholders’ equity (deficit):
Common stock, par value $0.0001;
500,000,000 shares authorized and 250,060,927 shares issued and
outstanding at September 30, 2024 and 157,287,522 shares issued and
outstanding at December 31, 2023
25
17
Additional paid-in capital
618,256
303,428
Treasury stock, at cost 9,952,803 shares
at September 30, 2024 and December 31, 2023
(57,350
)
(57,350
)
Accumulated deficit
(462,490
)
(313,430
)
Accumulated other comprehensive loss
(8
)
—
Total stockholders’ equity
(deficit)
98,433
(67,335
)
Total liabilities and stockholders’
equity (deficit)
$
354,083
$
199,910
Consolidated Statements of
Cash Flows for the Third Quarter and Nine Months Ended
September 30, 2024 and
September 30, 2023
(Unaudited)
Three Months Ended September
30,
Nine Months Ended
September 30,
$ in thousands
2024
2023
2024
2023
Cash flows from operating
activities:
Net (loss) income
$
(12,176
)
$
3,999
$
(149,060
)
$
(39,110
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization expense
3,394
1,971
8,740
5,936
Amortization of debt issuance costs
505
506
1,517
1,512
Equity-based compensation expense
5,168
4,793
16,074
12,592
Goodwill impairment
—
—
85,000
—
Non-cash lease expense
190
153
553
450
Provision for doubtful accounts
44
50
220
1,607
Deferred income tax (benefit) expense
—
—
(37
)
53
Net increase in fair value of
derivatives
(1,278
)
(15,659
)
14,832
(1,971
)
Loss on sale of property and equipment
—
2
—
10
Changes in assets and liabilities:
Decrease (increase) in accounts
receivable
836
7,189
(5,396
)
(546
)
(Increase) decrease in contract assets
(703
)
(106
)
3,078
860
Decrease in prepaid expenses and other
assets
297
937
1,540
6,181
(Decrease) increase in accounts
payable
(3,177
)
1,778
(8,224
)
(6,346
)
Increase in accrued liabilities
5,958
1,375
7,610
2,035
(Decrease) increase in contract
liabilities
(983
)
320
486
298
(Decrease) increase in other
liabilities
29
(728
)
(246
)
(1,794
)
Net cash used in operating
activities
(1,896
)
6,580
(23,313
)
(18,233
)
Cash flows from investing
activities:
Acquisition of business, net of cash
acquired
—
—
13,935
—
Purchases of property and equipment
(137
)
—
(304
)
(2
)
Capitalized software development costs
(4,171
)
(2,744
)
(7,396
)
(2,744
)
Net cash provided by (used in)
investing activities
(4,308
)
(2,744
)
6,235
(2,746
)
Cash flows from financing
activities:
Proceeds from issuance of shares for
exercised RDO and PIPE warrants
—
—
53,809
—
Proceeds from issuance of Private
Placement and Registered Direct Offering shares
—
—
—
50,000
Payment of Private Placement and
Registered Direct Offering transaction costs
—
(499
)
—
(5,724
)
Repayment of short-term borrowings
(417
)
(522
)
(1,229
)
(2,059
)
Proceeds from exercise of options
—
—
119
—
Issuance of common stock upon ESPP
purchase
—
531
607
531
Payments of tax withholding from the
issuance of common stock
(3
)
(1,085
)
(3,143
)
(2,217
)
Net cash provided by financing
activities
(420
)
(1,575
)
50,163
40,531
Effect of foreign currency rate changes on
cash and cash equivalents
(58
)
—
(58
)
—
Net increase in cash and cash
equivalents
(6,682
)
2,261
33,027
19,552
Cash and cash equivalents at the beginning
of period
72,266
29,923
32,557
12,632
Cash and cash equivalents at the end of
the period
$
65,584
$
32,184
$
65,584
$
32,184
EBITDA* and Adjusted EBITDA*
for the Third Quarter and Nine Months Ended
September 30, 2024 and
September 30, 2023
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
$ thousands
2024
2023
2024
2023
Net (loss) income
$
(12,176
)
$
3,999
$
(149,060
)
$
(39,110
)
Interest expense
3,541
3,540
10,647
10,656
Interest income
(635
)
(86
)
(1,807
)
(86
)
Income tax expense (benefit)
21
(5
)
22
51
Depreciation and amortization
3,394
1,971
8,740
5,936
EBITDA
(5,855
)
9,419
(131,458
)
(22,553
)
Adjustments:
Equity-based compensation
5,168
4,793
16,074
12,592
Employer payroll taxes related to
equity-based compensation(1)
29
8
741
365
Net (decrease) increase in fair value of
derivatives(2)
(1,278
)
(15,659
)
14,832
(1,971
)
Restructuring charges(3)
—
—
1,317
780
Non-recurring strategic initiatives(4)
1,568
159
4,942
2,480
Non-recurring litigation(5)
574
—
1,119
—
Transaction expenses(6)
—
1,437
1,450
1,437
Non-recurring integration costs(7)
742
—
1,625
—
Goodwill impairment(8)
—
—
85,000
—
Adjusted EBITDA
$
948
$
157
$
(4,358
)
$
(6,870
)
(1)
Includes employer payroll taxes due upon
the vesting of equity awards granted to employees.
(2)
The increase in fair value of derivatives
during the nine months ended September 30, 2024, relates to the
$42.3 million loss recorded upon the exercise of the 2023 RDO and
2023 PIPE Warrants (collectively, the “2023 Warrants”) and issuance
of the warrants in 2024 (the “2024 Warrants”) in connection with
the warrant exercise agreements entered into on February 27, 2024
and March 4, 2024. This loss is net of a $10.6 million gain related
to the issuance of the 2024 Warrants and was further offset by a
reduction of $27.4 million upon remeasurement of the 2024 Warrants
and IPO Warrants’ fair value during the nine months ended September
30, 2024. The decrease in fair value of derivatives during the
three months ended September 30, 2024 relates to remeasurement of
the 2024 Warrants and IPO Warrants’ fair value.
(3)
During the nine months ended September 30,
2024 and the nine months ended September 30, 2023, the Company
incurred employee separation costs associated with a strategic
review of the Company’s capacity and future projections to better
align the organization and cost structure and improve the
affordability of its products and services.
(4)
Non-recurring professional fees related to
the execution of certain strategic initiatives of the Company.
(5)
Non-recurring litigation consists
primarily of legal settlements and related fees for specific
proceedings that we have determined arise outside of the ordinary
course of business based on the following considerations which we
assess regularly: (1) the frequency of similar cases that have been
brought to date, or are expected to be brought within two years;
(2) the complexity of the case; (3) the nature of the remedy(ies)
sought, including the size of any monetary damages sought; (4)
offensive versus defensive posture of us; (5) the counterparty
involved; and (6) our overall litigation strategy.
(6)
Transaction expenses consist primarily of
diligence, legal and other related expenses incurred associated
with the Pangiam Acquisition.
(7)
Non-recurring internal integration costs
related to the Pangiam Acquisition.
(8)
During the nine months ended September 30,
2024, the Company recognized a non-cash goodwill impairment charge
primarily driven by a decrease in share price during the quarter
compared to the share price of the equity issued as consideration
for the purchase of Pangiam.
*These are non-GAAP measures. Refer to the
“Non-GAAP Financial Measures” section in this press release.
Adjusted EBITDA
Reconciliation* for the Third Quarter and Nine Months Ended
September 30, 2024 and
September 30, 2023
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
$ in thousands
2024
2023
2024
2023
Revenue
$
41,505
$
33,988
$
114,409
$
114,601
Net loss
(12,176
)
3,999
(149,060
)
(39,110
)
Interest expense
3,541
3,540
10,647
10,656
Interest income
(635
)
(86
)
(1,807
)
(86
)
Income tax expense (benefit)
21
(5
)
22
51
Depreciation & amortization
3,394
1,971
8,740
5,936
EBITDA
$
(5,855
)
$
9,419
$
(131,458
)
$
(22,553
)
Adjustments:
Equity-based compensation
5,168
4,793
16,074
12,592
Employer payroll taxes related to
equity-based compensation
29
8
741
365
Net (decrease) increase in fair value of
derivatives
(1,278
)
(15,659
)
14,832
(1,971
)
Restructuring charges
—
—
1,317
780
Non-recurring integration costs and
strategic initiatives
2,310
159
6,567
2,480
Non-recurring litigation
574
—
1,119
—
Transaction expenses
—
1,437
1,450
1,437
Goodwill impairment
—
—
85,000
—
Adjusted EBITDA
$
948
$
157
$
(4,358
)
(6,870
)
Gross margin
25.9
%
24.7
%
25.2
%
24.1
%
Net (loss) income margin
(29.3
)%
11.8
%
(130.3
)%
(34.1
)%
Adjusted EBITDA margin
2.3
%
0.5
%
(3.8
)%
(6.0
)%
*These are non-GAAP measures. Refer to the
“Non-GAAP Financial Measures” section in this press release.
Recurring SG&A
Reconciliation* for the Third Quarter and Nine Months Ended
September 30, 2024 and
September 30, 2023
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
$ in thousands
2024
2023
2024
2023
Selling, general and administrative
$
17,485
$
15,533
$
57,797
$
52,825
Equity-based compensation allocated to
selling, general and administrative expense
(3,029
)
(3,071
)
(9,180
)
(8,193
)
Non-recurring integration costs and
strategic initiatives
(2,310
)
(159
)
(6,567
)
(2,480
)
Non-recurring litigation
(574
)
—
(1,119
)
—
Virgin Orbit AR Reserve
—
(50
)
—
(1,475
)
Adjusted (recurring) selling, general
and administrative expense
$
11,572
$
12,253
$
40,931
$
40,677
*These are non-GAAP measures. Refer to the
“Non-GAAP Financial Measures” section in this press release.
Forward-Looking
Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act, Section 21E of the
Exchange Act and the Private Securities Litigation Reform Act of
1995. Forward-looking statements generally are accompanied by words
such as “believe,” “may,” “will,” “estimate,” “aim,” “continue,”
“anticipate,” “intend,” “expect,” “should,” “would,” “plan,”
“predict,” “project,” “potential,” “seem,” “seek,” “future,”
“outlook,” and similar words and the negative expressions thereof
that predict or indicate future events or trends or that are not
statements of historical matters. These forward-looking statements
include, but are not limited to, statements regarding BigBear.ai’s
industry, future events, and other statements that are not
historical facts. These statements are based on current
expectations and beliefs concerning future developments and their
potential effects on us and should not be relied upon as
representing BigBear’s assessment as of any date subsequent to the
date of this release. There can be no assurance that future
developments affecting us will be those that we have anticipated.
Many actual events and circumstances are beyond our control. These
forward-looking statements are subject to a number of risks and
uncertainties, including those relating to: changes in domestic and
foreign business, market, financial, political, and legal
conditions; the uncertainty of projected financial information;
delays caused by factors outside of our control, including changes
in fiscal or contracting policies or decreases in available
government funding, including as a result of events such as war,
incidents of terrorism, natural disasters, and public health
concerns or epidemics; changes in government programs or applicable
requirements; budgetary constraints, including automatic reductions
as a result of “sequestration” or similar measures and constraints
imposed by any lapses in appropriations for the federal government
or certain of its departments and agencies; influence by, or
competition from, third parties with respect to pending, new, or
existing contracts with government customers; changes in our
ability to successfully compete for and receive task orders and
generate revenue under Indefinite Delivery/Indefinite Quantity
contracts; our ability to realize the benefits of the strategic
partnerships; risks that the new businesses will not be integrated
successfully or that the combined companies will not realize
estimated cost savings; failure to realize anticipated benefits of
the combined operations; risks regarding the market and our
customers accepting and adopting our products, including future new
product offerings; the high degree of uncertainty of the level of
demand for, and market utilization of, our solutions and products;
our ability to successfully execute and realize the benefits of
joint ventures, channel sales relationships, partnerships,
strategic alliances, subcontracting opportunities, customer
contracts and other commercial agreements to which we are a party;
increased or unexpected costs or unanticipated delays caused by
other factors outside of our control, such as performance failures
of our subcontractors; risks related to the length of our sales
cycle and the time and expense associated with it; risks related to
the length of our sales cycle and the time and expense associated
with it; risks related to the rollout of the business and the
timing of expected business milestones; our ability to secure
financing or raise capital to operate and grow our business; risks
related to our existing debt and our ability to refinance it on
favorable terms; and those factors discussed in the Company’s
reports and other documents filed with the SEC, including under the
heading “Risk Factors.” If any of these risks materialize or our
assumptions prove incorrect, actual results could differ materially
from those projected by these forward-looking statements. There may
be additional risks that BigBear.ai presently does not know or that
BigBear.ai currently believes are immaterial which could also cause
actual results to differ from those contained in the
forward-looking statements. In addition, forward-looking statements
reflect BigBear.ai’s expectations, plans or forecasts of future
events and views as of the date of this release. BigBear.ai
anticipates that subsequent events and developments will cause
BigBear.ai’s assessments to change. However, while BigBear.ai may
elect to update these forward-looking statements at some point in
the future, BigBear.ai specifically disclaims any obligation to do
so. Accordingly, undue reliance should not be placed upon the
forward-looking statements.
Non-GAAP Financial
Measures
The financial information and data contained in this press
release is unaudited. Some of the financial information and data
contained in this press release, such as EBITDA, Adjusted EBITDA,
and Recurring SG&A have not been prepared in accordance with
United States generally accepted accounting principles (“GAAP”). To
supplement our unaudited condensed consolidated financial
statements, which are prepared and presented in accordance with
GAAP in our press release, we also report certain non-GAAP
financial measures. A “non-GAAP financial measure” refers to a
numerical measure of a company’s historical or future financial
performance, financial position, or cash flows that excludes (or
includes) amounts that are included in (or excluded from) the most
directly comparable measure calculated and presented in accordance
with GAAP in such company’s financial statements. Non-GAAP
financial measures should not be considered in isolation or as a
substitute for the relevant GAAP measures and should be read in
conjunction with information presented on a GAAP basis. Because not
all companies use identical calculations, our presentation of
non-GAAP measures may not be comparable to other similarly titled
measures of other companies.
The presentation of these financial measures is not intended to
be considered in isolation or as a substitute for, or superior to,
financial information prepared and presented in accordance with
GAAP and should not be considered measures of BigBear.ai’s
liquidity. Investors are cautioned that there are material
limitations associated with the use of non-GAAP financial measures
as an analytical tool. In particular, many of the adjustments to
our GAAP financial measures reflect the exclusion of certain items,
as defined in our non-GAAP definitions below, which are recurring
and will be reflected in our financial results for the foreseeable
future. In addition, these measures may be different from non-GAAP
financial measures used by other companies, even where similarly
titled, limiting their usefulness for comparison purposes and
therefore should not be used to compare BigBear.ai’s performance to
that of other companies. We endeavor to compensate for the
limitation of the non-GAAP financial measures presented by also
providing the most directly comparable GAAP measures and
descriptions of the reconciling items and adjustments to derive the
non-GAAP financial measures.
We believe these non-GAAP financial measures provide investors
and analysts with useful supplemental information about the
financial performance of our business, enable comparison of
financial results between periods where certain items may vary
independent of business performance, and allow for greater
transparency with respect to key measures used by management to
operate and analyze our business over different periods of
time.
EBITDA is defined as net loss before interest expense, interest
income, income tax (benefit) expense and depreciation and
amortization. Adjusted EBITDA is defined as EBITDA further adjusted
for equity-based compensation, employer payroll taxes related to
equity-based compensation, net increase in fair value of
derivatives, restructuring charges, non-recurring strategic
initiatives, non-recurring litigation, transaction expenses and
goodwill impairment.
Adjusted EBITDA Margin is defined as Adjusted EBITDA as a
percentage of Revenue.
Recurring SG&A is defined as selling, general and
administrative expense further adjusted for equity-based
compensation allocated to selling, general and administrative
expense, non-recurring strategic integration costs and strategic
initiatives, non-recurring litigation, and reserves on Virgin Orbit
receivables.
Similar excluded expenses may be incurred in future periods when
calculating these measures. BigBear.ai believes these non-GAAP
measures of financial results provide useful information to
management and investors regarding certain financial and business
trends relating to the Company’s financial condition and results of
operations. BigBear.ai believes that the use of these non-GAAP
financial measures provides an additional tool for investors to use
in evaluating projected operating results and trends and in
comparing BigBear.ai’s financial measures with other similar
companies, many of which present similar non-GAAP financial
measures to investors.
Management does not consider these non-GAAP measures in
isolation or as an alternative to financial measures determined in
accordance with GAAP. The principal limitation of these non-GAAP
financial measures is that they exclude significant expenses and
income that are required by GAAP to be recorded in the Company’s
financial statements. In addition, they are subject to inherent
limitations as they reflect the exercise of judgment by management
about which expense and income items are excluded or included in
determining these non-GAAP financial measures.
Management uses EBITDA, Adjusted EBITDA, Adjusted EBITDA margin
and Recurring SG&A as non-GAAP performance measures which are
reconciled to the most directly comparable GAAP measure, in the
tables below. The Company does not reconcile forward-looking
non-GAAP financial measures to the most directly comparable GAAP
financial measure (or otherwise describe such forward-looking GAAP
measure) because it is not able to forecast the most directly
comparable measure calculated and presented in accordance with GAAP
without unreasonable effort. Certain elements of the composition of
the GAAP amounts are not predictable, making it impracticable for
the Company to forecast. As a result, no guidance for the Company’s
net (loss) income or reconciliation of the Company’s Adjusted
EBITDA guidance is provided. For the same reasons, the Company is
unable to assess the probable significance of the unavailable
information, which could have a potentially significant impact on
its future net (loss) income.
We present reconciliations of these non-GAAP financial measures
to the most directly comparable GAAP measures in the tables
above.
About BigBear.ai
BigBear.ai is a leading provider of AI-powered decision
intelligence solutions for national security, digital identity, and
supply chain management. Customers and partners rely on
BigBear.ai’s predictive analytics capabilities in highly complex,
distributed, mission-based operating environments. Headquartered in
Columbia, Maryland, BigBear.ai is a public company traded on the
NYSE under the symbol BBAI. For more information, visit
https://bigbear.ai/ and follow BigBear.ai on LinkedIn: @BigBear.ai
and X: @BigBearai.
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