Summary
BigBear.ai closed the second quarter of 2024 with revenue of $39.8 million, up 3.4% from $38.5 million in the prior-year quarter. A full quarter of Pangiam revenue, following the acquisition that closed on February 29, 2024, offset the planned wind-down of the Air Force EPASS program in mid-2023. Gross profit rose 23.4% to $11.1 million from $9.0 million, and gross margin improved to 27.8% from 23.3% on a mix that leaned toward higher margin solutions.
The year-to-date picture is weaker. Revenue of $72.9 million fell 9.6% from $80.6 million, and gross profit of $18.0 million was down 5.9%. Six-month gross margin still edged up to 24.8% from 23.8%.
Profitability remains the central problem. The operating loss widened to $16.7 million in the quarter from $10.2 million, and operating margin slipped to -41.9% from -26.6%. Net loss narrowed to $11.7 million from $16.9 million, and diluted loss per share improved to $0.05 from $0.12. That improvement leans on an $11.0 million change in the fair value of warrants issued in 2024. Higher non-recurring integration and strategic initiatives of $2.1 million and higher equity-based compensation of $1.8 million worked the other way, and total SG&A climbed to $23.4 million from $16.9 million.
The six-month operating loss widened to $114.7 million from $22.2 million, with operating margin falling to -157.4% from -27.6%. Net loss for the six months widened to $136.9 million from $43.1 million, and diluted loss per share widened to $0.63 from $0.30. Those figures include a non-cash goodwill impairment charge booked in the first half. Adjusted EBITDA, a non-GAAP measure, was negative $3.7 million for the quarter versus negative $3.2 million a year earlier, as recurring SG&A rose $2.7 million to $15.8 million from $13.1 million.
Cash and cash equivalents were $72.3 million at June 30, 2024, and the company reports total available liquidity of $97.3 million, which counts $25.0 million available under its credit facilities. Operating cash flow was negative $7.1 million for the quarter, an improvement of 44.8% from negative $12.8 million a year earlier. For the six months, operating cash flow improved 13.7% to negative $21.4 million from negative $24.8 million. Capital expenditures were $0.13 million in the quarter and $0.17 million year to date. Total backlog ended at $266 million, and current deferred revenue of $3.5 million rose 74.8% from $2.0 million.
Guidance moved lower. For the full year 2024, BigBear.ai adjusted its revenue guidance downward, with Pangiam included from February 29, 2024. Management tied the reduction to timing uncertainty around certain customer awards and regulatory approvals.
Operationally, ConductorOS is the story the company wants told. The distributed platform will feature in several exercises in the second half of 2024 and is paced toward general availability in 2025, including a live-fire test at the DoD's T-REX-24-2 event in August. BigBear.ai also signed a master service agreement with Heathrow Airport, and its Troy workflow engine reached Awardable status on the DoD Tradewinds Solutions Marketplace, where six of its products are now listed. Facial recognition work expanded at the Vancouver cruise terminal and at Dallas Fort Worth International Airport.
Risks are easy to spot. Most revenue comes from federal contracts, so budget debates and continuing resolutions can delay new awards. Geopolitical conflicts have slowed the pipeline and the pace of contract awards, pushing revenue into later periods. The company also disclosed that it was not in compliance with the covenants of its Senior Revolver as of June 30, 2024 and cannot draw on that facility, and it carries $200.0 million of convertible notes due December 15, 2026.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2024 | Q1 FY2024 | QoQ | Q2 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $39.8M | $33.1M | +20.1% | $38.5M | +3.4% |
| Gross profit | $11.1M | $7.0M | +58.4% | $9.0M | +23.4% |
| Gross margin | 27.8% | 21.1% | +6.7 pp | 23.3% | +4.5 pp |
| Research & development | $3.6M | $1.1M | +211.6% | $2.2M | +60.2% |
| Sales & marketing | $23.4M | $16.9M | +37.9% | $16.9M | +38.0% |
| Operating income (loss) | -$16.7M | -$98.1M | +83.0% | -$10.2M | -63.2% |
| Operating margin | -41.9% | -296.1% | +254.2 pp | -26.6% | -15.3 pp |
| Net income (loss) | -$11.7M | -$125.1M | +90.6% | -$16.9M | +30.5% |
| Net margin | -29.5% | -377.9% | +348.4 pp | -43.9% | +14.4 pp |
| Diluted EPS | -$0.05 | -$0.67 | +$0.62 | -$0.12 | +$0.07 |
Risks
The majority of revenue comes from federal government contracts, and MD&A notes that continuing resolutions may delay new contract awards while the FY2025 budget process remains subject to debate, compromise, and the 2024 elections. Shifting funding priorities could materially affect defense spending and the Company's federal contracts.
The Company recognized an $85.0 million non-cash goodwill impairment charge during the six months ended June 30, 2024, driven primarily by a decrease in share price during the quarter compared to the share price of equity issued as consideration for the Pangiam acquisition.
As of June 30, 2024, the Company was not in compliance with the covenants of the Senior Revolver and is currently unable to draw on it. Although the liquidity table shows $25.0 million of available borrowings from existing credit facilities, MD&A states the Senior Revolver is not drawable until Adjusted EBITDA requirements are met.
MD&A states that conflicts in Ukraine, the Middle East, and heightened Pacific tensions have slowed the pipeline and pace of contract awards, pushing revenue into subsequent periods. If these conflicts worsen, greater technology industry or global economic disruption could negatively affect business and results.
The Pangiam Acquisition closed on February 29, 2024 and contributed non-recurring integration costs of $0.9 million in the three and six months ended June 30, 2024; SG&A increased 38.0% in Q2 partly due to integration, strategic initiative, and litigation costs.
SaaS KPIs
All quarters →Total Backlog
Adjusted EBITDA
Adjusted EBITDA Margin
Recurring SG&A
Adjusted Gross Margin
Gross Margin
Summary, forecast, risks and KPIs are extracted from BigBear.ai Holdings, Inc.'s SEC filings for Q2 FY2024 (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.