BigBear.ai (NYSE:BBAI) executives used the company’s fourth quarter 2025 and full-year earnings call to highlight a year of balance sheet restructuring, international expansion efforts, and two recent acquisitions aimed at strengthening its position in national security and travel-and-trade markets.
Strategic priorities and operating backdrop
CEO Kevin McAleenan said 2025 was focused first on “strengthen[ing] the foundations and fundamentals of the business,” including rebuilding the company’s financial position to enable faster investment in technology and talent. He said that as of year-end 2025, BigBear.ai is in “the strongest financial position in the company’s history,” pointing to reduced debt and “record liquidity,” and noted the company finished the year within its revenue forecast despite what he described as the longest government shutdown in history.
On the market environment, McAleenan pointed to three developments he said align with the company’s strengths: a U.S. National Security Strategy calling for closer public-private collaboration and focus on cross-border threats; rapid progress in frontier AI capabilities late in the fourth quarter; and the U.S. Department of War’s AI Acceleration Strategy, which he said emphasizes shortened adoption timelines and agentic architectures, including a goal that commercial models be deployable to government partners within 30 days of public release.
Acquisitions: Ask Sage and CargoSeer
McAleenan said BigBear.ai completed the acquisition of Ask Sage on December 31. He described Ask Sage as a model-agnostic platform for secure distribution of generative AI models and agentic capabilities for defense, security, and other highly regulated sectors, emphasizing that it “doesn’t lock customers into any particular frontier model.” He added that integration work is underway nine weeks after closing.
Management also addressed leadership changes connected to Ask Sage, saying Nicolas Chaillan transitioned from his CTO role for personal reasons. McAleenan said Chaillan will provide technical advice to ensure continuity for customers using the platform.
Shortly after the Ask Sage deal, the company acquired the CargoSeer technology platform. McAleenan said CargoSeer’s AI shipment inspection platform is designed for non-intrusive cargo inspection by combining automated image analysis, computer vision, machine learning, and cargo/trade data to help customs and security operators identify high-risk shipments and improve inspection efficiency across ports of entry. He also cited use cases tied to fraud and customs violations, contraband and narcotics interdiction, counterfeit goods, agricultural threats, and evidence supporting human trafficking detection, while arguing that improved inspection capabilities can facilitate trade by reducing wait times at ports and borders.
Business traction: defense, trade, and airport deployments
McAleenan said Ask Sage has continued to scale across the U.S. government, with adoption metrics and utilization growing month-over-month. He said the company is cross-selling the platform into BigBear.ai’s existing customer base beyond the Department of War and is accelerating development of an “edge offering,” which he described as a turnkey ruggedized portable hardware system about the size of a carry-on suitcase for denied, degraded, intermittent, and limited-bandwidth environments such as forward operating bases and naval vessels.
He added that the company is pursuing capture campaigns tied to funding from the “One Big Beautiful Bill,” expanding pipeline across the Department of Homeland Security and Defense. McAleenan also cited a strategic partnership with C Speed, a software-defined radar company, to extend capabilities for real-time intelligence and operational support in contested environments, as well as collaboration with shipbuilder Fincantieri related to shipyard AI solutions.
In travel and trade, McAleenan said the company announced a partnership with Abu Dhabi Ports Group at the end of January to develop “next-generation AI-powered customs management systems for ports and borders,” leveraging advanced analytics and AI image analysis to improve efficiency, streamline customs processes, and enhance trade facilitation.
He also said the company’s veriScan platform expanded in North America, and is now live at:
- Chicago O’Hare
- Seattle-Tacoma International Airport
- Nashville
- Calgary International Airport
These deployments support biometrically enabled enhanced passenger processing programs, which he said improve security, accelerate processing times, and enhance traveler experience.
Fourth quarter results: revenue decline, margin headwinds, and notable items
CFO Sean Ricker reported fourth quarter revenue of $27.3 million, down $16.5 million year-over-year, primarily due to lower volume on Army programs that management said had been discussed on previous calls and accounted for in earlier guidance.
Gross margin in the quarter was 20.4%, compared with 37.4% in the prior-year period. Ricker attributed the year-over-year decline primarily to one-time items in the fourth quarter of 2024 that did not recur in 2025, including “high-margin license deliveries” and a “fringe and overhead true-up.”
Operating expense trends were mixed. SG&A expenses rose to $25.7 million from $22.2 million, driven largely by marketing investments that management said were previously planned. R&D increased to $4.8 million from $2.3 million, reflecting continued investment in new capabilities across national security and travel and trade.
Net loss for the quarter was $5.8 million, compared with a net loss of $138.2 million in the year-ago period. Ricker said the change was primarily due to a non-cash gain of $143.4 million on the fair value of derivatives, the absence of a $31.3 million loss on extinguishment of debt that occurred in the fourth quarter of 2024, an income tax benefit of $21.8 million related to the Ask Sage acquisition, and $6.2 million of higher interest income tied to investments. These items were partially offset by a non-cash impairment of long-lived assets of $53.4 million recorded in the fourth quarter of 2025.
Adjusted EBITDA was -$10.3 million, down from $2.0 million in the comparable period, reflecting lower revenue and gross margin and increased SG&A and R&D spend.
Balance sheet actions, controls update, and 2026 outlook
Ricker said the company raised $693 million in proceeds during 2025 through at-the-market facilities and warrant exercises and used that momentum to close the Ask Sage acquisition. In 2026, he said the company closed the CargoSeer acquisition and fully settled its 2029 notes by forcing conversion into common stock, which he said will save almost $9 million of annualized interest expense through the end of 2029. He added the company intends to settle the remaining $17 million of 2026 notes at maturity at the end of the year.
On governance and reporting, Ricker said the company transitioned out of emerging growth company status and is now subject to SOX 404(b) requirements. He said the company’s auditor issued a clean, unqualified opinion on internal controls, and that a previously disclosed material weakness was remediated as of December 31, 2025.
For 2026, management guided to full-year revenue between $135 million and $165 million. Ricker said the outlook includes results from Ask Sage and CargoSeer and represents about 17% growth from full-year 2025 revenue. He said the company is not providing adjusted EBITDA guidance “given the pace of play in the AI markets” and planned investments to integrate acquisitions and expand internationally and across the growth team.
Ricker also discussed a proxy solicitation to amend the certificate of incorporation to authorize 500 million shares of common stock for future use. He said Glass Lewis and ISS recommended a vote in favor, the board unanimously supports it, more than eight in 10 shareholders have voted for the amendment, and as of the call the company was about 97% of the way to securing the votes needed for passage.
In closing remarks, McAleenan emphasized BigBear.ai’s base of former operators and focus on delivering “mission-ready AI” for highly regulated, operational environments, saying the company aims to help customers apply emerging technology securely and rapidly amid an intense global strategic moment.
About BigBear.ai (NYSE:BBAI)
BigBear.ai is a provider of artificial intelligence (AI) and data analytics solutions designed to deliver actionable insights for public sector and commercial clients. Headquartered in Columbia, Maryland, the company specializes in advanced analytics, machine learning, predictive modeling and network analysis to support decision-making in complex, data-rich environments. Its clientele spans defense and intelligence agencies, civil government organizations and enterprise businesses seeking to enhance mission outcomes and operational efficiency.
The company’s flagship offerings include an AI-driven analytics platform that integrates data engineering, algorithm development and visualization tools.
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