BigBear.ai Second Quarter 2025 Results: Revenue Drops, Outlook Revised
BigBear.ai Second Quarter 2025 Results: Revenue Drops, Outlook Revised BigBear.ai has released its second quarter 2025 results, and the numbers are stirring mixed reactions across the tech and investment community. With revenue sliding, losses widening, and a trimmed financial outlook, the company faces both near-term challenges and long-term opportunities.
Q2 2025 Performance at a Glance
The company reported $32.5 million in revenue, an 18% drop year-over-year from $39.8 million in Q2 2024. The decline was largely tied to reduced volume in certain U.S. Army programs, a key source of contracts for BigBear.ai.
Gross margin came in at 25%, slightly down from 27.8% last year, reflecting increased costs and tighter contract margins.
Net losses widened sharply to $228.6 million, compared to just $14.4 million a year earlier. This jump was driven by two major non-cash items:
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A $135.8 million swing in the fair value of derivative liabilities.
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A $70.6 million goodwill impairment.
On an adjusted basis, EBITDA came in at a loss of $8.5 million, compared to a $3.7 million loss in the prior year’s quarter.
Despite these figures, the company ended the quarter with a backlog of $380 million, signaling strong future contract potential.
Revised Financial Outlook for 2025
BigBear.ai originally projected $160–$180 million in revenue for 2025. That range has now been cut to $125–$140 million. The lowered forecast stems from the U.S. Army consolidating and modernizing its contract structures, creating short-term disruption.
Notably, the company withdrew its Adjusted EBITDA guidance, citing uncertainty around upcoming investments and potential contract wins.
CEO and CFO Insights
Kevin McAleenan, BigBear.ai’s CEO, acknowledged the challenging environment but expressed optimism about the future. He pointed to the “One Big Beautiful Bill” (OB3), a $320 billion federal investment initiative aimed at homeland security and defense, as a potential growth driver.
The company is also expanding internationally, with a strategic partnership in the UAE designed to accelerate global adoption of its AI solutions.
Sean Ricker, the CFO, emphasized BigBear.ai’s strong liquidity, noting a record $390.8 million cash balance. This cash cushion, he said, gives the company the flexibility to invest aggressively in growth opportunities, both in the U.S. and overseas.
Market Reaction
Investors didn’t respond kindly to the Q2 report. Shares of BigBear.ai plunged over 25% after hours, reflecting concerns about shrinking revenue guidance and widening losses. While the long-term story may remain compelling for some, the short-term outlook has clearly rattled market confidence.
Key Takeaways for Stakeholders
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Revenue Headwinds: Army program changes are weighing heavily on short-term earnings.
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Strong Cash Position: With nearly $400 million in cash, BigBear.ai has the resources to pursue strategic growth.
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Government Funding Opportunities: OB3 could bring significant contract wins if the company positions itself effectively.
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International Expansion: New partnerships may help diversify revenue streams and reduce dependency on U.S. military contracts.
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Uncertainty in Earnings: The withdrawal of EBITDA guidance leaves analysts without a clear profitability roadmap.
Final Thoughts
The BigBear.ai second quarter 2025 results paint a picture of a company in transition. On one hand, revenue declines and mounting losses present real challenges. On the other, a substantial cash reserve, promising backlog, and access to massive government funding programs give BigBear.ai multiple paths to recovery and growth.
For now, the company’s success will depend on how well it navigates contract shifts, executes its global expansion, and turns its AI technology into sustained revenue streams.
