BigBear.ai Announces Fourth Quarter, And Full Year 2024 Results, And Provides 2025 Outlook
-- 4Q 24 revenue of $43.8 million (4Q 23 $40.6 million) +8% year-over-year
-- Exchanged $182.3 million in 6.00% convertible senior notes due in 2026
for 6.00% convertible senior secured notes due in 2029; $58 million has
already converted into equity since the end of 4Q 24 resulting in $142.3
million remaining debt on convertible notes.
-- Cash balance of $50.1 million, as of December 31, 2024; During 1Q 25,
received gross proceeds of $64.7 million of cash, following the exercise
of previously issued warrants; combined with $58 million of conversions
on convertible debt, net debt 1 has decreased from $150 million to $27
million and debt-to-cash ratio 2 has decreased from 4.0 to 1.2 since the
end of 4Q 24.
-- 2025 Outlook provided between $160 million - $180 million revenue, and
negative single digit Adjusted EBITDA*
MCLEAN, Va.--(BUSINESS WIRE)--March 06, 2025--
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 fourth quarter of 2024 and issued an investor presentation that has been posted to the Investor Relations section of the Company's website.
"2024 was a pivotal year for the business. We demonstrated momentum through major contract wins, expanding our backlog and growing our pipeline, maturing our technology portfolio, and restructuring our debt to strengthen our financial position for the long term. These efforts were driven by strong execution from our team," said Kevin McAleenan, Chief Executive Officer, BigBear.ai.
"On the financial front, we've kicked off the first quarter of 2025 by significantly deleveraging our balance sheet. Through a combination of cash proceeds from warrant exercises and debt reductions resulting from conversions on our convertible notes, we're in a strong position for growth in 2025 and beyond," said Julie Peffer, Chief Financial Officer, BigBear.ai.
Financial Highlights
-- Revenue increased 8% to $43.8 million for the fourth quarter of 2024,
compared to $40.6 million for the fourth quarter of 2023 primarily due to
additional revenue related to Department of Homeland Security and Digital
Identity awards.
-- Gross margin was 37.4% in the fourth quarter of 2024 as compared to 32.1%
in the fourth quarter of 2023, primarily driven by year-end fringe and
overhead true-up allocation adjustments in 4Q 24 of $2.7 million with an
offsetting increase in SG&A expenses.
-- Primarily driven by the non-cash changes in fair value of $93.3 million
from derivative liabilities related to the 2029 convertible notes and
warrants, net loss in the fourth quarter of 2024 was $108.0 million,
compared to $21.3 million for the fourth quarter of 2023.
-- Non-GAAP Adjusted EBITDA* of $2.0 million for the fourth quarter of 2024
compared to $3.7 million for the fourth quarter of 2023, primarily driven
by increased Recurring SG&A*.
-- SG&A of $22.2 million for the fourth quarter of 2024 compared to $18.2
million for the fourth quarter of 2023 and Recurring SG&A* of $18.0
million in the fourth quarter of 2024 compared to $12.3 million in the
fourth quarter of 2023. The year-over-year increases include Pangiam's
headcount and operating expenses not included in the fourth quarter of
2023 as well as year-end fringe and overhead true-up allocation
adjustments of $2.7 million in the fourth quarter of 2024 which are
offset in improved gross profit.
-- Ending backlog was $418 million as of December 31, 2024, an increase of
$250 million or 2.5x ending backlog as of December 31, 2023.
-- The consolidated year-to-date results include results from Pangiam from
the acquisition date of February 29, 2024 to December 31, 2024.
Financial Outlook
For the year-ended December 31, 2025, the Company projects:
-- Revenue between $160 million and $180 million -- Adjusted EBITDA* -- negative single digit millions
In the event that some form of US Government shutdown was to take place in 2025, or a substantial shift in government national security priorities, BigBear.ai would review its guidance as part of prudent financial planning and its efforts to build a long-term sustainable business.
The above information on Outlook, 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.
_______________________________________
(1) Net Debt is defined as principal outstanding on convertible notes, less
cash and cash equivalents.
(2) Debt-to-Cash Ratio is defined as principal outstanding on convertible
notes divided by cash and cash equivalents.
*Adjusted EBITDA is a non-GAAP financial measure. See the "Non-GAAP Financial
Measures" section in this press release for additional information and a
reconciliation.
Summary of Results for the Fourth Quarter and Year Ended
December 31, 2024 and December 31, 2023
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
---------------------------- ------------------------------
$ thousands (expect
per share amounts) 2024 2023 2024 2023
------------------- ----------- ----------- ----------- -----------
Revenues $ 43,827 $ 40,563 $ 158,236 $ 155,164
Cost of revenues 27,422 27,547 113,016 114,563
------------------- ----------- ----------- ----------- -----------
Gross margin 16,405 13,016 45,220 40,601
Operating expenses:
Selling,
general and
administrative 22,243 18,232 80,040 71,057
Research and
development 2,334 2,031 10,863 5,035
Restructuring
charges (30) 42 1,287 822
Transaction
expenses -- 1,284 1,450 2,721
Goodwill
impairment -- -- 85,000 --
------------------- ----------- ----------- ----------- -----------
Operating loss (8,142) (8,573) (133,420) (39,034)
Interest
expense 3,597 3,544 14,244 14,200
Net increase in
fair value of
derivatives 93,317 9,395 108,149 7,424
Loss on
extinguishment
of debt 3,440 -- 3,440 --
Other (income)
expense (475) (306) (2,194) (393)
------------------- ----------- ----------- ----------- -----------
Loss before taxes (108,021) (21,206) (257,059) (60,265)
Income tax
expense 13 50 35 101
------------------- ----------- ----------- ----------- -----------
Net loss $ (108,034) $ (21,256) $ (257,094) $ (60,366)
------------------- ----------- ----------- ----------- -----------
Basic and diluted
net loss per
share $ (0.43) $ (0.14) $ (1.10) $ (0.40)
Weighted-average
shares
outstanding:
Basic 250,575,733 156,818,532 233,604,500 149,234,917
Diluted 250,575,733 156,818,532 233,604,500 149,234,917
------------------- ----------- ----------- ----------- -----------
Consolidated Balance Sheets as of
December 31, 2024 and December 31, 2023
(Unaudited)
December 31, December 31,
$ in thousands 2024 2023
---------------------------------------- -------------- ----------------
Assets
Current assets:
Cash and cash equivalents $ 50,141 $ 32,557
Accounts receivable, less allowance
for credit losses 38,953 21,949
Contract assets 895 4,822
Prepaid expenses and other current
assets 3,768 4,449
---------------------------------------- --------- ---------
Total current assets 93,757 63,777
---------------------------------------- --------- ---------
Non-current assets:
Property and equipment, net 1,566 997
Goodwill 119,081 48,683
Intangible assets, net 119,119 82,040
Right-of-use assets 9,263 4,041
Other non-current assets 990 372
---------------------------------------- --------- ---------
Total assets $ 343,776 $ 199,910
---------------------------------------- --------- ---------
Liabilities and stockholders' equity
(deficit)
Current liabilities:
Accounts payable $ 8,455 $ 11,038
Short-term debt, including current
portion of long-term debt 818 1,229
Accrued liabilities 19,496 16,233
Contract liabilities 2,541 879
Current portion of long-term lease
liability 1,068 779
Derivative liabilities 170,515 37,862
Other current liabilities 73 602
---------------------------------------- --------- ---------
Total current liabilities 202,966 68,622
---------------------------------------- --------- ---------
Non-current liabilities:
Long-term debt, net 134,287 194,273
Long-term lease liability 9,120 4,313
Deferred tax liabilities -- 37
---------------------------------------- --------- ---------
Total liabilities 346,373 267,245
---------------------------------------- --------- ---------
Stockholders' equity (deficit):
Common stock, par value $0.0001;
500,000,000 shares authorized and
251,554,378 shares issued and
outstanding at December 31, 2024
and 157,287,522 shares issued and
outstanding at December 31, 2023 26 17
Additional paid-in capital 625,130 303,428
Treasury stock, at cost 9,952,803
shares at December 31, 2024 and
December 31, 2023 (57,350) (57,350)
Accumulated deficit (570,524) (313,430)
---------------------------------------- --------- ---------
Accumulated other comprehensive
income 121 --
---------------------------------------- --------- ---------
Total stockholders' equity (deficit) (2,597) (67,335)
Total liabilities and stockholders'
equity (deficit) $ 343,776 $ 199,910
---------------------------------------- --------- ---------
Consolidated Statements of Cash Flows for the Year Ended
December 31, 2024 and December 31, 2023
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
--------------------- -----------------------
$ in thousands 2024 2023 2024 2023
------------------- -------- ------- -------- -------
Cash flows from
operating
activities:
Net loss $(108,034) $(21,256) $(257,094) $(60,366)
Adjustments to
reconcile net loss
to net cash used in
operating
activities:
Depreciation
and
amortization
expense 3,133 1,965 11,873 7,901
Amortization of
debt issuance
costs 508 506 2,025 2,018
Equity-based
compensation
expense 5,053 6,079 21,127 18,671
Goodwill
impairment -- -- 85,000 --
Non-cash lease
expense 167 147 720 597
Provision for
doubtful
accounts 8 132 228 1,739
Deferred income
tax (benefit)
expense -- 35 (37) 88
Loss on
extinguishment
of debt 3,440 -- 3,440 --
Net increase
(decrease) in
fair value of
derivatives 93,317 9,395 108,149 7,424
Loss on sale of
property and
equipment -- -- -- 10
Changes in assets
and liabilities:
(Increase)
decrease in
accounts
receivable (6,357) 6,949 (11,753) 6,403
Decrease
(increase) in
contract
assets 849 (4,370) 3,927 (3,510)
Decrease
(increase) in
prepaid
expenses and
other assets 536 (282) 2,076 5,899
(Decrease)
increase in
accounts
payable 4,197 1,962 (4,027) (4,384)
(Decrease)
increase in
accrued
liabilities (10,483) 602 (2,873) 2,637
Increase
(decrease) in
contract
liabilities 28 (1,441) 514 (1,143)
(Decrease)
increase in
other
liabilities (1,168) (497) (1,414) (2,291)
------------------- -------- ------- -------- -------
Net cash used in
operating
activities (14,806) (74) (38,119) (18,307)
------------------- -------- ------- -------- -------
Cash flows from
investing
activities:
Acquisition of
business, net
of cash
acquired -- -- 13,935 --
Purchases of
property and
equipment (180) -- (484) (2)
Capitalized
software
development
costs (3,234) (1,084) (10,630) (3,828)
------------------- -------- ------- -------- -------
Net cash provided
by (used in)
investing
activities (3,414) (1,084) 2,821 (3,830)
------------------- -------- ------- -------- -------
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 -- -- -- (5,724)
Proceeds from
short-term
borrowings 817 1,229 817 1,229
Repayment of
short-term
borrowings -- -- (1,229) (2,059)
Payment of debt
issuance costs
to third
parties (349) -- (349) --
Proceeds from
exercise of
options 302 -- 421 --
Issuance of
common stock
upon ESPP
purchase 760 645 1,367 1,176
Payments of tax
withholding
from the
issuance of
common stock 765 (343) (2,378) (2,560)
------------------- -------- ------- -------- -------
Net cash provided
by financing
activities 2,295 1,531 52,458 42,062
------------------- -------- ------- -------- -------
Effect of foreign
currency rate
changes on cash
and cash
equivalents 482 -- 424 --
Net increase
(decrease) in cash
and cash
equivalents (15,443) 373 17,584 19,925
Cash and cash
equivalents at the
beginning of
period 65,584 32,184 32,557 12,632
------------------- -------- ------- -------- -------
Cash and cash
equivalents at the
end of the period $ 50,141 $ 32,557 $ 50,141 $ 32,557
------------------- -------- ------- -------- -------
EBITDA* and Adjusted EBITDA* for the Fourth Quarter and Year Ended
December 31, 2024 and December 31, 2023
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
--------------------- -----------------------
$ thousands 2024 2023 2024 2023
-------------------- -------- ------- -------- -------
Net loss $(108,034) $(21,256) $(257,094) $(60,366)
Interest expense 3,597 3,544 14,244 14,200
Interest income (486) (306) (2,293) (392)
Income tax expense
(benefit) 13 50 35 101
Depreciation and
amortization 3,132 1,965 11,872 7,901
-------------------- -------- ------- -------- -------
EBITDA (101,778) (16,003) (233,236) (38,556)
Adjustments:
Equity-based
compensation 5,053 6,079 21,127 18,671
Employer payroll
taxes related
to equity-based
compensation(1) 244 75 985 440
Net increase in
fair value of
derivatives(2) 93,317 9,395 108,149 7,424
Restructuring
charges(3) (30) 42 1,287 822
Non-recurring
strategic
initiatives(4) 1,517 545 6,459 3,025
Non-recurring
litigation(5) 23 2,250 1,142 2,250
Transaction
expenses(6) -- 1,284 1,450 2,721
Non-recurring
integration
costs(7) 175 -- 1,800 --
Goodwill
impairment(8) -- -- 85,000 --
Loss on
extinguishment
of debt(9) 3,440 -- 3,440 --
-------------------- -------- ------- -------- -------
Adjusted EBITDA $ 1,961 $ 3,667 $ (2,397) $ (3,203)
-------------------- -------- ------- -------- -------
(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 year ended December
31, 2024, relates to the $42.3 million loss recorded upon the exercise
of the 2023 RDO and 2023 PIPE Warrants (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. The additional loss relates to $(11.4) million fair
market value adjustment of the 2024 Warrants and IPO Warrants during the
year ended December 31, 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 $(11.4) million upon remeasurement of the 2024 Warrants and
IPO Warrants' fair value during the year ended December 31, 2024.
Additionally, for the year-ended December 31, 2024, $54.4 million is
related to derivative liabilities in connection with the 2029
Convertible Notes. The increase in fair value of derivatives during the
year ended December 31, 2023 primarily relates to changes in the fair
value of PIPE warrant and RDO warrants issued during the first and
second quarters of 2023.
(3) During the year ended December 31, 2024 and the year ended December 31,
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 during the year ended December 31, 2024 and
December 31, 2023 consist primarily of diligence, legal and other
related expenses incurred associated with the Pangiam acquisition.
Transaction costs incurred in 2022 are primarily related to our
acquisition of ProModel Corporation as well as costs associated with
evaluating other acquisition opportunities.
(7) Non-recurring internal integration costs related to the Pangiam
acquisition.
(8) During the year ended December 31, 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.
(9) Loss on extinguishment of debt is related to the exchange of the 6.00%
convertible senior notes due in 2026 for 6.00% convertible senior
secured notes due in 2029.
*EBITDA and Adjusted EBITDA are non-GAAP financial measures. See the "Non-GAAP
Financial Measures" section in this press release for additional information
and a reconciliation.
Adjusted EBITDA Reconciliation* for the Fourth Quarter and Year Ended
December 31, 2024 and December 31, 2023
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
--------------------------- ---------------------------
$ in thousands 2024 2023 2024 2023
-------- ------- -------- -------
Revenue $ 43,827 $ 40,563 $ 158,236 $155,164
Net loss (108,034) (21,256) (257,094) (60,366)
Interest expense 3,597 3,544 14,244 14,200
Interest income (486) (306) (2,293) (392)
Income tax expense 13 50 35 101
Depreciation &
amortization 3,132 1,965 11,872 7,901
---------------------- -------- ------- -------- -------
EBITDA $(101,778) $(16,003) $(233,236) $(38,556)
Adjustments:
----------------------
Equity-based
compensation 5,053 6,079 21,127 18,671
Employer payroll
taxes related to
equity-based
compensation(1) 244 75 985 440
Net increase in
fair value of
derivatives(2) 93,317 9,395 108,149 7,424
Restructuring
charges(3) (30) 42 1,287 822
Non-recurring
integration costs
and strategic
initiatives(4)(7) 1,692 545 8,259 3,025
Non-recurring
litigation(5) 23 2,250 1,142 2,250
Transaction
expenses(6) -- 1,284 1,450 2,721
Goodwill
impairment(8) -- -- 85,000 --
Loss on
extinguishment of
debt(9) 3,440 -- 3,440 --
---------------------- -------- ------- -------- -------
Adjusted EBITDA $ 1,961 $ 3,667 $ (2,397) $ (3,203)
Gross Margin 37.4% 32.1% 28.6% 26.2%
Net Loss Margin (246.5)% (52.4)% (162.5)% (38.9)%
Adjusted EBITDA Margin 4.5% 9.0% (1.5)% (2.1)%
---------------------- -------- ------- -------- -------
(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 year ended December
31, 2024, relates to the $42.3 million loss recorded upon the exercise
of the 2023 RDO and 2023 PIPE Warrants (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. The additional loss relates to $(11.4) million fair
market value adjustment of the 2024 Warrants and IPO Warrants during the
year ended December 31, 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 $(11.4) million upon remeasurement of the 2024 Warrants and
IPO Warrants' fair value during the year ended December 31, 2024.
Additionally, for the year-ended December 31, 2024, $54.4 million is
related to derivative liabilities in connection with the 2029
Convertible Notes. The increase in fair value of derivatives during the
year ended December 31, 2023 primarily relates to changes in the fair
value of PIPE warrant and RDO warrants issued during the first and
second quarters of 2023.
(3) During the year ended December 31, 2024 and the year ended December 31,
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 during the year ended December 31, 2024 and
December 31, 2023 consist primarily of diligence, legal and other
related expenses incurred associated with the Pangiam acquisition.
Transaction costs incurred in 2022 are primarily related to our
acquisition of ProModel Corporation as well as costs associated with
evaluating other acquisition opportunities.
(7) Non-recurring internal integration costs related to the Pangiam
acquisition.
(8) During the year ended December 31, 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.
(9) Loss on extinguishment of debt is related to the exchange of the 6.00%
convertible senior notes due in 2026 for 6.00% convertible senior
secured notes due in 2029.
*EBITDA and Adjusted EBITDA are non-GAAP financial measures. See the "Non-GAAP
Financial Measures" section in this press release for additional information
and a reconciliation.
Recurring SG&A Reconciliation* for the Fourth Quarter and
(MORE TO FOLLOW) Dow Jones Newswires
March 06, 2025 16:22 ET (21:22 GMT)
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