Summary
BigBear.ai's first quarter of 2022 exposed the cost of its pivot from a services-led business to a product-led one. Revenue rose 2.3% to $36.4 million from $35.6 million in the prior-year quarter. Gross profit went the other way, down 4.0% to $9.9 million, and gross margin slipped to 27.1% from 28.9%. Everything below the gross line moved sharply. Operating loss widened to $16.4 million from $0.8 million, operating margin fell to -45.1% from -2.1%, and net loss widened to $18.8 million from $2.4 million. Diluted loss per share was $0.14 against $0.02 a year earlier.
Non-GAAP adjusted EBITDA was negative $2.9 million, compared with positive $2.7 million in the prior-year quarter. Management attributed the swing to heavier research and development spending and to selling, general and administrative costs that carried public company requirements, stock-based compensation, commercial start-up costs, and non-recurring integration work. The mix tilted toward commercial activity, and management said first quarter commercial revenue surpassed total commercial revenue for the prior year. Adjusted gross margin was 47% in Analytics, down from 49%, and 22% in Cyber & Engineering, down from 23%. The Analytics decline reflected investment on a lower margin prototype contract that management described as its largest pursuit for 2022.
Cash turned negative. Operating cash flow swung to -$7.5 million from $0.9 million a year earlier, and capital expenditures rose to $0.4 million from $0.2 million. Free cash flow, which the company defines as operating cash flow less capital expenditures, was negative $7.9 million against positive $723,000. Financing activities used $102.1 million, mostly the $100.9 million repurchase of roughly 10 million shares tied to the Forward Share Purchase Agreements, which the company fully settled during the quarter. Cash and cash equivalents ended March 31, 2022 at $60.0 million, down from $68.9 million at December 31, 2021. Total available liquidity was $110.0 million, including $50.0 million of undrawn capacity on the Bank of America senior revolver. The $200.0 million of convertible notes carry a 6.0% rate and mature on December 15, 2026, and the company reported compliance with its covenants.
Backlog is the growth story management is selling. The press release cited ending backlog of $459 million after 11 new contract wins; the MD&A put total backlog at $458.7 million at March 31, 2022, down from $465.7 million at December 31, 2021. Funded backlog dropped to $65.3 million from $91.2 million, a detail that matters because most federal contracts are not fully funded at award. Remaining performance obligations were $136.0 million, and deferred revenue, current portion only, was $2.8 million.
Guidance for the full year 2022 was reaffirmed at $175 million to $205 million of revenue, including approximately $20 million of commercial revenue, and the CFO pointed to roughly 30% revenue growth with continued gross margin expansion. The quarter carried a reminder of how slow federal buying can be. Internal analysis of solicitations showed the time from solicitation to award stretched from 290 days to more than 600 days between 2019 and 2021, and the company worked under a continuing resolution for most of the period. COVID-19 disruptions, including the Omicron wave and the Ba.2 variant, hurt supply chains, site access, and staffing. The ProModel acquisition closed on April 7, 2022 for $16.1 million and brings simulation-based predictive software plus hundreds of new commercial customers, but integrating it is its own risk. Management also took a full valuation allowance against deferred tax assets. On the positive side, the Consolidated Appropriations Act of 2022, signed in March, added approximately $33 billion of Department of Defense spending.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2022 | Q4 FY2021 | QoQ | Q1 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $36.4M | $145.6M | -75.0% | — | — |
| Gross profit | $9.9M | $34.1M | -71.0% | — | — |
| Gross margin | 27.1% | 23.4% | +3.7 pp | — | — |
| Research & development | $2.9M | $6.0M | -52.4% | — | — |
| Sales & marketing | $22.0M | $106.5M | -79.3% | — | — |
| Operating income (loss) | -$16.4M | -$74.4M | +77.9% | -$595.1K | -2660.2% |
| Operating margin | -45.1% | -51.1% | +6.0 pp | — | — |
| Net income (loss) | -$18.8M | -$119.3M | +84.2% | -$613.8K | -2967.1% |
| Net margin | -51.7% | -81.9% | +30.2 pp | — | — |
| Diluted EPS | -$0.14 | -$1.11 | +$0.97 | — | — |
| Customers | 500 | — | — | — | — |
Risks
COVID-19 pandemic continued to cause business impacts in Q1 2022 due to the Omicron variant, with performance adversely affected by supply chain disruptions, delays, and labor challenges such as employee absences. Future impact remains uncertain and could negatively affect results.
Operating cash flow decreased to negative $7.53 million in Q1 2022 from positive $0.89 million in Q1 2021. Net loss widened to $18.83 million from $2.44 million. Despite $109.98 million in total available liquidity, continued negative cash flows could strain financial condition.
SG&A expenses as a percentage of revenues increased to 61% in Q1 2022 from 28% in Q1 2021, driven by commercial start-up costs and equity-based compensation. Operating loss widened to $16.43 million from $0.76 million.
On April 7, 2022, acquired ProModel Corporation for $16.1 million, funded by cash and stock, which may divert management attention and result in dilution. Q1 2022 transaction expenses were $1.399 million.
Majority of revenues derived from Federal Government contracts that are subject to appropriations and may not be fully funded. As of March 31, 2022, backlog included $125.69 million of unpriced unexercised options and $46.88 million of anticipated follow-on awards, which are estimates and may not materialize.
SaaS KPIs
All quarters →Total Backlog
Adjusted EBITDA
Gross Margin
Summary, forecast, risks and KPIs are extracted from BigBear.ai Holdings, Inc.'s SEC filings for Q1 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.