BigBear.ai Reverses First-Quarter Revenue Decline

The Tip Desk · November 8, 2026 · 3 min read

Second-quarter revenue rose 13% to $36.7 million as Ask Sage GenAI platforms lifted the top line.

BigBear.ai Holdings (BBAI), a specialized defense and security technology company providing mission-ready AI, reported second-quarter 2026 revenue of $36.7 million, up 13% from $32.5 million a year earlier.

The increase reversed a first-quarter decline. In the three months ended March 31, revenue had fallen 1% to $34.4 million from $34.8 million a year earlier, which the company attributed primarily to lower volume on Army programs, substantially offset by revenue from the Ask Sage acquisition that closed in the fourth quarter of 2025. For the second quarter, the company said the year-over-year increase was due to revenue from Ask Sage’s GenAI Platforms and Products.

Gross margin was 32.8% in the second quarter, compared with 25.0% in the second quarter of 2025, a 781-basis-point expansion. The company said the margin improvement was due to increased volume from Ask Sage’s higher-margin GenAI Platforms and Products. In the first quarter, gross margin had been 34.0%, up from 21.3% a year earlier.

Selling, general, and administrative expenses rose $10.4 million from $21.5 million in the second quarter of 2025 to $31.8 million. The company said the increase was primarily driven by higher intangible-asset amortization from the Ask Sage acquisition, legal and proxy expenses related to a special stockholder meeting and a new Retail Voting Program, and higher sales and marketing costs from partnerships and an expanded growth team.

Net loss narrowed to $25.7 million from $228.6 million a year earlier. The company said the decrease was primarily driven by a $135.3 million reduction in the loss from non-cash changes in the fair value of derivatives, a $70.6 million decrease in goodwill impairment, a $4.1 million decrease in interest expense, $3.9 million of higher gross margin, and $2.1 million of increased interest income.

Backlog stood at $269.6 million as of June 30, 2026, up 9% from December 31, 2025. Total available cash and investments were $409.8 million as of June 30.

The company affirmed full-year 2026 revenue guidance of $135 million to $165 million. Chief Executive Kevin McAleenan said the company was on track for a 17% revenue-growth target and intended to accelerate, with the second half of 2026 focused on execution discipline, positioning for accretive M&A, and building momentum for stronger topline growth in 2027.

In the first quarter, the company had settled the remaining $124.6 million of 2029 convertible notes, primarily through debt-to-equity conversion features exercised in January 2026, reducing interest expense by $4.8 million versus the year-ago quarter. Cash and investments were $431.5 million as of March 31, 2026. Backlog had been $281.9 million after a 14% increase from the fourth quarter, which the company said was driven primarily by a $53 million sole-source prime classified award.

The company said it will hold a conference call on October 27, 2026, to discuss financial results for the quarter ended September 30, 2026.