BigBear.ai Holdings, Inc. BBAI reported first-quarter 2026 results, with earnings meeting the Zacks Consensus Estimate and revenues surpassing the same. The company’s top line declined slightly year over year, while margins improved on higher contributions from generative AI offerings.
Despite the mixed quarterly performance, the company’s shares declined 3.6% in the after-hours trading session yesterday.
Nonetheless, management reaffirmed its 2026 revenue outlook, supported by continued momentum in national security and generative AI programs.
BigBear.ai’s Q1 Earnings & Revenues
In the first quarter of 2026, BigBear.ai reported a loss per share of 8 cents, in line with the Zacks Consensus Estimate. In the prior-year quarter, the company reported a loss per share of 25 cents.
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 $34.4 million, beating the Zacks Consensus Estimate of $33.6 million by 2.5%. The figure declined 1% from $34.8 million reported in the year-ago quarter. The downside primarily reflected lower volume on Army programs, partially offset by contributions from the Ask Sage acquisition.
BBAI’s Contract Momentum
Management highlighted that national security and trade & travel remain the company’s key growth markets. The company stated that recent contract wins totaling nearly $75 million reinforce its strategy of focusing on mission-critical artificial intelligence solutions for defense and government customers.
BigBear.ai also launched an internal realignment initiative during the quarter. The move is intended to align sales, technology, delivery and customer success teams more closely with high-priority growth areas and evolving customer requirements.
BigBear.ai exited the quarter with a backlog of $281.9 million, up 14% sequentially, supported by more than $60 million in national security contracts. The backlog increase during the quarter was largely due to a sole-source classified prime award valued at $53 million.
BigBear.ai’s Margin Performance Improves
Gross profit totaled $11.7 million in the first quarter compared with $7.4 million reported in the prior-year quarter. Gross margin expanded significantly to 34% from 21.3% a year ago.
The improvement was driven by higher-margin revenues from Ask Sage’s generative AI platform and product offerings. Management noted that generative AI revenues contributed meaningfully to margin expansion during the quarter.
Selling, general and administrative expenses increased to $29.2 million from $22.7 million in the prior-year quarter. The rise was primarily caused by higher intangible asset amortization tied to the Ask Sage acquisition, increased legal and proxy-related expenses, and higher sales and marketing investments aimed at expanding the company’s growth initiatives.
Research and development expenses increased to $5.5 million from $4.2 million in the prior-year quarter.
BBAI Reports Lower Net Loss
BigBear.ai reported a net loss of $56.8 million in the first quarter compared with a net loss of $62 million in the year-ago quarter.
This improvement was primarily driven by lower interest expense, stronger gross margins and increased interest income. Interest expense declined sharply to $0.3 million from $5.1 million a year ago, following the settlement of the remaining $124.6 million of 2029 convertible notes earlier in the year.
The company also recorded a non-cash loss on extinguishment of debt of $15.8 million related to the conversion of the 2029 Notes into equity.
On a non-GAAP basis, adjusted EBITDA was a loss of $9.9 million compared with a loss of $7 million in the year-ago quarter. The wider adjusted EBITDA loss reflected increased operating expenses despite stronger gross margins.
BigBear.ai’s Balance Sheet & Liquidity
BigBear.ai ended the first quarter with total available cash and investments of $431.5 million compared with total cash and investments of $462 million as of Dec. 31, 2025. Cash, cash equivalents and restricted cash totaled $106.7 million at quarter-end.
The company significantly reduced its debt profile during the quarter. Long-term debt was eliminated following the conversion of the 2029 Notes, leaving only $16.5 million related to the 2026 Notes outstanding.
Net cash used in operating activities was $18 million during the quarter compared with $6.7 million in the prior-year period.
BigBear.ai Affirms 2026 Revenue Outlook
Management reaffirmed its 2026 revenue guidance of $135-$165 million.
The company stated that strengthening pipeline activity, recent national security contract wins and increased contributions from generative AI solutions position it to meet the full-year top-line objectives.
BBAI’s Zacks Rank & Other Stocks to Consider
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.
Some better ranked stocks worth considering in the broader Zacks Computer and Technology sector are Micron Technology MU, Broadcom AVGO and NVIDIA NVDA. Micron Technology sports a Zacks Rank #1 at present, while Broadcom and NVIDIA each carry a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Micron Technology’s fiscal 2026 earnings has been revised upward by a penny to $58.36 per share in the past 30 days, suggesting an increase of 604% from fiscal 2025’s reported figure. Micron Technology shares have surged 124.3% year to date (YTD).
The Zacks Consensus Estimate for Broadcom’s fiscal 2026 earnings has moved northward by 9 cents to $11.45 per share over the past 30 days and calls for a year-over-year jump of 67.9%. Broadcom shares have soared 23.5% YTD.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 earnings has moved upward by 4 cents to $8.07 per share in the past 30 days, implying a year-over-year improvement of approximately 69.2%. NVIDIA shares have risen 5.4% YTD.
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BigBear.ai Holdings, Inc. (BBAI) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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