BigBear.ai Holdings, Inc. (BBAI)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 revenue was $43.8M, up 8% year-over-year and 5.6% sequentially; gross margin expanded to 37.4% vs. 32.1% last year, aided by a $2.7M year-end allocation true-up .
• Non-GAAP adjusted EBITDA was $2.0M (4.5% margin), down from $3.7M in Q4 2023 but above Q3’s $0.9M; GAAP net loss widened to $108.0M due to $93.3M non-cash derivative fair value changes tied to 2029 notes and warrants .
• Ending backlog reached $418M (+2.5x YoY), while year-end cash was $50.1M; subsequent Q1 2025 warrant exercises and note conversions reduced net debt to $27M and improved Debt-to-Cash ratio from 4.0 to 1.2 .
• 2025 guidance: revenue $160–$180M and adjusted EBITDA negative single-digit millions, reflecting a disciplined approach amid potential federal budget delays/continuing resolutions .
• Shares fell ~25% following the release, with the market reacting to the large GAAP loss and cautious 2025 outlook .

What Went Well and What Went Wrong

• What Went Well

  • Backlog expansion: Ending backlog increased to $418M (+$250M YoY, 2.5x), supporting forward visibility in defense/digital identity .
  • Margin improvement: Gross margin rose to 37.4% (Q4 2024) from 32.1% (Q4 2023), aided by $2.7M fringe/overhead true-up allocations; management emphasized disciplined cost control .
  • Balance sheet actions: Exchanged $182.3M 2026 notes for 2029 notes; ~$58M converted to equity in Q1 2025; net debt fell to $27M and Debt-to-Cash ratio improved to 1.2, enhancing financial flexibility .
  • “2024 was a pivotal year… momentum through major contract wins, expanding our backlog and growing our pipeline…” — CEO Kevin McAleenan .

• What Went Wrong

  • Large GAAP loss: Q4 net loss of $108.0M driven by $93.3M non-cash derivative fair value changes and earlier $85.0M goodwill impairment in 2024; adjusted EBITDA declined YoY .
  • Higher SG&A: Q4 SG&A increased to $22.2M (Recurring SG&A $18.0M) due to Pangiam costs and year-end true-up offsets, pressuring adjusted EBITDA vs. prior year .
  • Guidance caution and external headwinds: 2025 outlook calls for negative adjusted EBITDA and highlights risk from federal continuing resolutions and potential shutdowns lengthening award/start timelines .

Financial Results

KPIs (operational and balance sheet)

Segment breakdown: Not disclosed in Q4 materials .

Estimate comparison: S&P Global consensus (EPS/Revenue) was unavailable due to request limits; estimate comparison not provided.

Guidance Changes

Note: No guidance provided for margins, OpEx, OI&E, tax rate, or dividends in Q4 disclosures .

Earnings Call Themes & Trends

(Transcript unavailable; themes derived from press releases and investor letters.)

Management Commentary

• “2024 was a pivotal year… 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.” — Kevin McAleenan, CEO .
• “We’ve kicked off the first quarter of 2025 by significantly deleveraging our balance sheet… strong position for growth in 2025 and beyond.” — Julie Peffer, CFO .
• Investor Letter: Federal continuing resolution creates funding uncertainty and delays in new contract starts; FY25 guidance reflects disciplined internal focus and dynamic external environment .

Q&A Highlights

• A full Q4 2024 earnings call transcript was not available in our document catalog or investor site archives during the period searched; therefore, Q&A themes and clarifications cannot be provided. We searched SEC/IR press releases and transcript repositories for March 2025 and found no accessible transcript via our tools and .

Estimates Context

• S&P Global consensus estimates (Primary EPS Consensus Mean, Revenue Consensus Mean, # of estimates) for Q4 2024 could not be retrieved due to SPGI request limits; as a result, numerical estimate comparisons are unavailable at this time.

Key Takeaways for Investors

• Revenue/margin traction: Q4 revenue of $43.8M beat prior year, and gross margin expanded to 37.4% aided by a $2.7M year-end allocation true-up; however, adjusted EBITDA declined YoY and GAAP net loss widened materially due to derivative mark-to-market .
• Backlog strength with variability: Backlog remains elevated at $418M (+2.5x YoY), but quarter-to-quarter swings (Q3: $437M vs. Q4: $418M) signal award timing and ramp variability in core federal programs .
• Deleveraging improves flexibility: Post-quarter warrant exercises and note conversions reduced net debt to $27M and Debt-to-Cash from 4.0 to 1.2, enhancing optionality for investment in high-impact AI initiatives .
• Cautious FY25 guide: Revenue $160–$180M with negative adjusted EBITDA reflects disciplined execution amid continuing resolution risks; investors should expect “lumpy” quarters given federal procurement dynamics .
• Non-GAAP normalization: Reported GAAP loss includes $93.3M derivative fair value changes and prior $85.0M goodwill impairment; focusing on adjusted EBITDA helps assess operational progress, but rising Recurring SG&A warrants monitoring .
• Contract momentum: Recent Army GFIM-OE production award and CDAO prototype wins (VANE, ORION DSP) support the defense AI thesis and may underpin medium-term growth as deployments scale .
• Trading setup: Post-release share decline (~25%) reflects market sensitivity to GAAP loss and cautious outlook; near-term moves likely hinge on contract conversions, budget clarity, and sustained margin discipline .