Q3 2025 BigBear.ai Holdings Inc Earnings Call
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As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Chief Financial Officer, Shawn Rekha. Thank you. So please go ahead.
Good afternoon, and thank you all for joining us today for our third quarter 2025 earnings call.
I'm, Sean recur CFO of Big Bear AI, and I'm joined today by our CEO Kevin Mceleney.
Statements made in today's call that are not historical fact are considered forward looking statements and are made pursuant to the safe Harbor provisions of the federal Securities laws.
Actual results may differ materially from those projected in the forward looking statements.
Please see today's press release, and our SEC filings for a description of some of the factors that may cause actual results to differ materially from those in the forward looking statements.
We have posted charts on our website today that we plan to address during the call to supplement our comments.
These charts also include information regarding non-GAAP measures that may be used in today's call.
Please access our website at Www Dot Big Bear Dot AI and click on the Investor Relations link to view and follow the charts.
With that I'd like to turn the call over to Kevin.
Good afternoon, it's good to be back speaking with our shareholders and analysts about our progress today.
Three months ago, I told you Big bear was going on offence taken advantage of our positioning in the market and our increased capital to grow organically and to strengthen our position through disciplined M&A.
Operator: At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the webcast, please press STAR then zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chief Financial Officer, Sean Ricker. Thank you, sir. Please go ahead.
Speaker #1: Host: Chief Financial Officer, Sean Ricker. Thank you, sir. Please go ahead.
Speaker #2: Good afternoon, and thank you all for joining us today for our third quarter 2025 earnings call. I'm Sean Ricker, CFO of BigBear.ai, and I'm joined today by our CEO, Kevin McAleenan.
Since then we've moved with purpose assessing markets, where we can lead evaluating strategic opportunities and engaging across our industry to identify the right targets.
Speaker #2: Statements made in today's call that are not historical fact are considered forward-looking statements, and are made pursuant to the Safe Harbor Provisions of the Federal Securities Laws.
Been intentional in every step of the process scouting the market evaluating AI technology developments and aligning around a clear thesis for value creation.
Sean Ricker: Good afternoon and thank you all for joining us today for our third quarter 2025 earnings call. I'm Sean Ricker, CFO of BigBear.ai, and I'm joined today by our CEO, Kevin McAleenan. Statements made in today's call that are not historical fact are considered forward looking statements and are made pursuant to the safe harbor provisions of the Federal Securities Laws. Actual results may differ materially from those projected in the forward looking statements. Please see today's press release and our SEC filings for a description of some of the factors that may cause actual results to differ materially from those in the forward looking statements. We have posted charts on our website today that we plan to address during the call to supplement our comments. These charts also include information regarding non-GAAP measures that may be used in today's call.
Speaker #2: Actual results may differ materially, from those projected in the forward-looking statements. Please see today's press release and our SEC filings for a description of some of the factors that may cause actual results to differ materially from those in the forward-looking statements.
That's deliberate approach has led us to a significant step forward for the company one intended to advance our vision accelerate growth and position Big Bear AI for leadership in our core national security market by capitalizing on the increasing adoption of generative AI for defense capabilities.
Speaker #2: We have posted charts on our website today that we plan to address during the call to supplement our comments. These charts also include information regarding non-GAAP measures, that may be used in today's call.
Today I'm excited to announce the big Bear has signed a definitive agreement to acquire ask phage, a cutting edge and fast growing generative AI platform for secure distribution of AI models, and Egencia capabilities built specifically for defense and National security agencies and other highly regulated sectors.
Speaker #2: Please access our website at www.bigbear.ai and click on the Investor Relations link to view and follow the charts. With that, I'd like to turn the call over to Kevin.
In plain terms assays, let's organization safely use the best AI model, then AI agents to get real work done with sensitive or classified data assays as cloud model agnostic integrates with both current frontier and emerging AI technologies and delivers those rapidly expanding capabilities direct.
Speaker #3: Good afternoon. It's good to be back speaking with our shareholders and analysts about our progress today. Three months ago, I told you BigBear was going on offense.
Sean Ricker: Please access our website at www.bigbear.ai and click on the Investor Relations link to view and follow the charts. With that, I'd like to turn the call over to Kevin. Good afternoon.
Speaker #3: Taking advantage of our positioning in the market and our increased capital, to grow organically and to strengthen our position through disciplined M&A. Since then, we've moved with purpose, assessing markets where we can lead, evaluating strategic opportunities, and engaging across our industry to identify the right targets.
Kevin McAleenan: It's good to be back speaking with our shareholders and analysts about our progress today. Three months ago I told you BigBear.ai was going on offense, taking advantage of our positioning in the market, and our increased capital to grow organically and to strengthen our position through disciplined M&A. Since then, we've moved with purpose, assessing markets where we can lead, evaluating strategic opportunities, and engaging across our industry to identify the right targets.
For use by Warfighters coders contracting professionals analysts and administrators at all levels of security and at the speed of model development through platform level Cyber security certification.
Speaker #3: We've been intentional in every step of the process, scouting the market, evaluating AI technology developments, and aligning around a clear thesis for value creation.
As stage already supports more than 16000 government teams across 27 agents, even hundreds of commercial companies and annual recurring revenue was on track to grow over six times from 2024 to 2025.
Speaker #3: That deliberate approach has led us to a significant step forward for the company, one intended to advance our vision, accelerate growth, and position BigBear.ai for leadership in our core national security market by capitalizing on the increasing adoption of generative AI for defense capabilities.
Kevin McAleenan: We've been intentional in every step of the process, scouting the market, evaluating AI technology developments, and aligning around a clear.
We will dig deeper into the investment rationale in a few moments, but this is a big development that we expect to accelerate our growth and further advance our position as a technology catalyst for both government and commercial customers.
Kevin McAleenan: Thesis for value creation.
Speaker #3: Today, I'm excited to announce that BigBear has signed a definitive agreement to acquire AskSage, a cutting-edge and fast-growing generative AI platform for secure distribution of AI models and agentic capabilities, built specifically for defense and national security agencies and other highly regulated sectors.
Kevin McAleenan: That deliberate approach has led us to.
Kevin McAleenan: A significant step forward for the company.
On our agenda for the call I will share why this acquisition is such an important step for big Barry I, how it fits squarely within our M&A framework and why it strengthens our leadership in this rapidly expanding market segment.
Kevin McAleenan: One intended to advance our vision, accelerate.
Kevin McAleenan: Growth and position BigBear.ai for leadership in our core national security market.
Kevin McAleenan: By capitalizing on the increasing adoption of.
Kevin McAleenan: Generative AI for defense capabilities.
Then I'll turn to our broader market outlook and business performance and ask Shaun to walk through our financial results and I'll close with a look at where we go from here.
Kevin McAleenan: Today I'm excited to announce that BigBear.ai.
Kevin McAleenan: BigBear.ai has signed a definitive agreement to acquire Ask Sage, a cutting-edge and fast-growing generative AI platform for secure distribution of AI models and agentic capabilities built specifically for defense and national security agencies, and other highly regulated sectors.
Speaker #3: In plain terms, AskSage lets organizations safely use the best AI models and AI agents to get real work done, with sensitive or classified data.
But I'd like to start off by congratulating Shawn for his official appointment to the role of Chief Financial Officer as of October 14th having healthy interim positions since June.
Speaker #3: AskSage is cloud and model agnostic, integrates with both current frontier and emerging AI technologies, and delivers those rapidly expanding capabilities directly for use by warfighters, coders, contracting professionals, analysts, and administrators, at all levels of security, and at the speed of model development, through platform-level cybersecurity certification.
Sean has done an excellent job in his expanded role a big very high he has been a true strategic partner for me, while delivering rigor transparency and discipline in our financial operations.
Kevin McAleenan: In plain terms, Ask Sage lets organizations safely.
Kevin McAleenan: Use the best AI models and AI agents to get real work done with sensitive or classified data.
Maintains the respect of our board and our team and I couldnt be more excited to work with them to execute this next phase of Big Bears evolution.
Kevin McAleenan: Sage is cloud and model agnostic, integrates.
Kevin McAleenan: With both current frontier and emerging AI technologies, and delivers those rapidly expanding capabilities directly for use by war fighters, coders.
Speaker #3: AskSage already supports more than 16,000 government teams across 27 agencies and hundreds of commercial companies, and annual recurring revenue is on track to grow over six times from 2024 to 2025.
To frame today's discussion I will explain our corporate development strategy, because M&A plays a central role in our plans to accelerate <unk> growth.
Kevin McAleenan: Contracting professionals, analysts, and administrators at.
Kevin McAleenan: All levels of security and at the.
Over the past several months, we built and refined discipline thesis driven approach to M&A, one where every investment is structured to advance our mission strengthen our differentiation and build long term value.
Kevin McAleenan: Speed of model development through platform-level cybersecurity certification.
Speaker #3: We will dig deeper into the investment rationale in a few moments, but this is a big development that we expect to accelerate our growth and further advance our position as a technology catalyst for both government and commercial customers.
Kevin McAleenan: Sage already supports more than 16,000 government teams across 27 agencies, and hundreds of commercial companies, and annual recurring revenue is on track to grow over 6x from 2024 to 2025.
Our acquisition framework focuses on three areas, where we believe that big Barry I is best positioned to combine our mission expertise with cutting edge technology and achieve greater impact for our performance and investors.
Speaker #3: On our agenda for the call, I will share why this acquisition is such an important step for BigBear.ai, how it fits squarely within our M&A framework, and why it strengthens our leadership in this rapidly expanding market segment.
Kevin McAleenan: We will dig deeper into the investment.
Kevin McAleenan: Rationale in a few moments, but this is a big development that we expect to accelerate our growth and further advance.
First disruptive AI emission solutions for National Security.
Kevin McAleenan: Our position as a technology catalyst for.
Speaker #3: Then, I'll turn to our broader market outlook and business performance and ask Sean to walk through our financial results. And I'll close with a look at where we go from here.
Unlocking the power of AI for the Defense mission is essential to Americas continued leadership in global security and to maintaining our edge and strategic competition with potential adversaries.
Kevin McAleenan: Both government and commercial customers. On our agenda for the call, I will share why this acquisition is such an important step for BigBear.ai, how it fits squarely within our M&A framework, and why it strengthens our leadership in this rapidly expanding market segment. I will turn to our broader market outlook and business performance, and ask Sean to walk through our financial results. I'll close with a look at where we go from here. I'd like to start off by congratulating Sean for his official appointment to the role of Chief Financial Officer as of 14 October 2023.
Speaker #3: But I'd like to start off by congratulating Sean for his official appointment to the role of Chief Financial Officer as of October 14th. Having held the interim position since June, Sean has done an excellent job in his expanded role at BigBear.ai.
We're evaluating high growth companies that have built secure scalable mission tailored AI solutions with products solving real problems for operators not solely developing enabling technologies.
The opportunity here is significant.
Speaker #3: He's been a true strategic partner for me, while delivering rigor, transparency, and discipline in our financial operations. He maintains a respect of our board and our team, and I couldn't be more excited to work with him to execute this next phase of BigBear's evolution.
AI adoption across defense intelligence and Homeland security is still in the early stages in.
And the companies that can deliver tangible outcomes are well positioned for outsized growth.
Kevin McAleenan: Having held the interim position since June.
Second smart secure travel and trade.
Kevin McAleenan: Sean has done an excellent job in his expanded role at BigBear.ai. He's been a true strategic partner for me while delivering rigor, transparency, and discipline in our financial operations. He maintains the respect of our board and our team, and I couldn't be more excited to work with him to execute this next phase of BigBear.ai's evolution. To frame today's discussion, I will explain our corporate development strategy because M&A plays a central role in our plans to accelerate BigBear.ai's growth. Over the past several months, we've built and refined a disciplined, thesis-driven approach to M&A, one where every investment is structured to advance our mission, strengthen our differentiation, and build long-term value.
Speaker #3: To frame today's discussion, I will explain our corporate development strategy because M&A plays a central role in our plans to accelerate BigBear.ai's growth. Over the past several months, we've built and refined a disciplined, thesis-driven approach to M&A.
While big <unk> mission is grounded in National Security that mission continues to evolve as a global dynamic shift in the secure and transparent movement of people and goods becomes increasingly essential to maintaining economic advantage and safeguarding the prosperity of the United States and our allies.
Speaker #3: One where every investment is structured to advance our mission, strengthen our differentiation, and build long-term value. Our acquisition framework focuses on three areas where we believe that BigBear.ai is best positioned to combine our mission expertise with cutting-edge technology and achieve greater impact for our performance and investors.
Accordingly, the second core area for our potential investment is on technologies that enhanced security and efficiency in travel and trade, particularly computer vision capabilities like biometrics threat detection and monitoring.
With our deep expertise and proven success of our digital identity portfolio. We believe we are well positioned to lead in an attractive market with growing investment and attention that is still fragmented and primed for disruption.
Speaker #3: First, disruptive AI mission solutions for national security. Unlocking the power of AI for the defense mission is essential to America's continued leadership and global security, and to maintaining our edge in strategic competition with potential adversaries.
Kevin McAleenan: Our acquisition framework focuses on three areas where we believe that BigBear.ai is best positioned to combine our mission expertise with cutting-edge technology and achieve.
Third platform level AI technologies.
Our mission expertise is key to what sense big Barry I, apart, but to translate that expertise in the real world impact we must operate on platforms built for the world's most demanding use cases emissions.
Kevin McAleenan: Greater impact for our performance and investors. First, disruptive AI Mission Solutions for National.
Speaker #3: We're evaluating high-growth companies that have built secure, scalable mission-tailored AI solutions with products solving real problems for operators, not solely developing enabling technologies. The opportunity here is significant.
Kevin McAleenan: Security unlocking the power of AI for the defense mission is essential to America's continued leadership in global security and to maintaining our edge in strategic competition with potential adversaries. We're evaluating high growth companies that have built secure, scalable, mission-tailored AI solutions with products solving real problems for operators.
Missions, we serve and security travel and trade don't operate under typical timelines are tolerances. As a result, we're also targeting companies developing foundational AI tooling orchestration and data infrastructure to enable us to build and deliver the world's most advanced solution that speed and ahead of accelerating innovation and competition.
Speaker #3: AI adoption across defense, intelligence, and homeland security is still in the early stages. And the companies that can deliver tangible outcomes are well-positioned for outsized growth.
Speaker #3: Second, smart secure travel and trade. While BigBear.ai's mission is grounded in national security, that mission continues to evolve as global dynamics shift, and the secure and transparent movement of people and goods becomes increasingly essential to maintaining economic advantage, and safeguarding the prosperity of the United States and our allies.
Kevin McAleenan: Not solely developing enabling technologies.
Our national security operators must have immediate access to the cutting edge commercial models and technology being advanced globally to ensure that turns in readiness in United States and its allies must maintain their advantage in AI innovation.
Kevin McAleenan: The opportunity here is significant. AI adoption across defense, intelligence, and homeland.
Kevin McAleenan: Security is still in the early stages.
Kevin McAleenan: The companies that can deliver tangible outcomes are well positioned for outsized growth. Second, smart, secure travel and trade. While BigBear.ai's mission is grounded in national security, that mission continues to evolve as global dynamics shift, and the secure and transparent movement of people and goods becomes increasingly essential to maintaining economic advantage.
We intend to help make sure they do.
As the market accelerates toward generative Jensen can real time AI. The same platform capabilities will position us not just to keep pace with our competition, but to lead driving sustained growth and margin expansion.
Speaker #3: Accordingly, a second core area for our potential investment is on technologies that enhance security and efficiency in travel and trade, particularly computer vision capabilities like biometrics, threat detection, and monitoring.
Our M&A framework is designed so that the decisions, we make sharpen our competitive edge deepen our mission impact and position us for scalable and durable growth.
Speaker #3: With our deep expertise and proven success through our digital identity portfolio, we believe we are well-positioned to lead in an attractive market with growing investment and attention that is still fragmented and primed for disruption.
Kevin McAleenan: Safeguarding the prosperity of the United.
Kevin McAleenan: States and our allies.
Kevin McAleenan: Accordingly, a second core area for our.
Kevin McAleenan: Potential investment is on technology that enhances security and efficiency in travel and trade.
The acquisition of assay is a clear example of this framework in action.
Kevin McAleenan: Particularly computer vision capabilities like biometrics, threat detection, and monitoring.
Speaker #3: Third, platform-level AI technologies. Our mission expertise is key to what sets BigBear.ai apart. But the translate that expertise into real-world impact, we must operate on platforms built for the world's most demanding use cases.
With assay, we have found a critical platform level AI technology purpose built proven in the most secure and demanding mission environment and positioned to accelerate everything were building a big very high.
Kevin McAleenan: With our deep expertise and proven success through our digital identity portfolio, we believe we are well positioned to lead in an attractive market with growing investment and attention that is still fragmented and primed for disruption. Third platform-level AI technologies, our mission expertise is key to what sets BigBear.ai apart.
Assays are impressive.
It is a secure model agnostic Gen AI platform built specifically for government and other highly regulated industries.
Speaker #3: The missions we serve, in security, travel, and trade, don't operate under typical timelines or tolerances. As a result, we are also targeting companies developing foundational AI tooling, orchestration, and data infrastructure to enable us to build and deliver the world's most advanced solution at speed, and ahead of accelerating innovation and competition.
These environments agencies, often face challenges leveraging opening available commercial AI models due to data sensitivity compliance mandates and classified operations. This constraint slow the adoption of AI and limit submission speed.
Kevin McAleenan: To translate that expertise into real.
Kevin McAleenan: World impact, we must operate on platforms built for the world's most demanding use cases. The missions we serve in security, travel, and trade don't operate under typical timelines or tolerances. As a result, we are also targeting companies developing foundational AI tooling, orchestration, and data infrastructure to enable us to build and deliver the world's most advanced solutions at speed and ahead of accelerating innovation and competition.
Speaker #3: Our national security operators must have immediate access to the cutting-edge commercial models and technologies being advanced globally. To ensure deterrence and readiness, the United States and its allies must maintain their advantage in AI innovation.
Assayed remove that barrier.
By enabling agencies to deploy and operate AI models anywhere from the tactical edge to classified clouds within secure accredited environments. So partners can innovate safely quickly and at scale and it's already available in the Microsoft and AWS marketplaces.
Speaker #3: We intend to help make sure they do. As the market accelerates toward generative agentic and real-time AI, those same platform capabilities will position us not just to keep pace with our competition, but to lead, driving sustained growth and margin expansion.
Kevin McAleenan: Our national security operators must have immediate.
Kevin McAleenan: Access to the cutting edge commercial models and technologies being advanced globally. To ensure deterrence and readiness, the United States and its allies must maintain their advantage in AI innovation.
As stage stands out in this area. It is currently one of the only model agnostic Jenny I platforms, holding fed ramp high accreditation with over 30 frontier models deployed across beauty and national security customers. It orchestrates the leading open source and government approved models pulled in enterprise and mission data under strict governance.
Speaker #3: Our M&A framework is designed so that the decisions we make sharpen our competitive edge, deepen our mission impact, and position us for scalable and durable growth.
Kevin McAleenan: We intend to help make sure they do.
Kevin McAleenan: As the market accelerates toward generative, agentic, and real time AI, those same platform capabilities will position us not just to keep pace with our competition, but to lead, driving sustained growth and margin expansion.
Speaker #3: The acquisition of AskSage is a clear example of this framework in action. With AskSage, we have found a critical platform-level AI technology, purpose-built, proven in the most secure and demanding mission environments, and positioned to accelerate everything we're building at BigBear.ai.
It makes it easier to standup production ready AI agents for real high value use cases like acquisition cyber security coding compliance intelligence and operational analysis and ultimately mission automation.
Kevin McAleenan: Our M&A framework is designed.
Kevin McAleenan: That the decisions we make sharpen our competitive edge, deepen our mission impact, and position us for scalable and durable growth. The acquisition of Ask Sage is a clear example of this framework in action. With Ask Sage, we have found a critical platform-level AI technology, purpose-built, proven in the most secure and demanding mission environments, and positioned to accelerate everything we're building at BigBear.ai. Ask Sage is impressive. It is a secure, model-agnostic gen AI platform built specifically for government and other highly regulated industries.
Speaker #3: AskSage is impressive. It is a secure, model-agnostic GenAI platform built specifically for government and other highly regulated industries. In these environments, agencies often face challenges leveraging openly available commercial AI models due to data sensitivity, compliance mandates, and classified operations.
One of the primary elements that makes it so valuable to us as the installed base and accreditation posture, we're acquiring assets Rd supports more than 100000 users on 16000 government teams and hundreds of commercial companies, which means we're not only buying an idea we're buying a turnkey platform. That's in production today at scale in the.
Speaker #3: This constraint slows the adoption of AI and limits mission speed. AskSage removes that barrier. By enabling agencies to deploy and operate AI models anywhere—from the tactical edge to classified clouds—within secure, accredited environments, the partners can innovate safely, quickly, and at scale.
<unk> that matter most.
And because the platform is designed to be agnostic to all ends and deployment models. We can meet each customer whether they're security classification and data residency requirements are without locking them or us into a single model or cloud.
Kevin McAleenan: In these environments, agencies often face challenges.
Kevin McAleenan: Leveraging openly available commercial AI models due to data sensitivity, compliance mandates, and classified operations. This constraint slows the adoption of AI and limits mission speed.
Further with out of the box support for 150, plus open source and commercial air models customers can select a specific model best food to their mission and even build multi model agents that combine the strengths of different systems to achieve superior outcomes.
Speaker #3: And it's already available in the Microsoft and AWS marketplaces. AskSage stands out in this area. It is currently one of the only model-agnostic GenAI platforms holding FedRAMP High accreditation, with over 30 frontier models deployed across DOD and national security customers.
Kevin McAleenan: Sage removes that barrier by enabling agencies.
Kevin McAleenan: To deploy and operate AI models anywhere from the tactical edge to classified clouds within secure, accredited environments so partners can innovate safely, quickly, and at scale. It's already available in the Microsoft and AWS marketplaces. Ask Sage stands out in this area. It is currently one of the only model-agnostic genAI platforms holding FedRAMP high accreditation. With over 30 frontier models deployed across DoD and national security customers, it orchestrates the leading open-source and government-approved models, pulls in enterprise and mission data under strict governance. It makes it easy to stand up production-ready AI agents for real, high-value use cases like acquisition, cybersecurity, and coding.
<unk> also provides a framework to build and ship vertical mission specific agents quickly with ice age we are positioning ourselves to deliver secure AI agents that actually act on mission data and drive outcomes at the highest classification levels and do it repeatedly across defense security agencies and defense industrial base from a business stands.
Speaker #3: It orchestrates the leading open-source and government-approved models, pulls in enterprise and mission data under strict governance, and makes it easy to stand up production-ready AI agents for real, high-value use cases, like acquisition, cybersecurity, coding, compliance, intelligence and operational analysis, and ultimately mission automation.
This capability not only accelerated delivery and differentiation, but also creates meaningful operating leverage and sustained margin uplift as we scale.
Speaker #3: One of the primary elements that makes this so valuable to us is the installed base and accreditation posture we're acquiring. AskSage already supports more than 100,000 users on 16,000 government teams and hundreds of commercial companies.
In addition to its capabilities the market backdrop for assay is compelling.
According to U S government Accountability office, the number of federal Jenny I use cases has grown over eight times since 2023 assays is already capturing the way. It has grown six fold over the last year and is tracking towards $25 million and they are in 2025.
Kevin McAleenan: Compliance, intelligence, and operational analysis, and ultimately mission automation.
Speaker #3: Which means we're not only buying an idea, we're buying a turnkey platform that's in production today. At scale, in the environments that matter most.
Kevin McAleenan: One of the primary elements that makes this so valuable to us is the installed base and accreditation posture we're acquiring.
Speaker #3: And because the platform was designed to be agnostic to LLMs and deployment models, we can meet each customer where their security, classification, and data residency requirements are, without locking them or us into a single model or cloud.
Kevin McAleenan: Sage already supports more than 100,000 users.
This growth is powered by real deployments, including the U S Space Force Defense Health Agency office of the Secretary of Defense Chief Digital AI Office 11 combatant commands now there in the U S Army's enterprise LLM workspace, which all run on assays today.
Kevin McAleenan: On 16,000 government teams and hundreds of commercial companies, which means we're not only buying an idea, we're buying a turnkey platform that's in production today at scale in the environments that matter most.
Speaker #3: Further, with out-of-the-box support for 150-plus open-source and commercial AI models, customers can select a specific model best suited to their mission, and even build multi-model agents that combine the strengths of different systems to achieve superior outcomes.
Kevin McAleenan: Because the platform was designed to.
Kevin McAleenan: being agnostic to LLMs and deployment models, we can meet each customer where their security classification and data residency requirements are, without locking them or us into a single model or cloud. Further, with out-of-the-box support for 150-plus open source and commercial AI models, customers can select the specific model best suited to their mission and even build multi-model agents that combine the strengths of different systems to achieve superior outcomes. Ask Sage also provides a framework to build and ship vertical, mission-specific agents quickly.
This rapid momentum is a clear sign of first mover advantage in the speed of which assays has achieved a high level security posture and the delivery of tangible value.
Speaker #3: AskSage also provides a framework to build and ship vertical, mission-specific agents quickly, with AskSage we are positioning ourselves to deliver secure AI agents that actually act on mission data and drive outcomes at the highest classification levels and do it repeatedly, across defense, security agencies, and the defense industrial base.
Finally assays is led by its founder and exceptional talent and Nicholas alone. Nick is one of the most respected voices and secure mission great AI, having served as the former Chief software officer for both the U S Air Force and space Force and founded multiple companies over the past 25 years.
Speaker #3: From a business standpoint, this capability not only accelerates delivery and differentiation, but also creates meaningful operating leverage and sustained margin uplift as we scale.
And then he can build technology, the Pentagon actually uses rapidly and iteratively to support critical missions.
Kevin McAleenan: With Ask Sage, we are positioning ourselves to.
Kevin McAleenan: Deliver secure AI agents that actually act on mission data and drive outcomes at the highest classification levels, and do it repeatedly across defense security agencies and the defense industrial base. From a business standpoint, this capability not only accelerates delivery and differentiation, but also creates meaningful operating leverage and sustained margin uplift as we scale.
I'm thrilled to announce that Nick will be joining the bigger at the closing of the transaction to lead our technology team as Chief Technology Officer, where he will focus on enhancing our broader portfolio and increasing the efficiency and velocity of our product development and innovation, while empowering us forward as an AI first company across all of our functions.
Speaker #3: In addition to its capabilities, the market backdrop for AskSage is compelling. According to US Government Accountability Office, the number of federal GenAI use cases has grown over eight times since 2023.
Speaker #3: AskSage has already captured the wave. It has grown AAR six-fold over the last year, and is tracking toward 25 million dollars in ARR in 2025.
Kevin McAleenan: In addition to its capabilities, the market.
Kevin McAleenan: Backdrop for assays is compelling.
By integrating assayed with big barrier, we are creating and offering the market has been asking for a secure integrated AI platform that connects software data and mission services in one place.
Kevin McAleenan: According to US Government Accountability Office, the.
Speaker #3: This growth is powered by real deployments, including the US Space Force, Defense Health Agency, Office of the Secretary of Defense, Chief Digital AI Office, 11 combatant commands, NAVAIR, and the US Army's Enterprise LLM Workspace, which all run on AskSage today.
Kevin McAleenan: Number of federal gen AI use cases has grown over eight times since 2023. Ask Sage is already capturing the wave. It has grown ARR sixfold over the last year and is tracking toward $25 million in ARR in 2025.
I'd like to touch on a few important synergies.
First we plan to cross sell the assay platform into Big Barry is existing federal and commercial accounts opening up a new group of D. H S intelligence community and travel mobility customers that need secure a high speed processing of threat detection.
Kevin McAleenan: This growth is powered by real deployments.
Speaker #3: This rapid momentum is a clear sign of first-mover advantage, and the speed at which AskSage has achieved a high-level security posture in the delivery of tangible value.
Kevin McAleenan: Including the US Space Force, Defense Health Agency, Office of the Secretary of Defense.
Kevin McAleenan: Chief Digital AI Office, 11 Combatant Commands, NAVAIR, and the US Army's Enterprise LLM.
Second we plan to introduce big very high products into the large and growing assays user base. These customers are already operating in a secure environment. We can now offer them more mission as more data sources and more automation.
Speaker #3: Finally, AskSage is led by its founder, an exceptional talent in Nicholas Shalon. Nick is one of the most respected voices in secure mission-grade AI, having served as the former Chief Software Officer for both the U.S. Air Force and Space Force, and founded multiple companies over the past 25 years.
Kevin McAleenan: Workspace, which all run on Ask Sage today. This rapid momentum is a clear sign of first mover advantage, and the speed at which Ask Sage has achieved a high level security posture and the delivery of tangible value.
Third we plan to wrap our integration of emission services around the applications and agents deployed on a stage, giving customers not only in the AI capability, but also the deployment tuning and change management support to ensure that they maximize the value potential of the offering.
Speaker #3: He has proven that he can build technology the Pentagon actually uses, rapidly and iteratively, to support critical missions. I am thrilled to announce that Nick will be joining BigBear at the closing of the transaction to lead our technology teams as Chief Technology Officer.
Kevin McAleenan: Finally, Ask Sage is led by its founder.
Kevin McAleenan: An exceptional talent in Nicholas Chaillan. Nick is one of the most respected voices in secure mission grade AI. Having served as the former Chief Software Officer for both the US Air Force and Space Force, and founded multiple companies over the past 25 years, he has proven that he can build technology the Pentagon actually uses rapidly and iteratively to support critical missions.
Fourth assays application marketplace gives us a faster route to market for future offerings, whether build organically through partnerships or by acquisition, it's become a distribution channel for innovation.
Kevin McAleenan: I am thrilled to announce that Nick.
In sum this acquisition represents a watershed moment for <unk> and our shareholders.
Kevin McAleenan: Will be joining BigBear.ai at the closing of the transaction to lead our technology teams as Chief Technology Officer, where he will focus on enhancing our broader portfolio, increasing the efficiency and velocity of our product development and innovation, while powering us forward as an AI first.
Wiring not just technology, but the foundation of an ecosystem that positioned us to support the AI Revolution in government and regulated industry.
With unprecedented government AI investments expected in 2026, and 2027 assays as existing accreditation that operational platform will give us a key competitive advantage, while others are still building and working through certification, we will be deploying in scaling.
Kevin McAleenan: Company across all of our functions. By integrating assays with BigBear.ai.
Kevin McAleenan: We are creating an offering the market has been asking for, a secure, integrated AI platform that connects software, data, and mission services in one place.
We intend to move quickly and integrate as age after closing and we're looking forward to executing on this shared vision together.
Kevin McAleenan: I'd like to touch on a few important synergies. First, we plan to cross sell the.
Yeah.
Now turning to the broader market environment over the past several months, we strengthened our momentum across core markets and national security and travel and trade, while expanding into international arenas.
Kevin McAleenan: Ask Sage's platform into BigBear.ai's existing federal and commercial accounts, opening up a new group of DHS, Intelligence Community, and Travel Mobility customers that need secure AI to speed processing and threat detection.
We said, we plan to diversify our pipeline deepen partnerships and demonstrate execution at scale and we've delivered our capture campaigns under the one big beautiful Bill are well underway broadening our pipeline across DHS and defense and positioning <unk> to compete successfully for the key investments in security that are generational funding source will be.
Kevin McAleenan: Second, we plan to introduce BigBear.ai.
Kevin McAleenan: AI products into the large and growing Ask Sage user base. These customers are already operating in a secure AI environment. We can now offer them more mission apps, more data sources, and more automation. Third, we plan to wrap our integration and mission services around the applications and agents deployed on Ask Sage, giving customers not only the AI capability but also the deployment, tuning, and change management support to ensure that they maximize the value potential of the offering. Fourth, Ask Sage Application Marketplace gives us a faster route to market for future offerings. Whether built organically, through partnerships, or via acquisition, it's become a distribution channel for innovation. In sum, this acquisition represents a watershed moment for BigBear.ai and our shareholders. We are acquiring not just technology, but the foundation of an ecosystem that positions us to support the AI revolution in government and regulated industries.
Hey.
Across our growth apparatus, we've demonstrated real measurable progress our <unk> biometric platform continues to expand to additional airports that is now live in Chicago, O'hare, Seattle Tacoma International Airport in Nashville, and supportive CVP of enhanced passenger processing program.
These deployments are improving security accelerating processing time, and enhancing traveler experience at some of the country's busiest airports of entry.
In the National Security space, we advance our core platforms integrating conductor OS and vein to deliver real time situational awareness and decision support for multi domain operations.
New partnerships with <unk> and desktop AI extend our capability to the tactical edge processing data and disconnected environments, and strengthening joined force logistics and readiness.
Kevin McAleenan: With unprecedented government AI investments expected in.
Kevin McAleenan: 2026 and 2027, Ask Sage's existing accreditations and operational platform will give us a key competitive advantage. While others are still building and working through certification, we will be deploying and scaling.
Our participation and Unitas 2025, alongside the U S Navy and SMS further demonstrated the scalability of our AI solutions and complex real world emissions.
Kevin McAleenan: We intend to move quickly and integrate.
Kevin McAleenan: Sage after closing, and we're looking forward to executing on this shared vision together. Now turning to the broader market environment, over the past several months we strengthened our momentum across core markets in national security, travel, and trade, while expanding into international arenas.
Internationally, we're proving the reach and reliability of our technology in the U K, our PGM threat detection software completed successful trials at Edinburgh Airport validating performance under operational conditions in the Middle East we continue to build momentum in the UAE, where we serve as title sponsor of the global AI show in Abu Dhabi, a premier venue for it.
Kevin McAleenan: We said we plan to diversify our pipeline, deepen partnerships, and demonstrate execution.
Kevin McAleenan: Scale, and we've delivered our capture campaigns under the One Big Beautiful Bill are well underway, broadening our pipeline across DHS and defense, and positioning BigBear.ai to compete successfully for the key investments in security that this generational funding source will bring.
Dancing trusted mission, driven AI with global partners and allies.
We also entered the sports and entertainment Arena through our landmark partnership with the Washington commanders.
<unk> naming rights for the Big very high performance center by stepping onto the National stage alongside one of the NFL is most storied franchises, we're extending our visibility beyond the defense and government sectors connecting our brands or performance precision in innovation, the very attributes that define our technology.
Kevin McAleenan: Across our growth apparatus, we've demonstrated real, measurable progress. Our Veriscan biometric platform continues to expand.
Kevin McAleenan: To additional airports and is now live at Chicago O'Hare, Seattle Tacoma International Airport, and Nashville in support of CBP's enhanced passenger processing program. These deployments are improving security, accelerating processing times, and enhancing traveler experience at some of the country's busiest airports of entry. In the national security space, we advance our core platforms integrating Conductor OS and vein to deliver real-time situational awareness.
All that said like all federal contractors, we are actively navigating the government shutdown importantly.
Importantly over 80% of our government contract work has been deemed accepted and mission essential including our work for the Department of war in the Department of Homeland Security.
Good to have the opportunity to continue to support our government customers during the last and appropriations that said parts of several contracts mostly for the intelligence community have been temporarily paused and have resulted in some revenue and personnel disruption.
Kevin McAleenan: Decision support for multi domain operations. New partnerships with T2nd and DEFCON AI extend our capability to the tactical edge, processing data in disconnected environments and strengthening.
Look forward to a resolution of the shutdown and getting our team back to full strength and support of our mission customers.
Kevin McAleenan: Joint Force logistics and readiness. Our participation in Unitis 2025 alongside the US Navy and SMX further demonstrated the.
Throughout the quarter, we've executed with rigor staying disciplined in capital deployment, while expanding our customer base diversifying our pipeline and strengthening our international presence with.
Kevin McAleenan: Scalability of our AI solutions in complex, real-world missions. Internationally, we're proving the reach and reliability of our technology.
That I will turn it over to Shaun to walk through our financial performance in more detail.
Thanks, Kevin this quarter, we have continued to make sequential improvements to our balance sheet in terms of our liquidity and net debt position.
Kevin McAleenan: In the UK, our Pangean threat detection software completed successful trials at Edinburgh Airport.
Kevin McAleenan: Validating performance under operational conditions.
At the end of the third quarter, we had total cash and investments of $715 million, which includes $457 million of cash and $258 million of held to maturity securities.
Kevin McAleenan: In the Middle East, we continue to build momentum in the UAE where we serve as title sponsor of the Global AI Show in Abu Dhabi, a premier venue for advancing trusted, mission-driven AI with global partners and allies. We also entered the sports and entertainment arena through our landmark partnership with the Washington Commanders, securing naming rights for the BigBear.ai Performance Center by stepping onto the national stage alongside one of the NFL's most storied franchises.
During the third quarter through our at the market facilities. We raised gross proceeds of approximately $337 million in exchange for the sale of 65 million shares of our common stock, which equates to an average gross selling price of $5 18 per share.
Kevin McAleenan: We're extending our visibility beyond the defense.
Our ability to access the capital markets at relatively low cost and at attractive prices will allow us to continue to execute on the M&A strategy that Kevin outlined and to make other investments to accelerate growth in the future.
Kevin McAleenan: Government sectors, connecting our brand to performance, precision, and innovation, the very attributes that define our technology. All that said, like all federal contractors, we are actively navigating the government shutdown. Importantly, over 80% of our government contract work has been deemed accepted and mission essential, including our work for the Department of War and the Department of Homeland Security. We are proud to have the opportunity to continue to support our government customers during the lapse in appropriations. That said, parts of several contracts, mostly for the intelligence community, have been temporarily paused and have resulted in some revenue and personnel disruption. We look forward to a resolution of the shutdown and getting our team back to full strength in support of our mission customers. Throughout the quarter, we've executed with rigor, staying disciplined in capital deployment.
Now, let's turn to our operating results for the quarter.
Third quarter revenue was $33 $1 million, a decrease of $8 $4 million year over year, which was primarily driven by lower volume on the army programs.
Gross margins decreased year over year gross margin for the third quarter of 2025 was 22, 4% versus 25, 9% for the comparable period, primarily due to certain higher margin programs in the third quarter of 2024 that were not repeated in the third quarter of 2025.
With that, I'll turn it over to Sean to walk through our financial performance in more detail.
SG&A expenses increased from $17 $5 million in the third quarter of 2024 to $25 $3 million in the third quarter of 2025 the.
Kevin McAleenan: While expanding our customer base, diversifying our.
Thanks, Kevin. This quarter, we have continued to make sequential improvements to our balance sheet in terms of our liquidity and net debt position.
Kevin McAleenan: Pipeline and strengthening our international presence. With that, I'll turn it over to Sean to walk through our financial performance.
The increase in SG&A was primarily related to increased SG&A labor and fringe costs of $4 $3 million to support growth and other initiatives.
Sean Ricker: In more detail, thanks, Kevin. This quarter we have continued to make sequential improvements to our balance sheet in terms of our liquidity and net debt position. At the end of the third quarter, we have total cash and investments of $715 million, which includes $457 million of cash and $258 million of held to maturity securities. During the third quarter, through our at the market facilities, we raised gross proceeds of approximately $337 million in exchange for the sale of 65 million shares of our common stock, which equates to an average gross selling price of $5.18 per share. Our ability to access the capital markets at relatively low cost and at attractive prices will allow us to continue to execute on the M&A strategy that Kevin outlined, and to make other investments to accelerate growth in the future.
At the end of the third quarter, we have total cash and investments of $715 million, which includes $457 million of cash and $258 million of held-to-maturity securities.
Increased nonrecurring strategic initiatives of $2 million and an increase in marketing and other growth investments of $1 4 million.
Our net income for the third quarter was $2 $5 million driven by a decrease in the fair value of derivatives of about $26 million, primarily associated with the quarterly remeasurement of the convertible features of our convertible notes.
During the third quarter Sue are at the market facilities, we raise gross proceeds of approximately 337 million in exchange for the sale of 65 million shares of our common stock, which equates to an average gross selling price of $5.18 per share.
Which was partially offset by the increased SG&A spending previously mentioned.
Our ability to access the capital markets at relatively low cost and at attractive prices will allow us to continue to execute on the m&a, strategy that Kevin outlined and to make other Investments to accelerate growth in the future.
Adjusted EBITDA for the third quarter was negative $9 $4 million versus positive $900000 in the comparable period.
Now, let's turn to our operating results. For the quarter,
The decrease in adjusted EBITDA was driven by the increased SG&A spending as well as the lower gross profit due to contract mix.
Third quarter Revenue was 33.1 million, a decrease of 8.4 million year-over-year, which was primarily driven by lower volume on Army programs.
Sean Ricker: Now let's turn to our operating results for the quarter. Third quarter revenue was $33.1 million, a decrease of $8.4 million year over year, which was primarily driven by lower volume on Army programs. Gross margins decreased year over year. Gross margin for the third quarter of 2025 was 22.4% versus 25.9% for the comparable period, primarily due to certain higher margin programs in the third quarter of 2024 that were not repeated in the third quarter of 2025. SGA expenses increased from $17.5 million in the third quarter of 2024 to $25.3 million in the third quarter of 2025. The increase in SGA was primarily related to increased SGA labor and fringe costs of $4.3 million to support growth, and other initiatives, increased non-recurring strategic initiatives of $2 million, and an increase in marketing and other growth investments of $1.4 million.
While there are still risks related to the ultimate resolution and timing of the ongoing government shut down for the full year 2025, we continue to project revenue between $125 million and $140 million.
gross margins, decreased year-over-year, gross margin for the third quarter of 2025 was 22.4% versus 25.9% for the comparable period of primarily, due to certain higher margin programs in the third quarter of 2024 that were not repeated in the third quarter of 2025
The anticipated acquisition of assays is expected to close late in the fourth quarter of 2025 or early in the first quarter of 2026, and therefore, we do not expect the financial result of the acquisition to have a material impact on our consolidated 2025 financial results.
Sgna expenses increased from 17.5 million in the third quarter of 2024 to 25.3 million in the third quarter of 2025.
I'll now turn it back to Kevin to discuss our priorities and to give a few closing remarks.
The increase in sgna was primarily related to increased sgna labor, and Fringe costs of 4.3 million to support growth in other initiatives.
Thanks, Sean presented our financial position remains strong with cash and investments totaling $715 million.
Increased non-recurring strategic initiatives of 2 million dollars and an increase in marketing and other growth Investments of 1.4 million.
Foundation has allowed us to move quickly and strategically investing in organic growth targeted partnerships and the infrastructure necessary to scale.
And as we scale another major focus area of talent.
We are continuing to develop a world class team that includes substantially expanding the size of our growth team, bringing on experienced sales leaders, who can expand our reach deepen customer relationships and translate our technical differentiation into market share gains and long term revenue growth.
Our net income for the third quarter was $2.5 million, driven by a decrease in the fair value of derivatives of about $26 million, primarily associated with the quarterly remeasurement of the convertible features of our convertible notes.
Sean Ricker: Our net income for the third quarter was $2.5 million, driven by a decrease in the fair value of derivatives of about $26 million, primarily associated with the quarterly remeasurement of the convertible features of our convertible notes, which was partially offset by the increased SGA spending previously mentioned. Adjusted EBITDA for the third quarter was negative $9.4 million versus positive $900,000 in the comparable period. The decrease in adjusted EBITDA was driven by the increased SG and A spending, as well as the lower gross profit due to contract mix. While there are still risks related to the ultimate resolution and timing of the ongoing government shutdown for the full year 2025, we continue to project revenue between $125 million and $140 million.
which was partially offset by the increase sgna spending previously mentioned
Adjusted EVA for the third quarter was -$9.4 million versus positive $900,000 for the comparable period.
We look to our acquisition of assays to support accelerating our growth into 2026 and beyond driving our ability to deliver plateau level AI technology built for the world's most demanding missions by combining big very eyes mission expertise with assays as world class Gen AI capabilities will strengthen our capacity to build and deploy secure scalable and.
Track mix.
while there are still risks related to the ultimate resolution and timing of the ongoing government shutdown, for the full year 2025, we continue to project revenue between 125 million and 140 million
Agile solutions at the speed that our industry innovation demands.
This acquisition will advance our vision of providing U S operators with immediate access to cutting edge AI, reinforcing deterrence readiness and leadership across the national security travel and trade spaces.
The anticipated acquisition of asajj, is expected to close late in the fourth quarter of 2025 or early in the first quarter of 2026. And therefore, we do not expect the financial results of the acquisition to have material impact on our Consolidated, 2025 Financial results.
Sean Ricker: The anticipated acquisition of Ask Sage is expected to close late in the fourth quarter of 2025 or early in the first quarter of 2026, and therefore we do not expect the financial results of the acquisition to have material impact on our consolidated 2025 financial results. I'll now turn it back to Kevin to discuss our priorities and to give a few closing remarks.
Before we close I want to remind our shareholders that your voice matters participating in the upcoming special meeting of stockholders is one of the most important ways you can help shape <unk> future to this end we are asking our shareholders to approve at our December 1st Special meeting an increase in our authorized capital to support that.
I'll now turn it back to Kevin to discuss our priorities and to give a few closing remarks.
Drove initiatives looking.
Thanks. As Sean presented, our financial position remains strong, with cash and investments totaling $715 million. This foundation has allowed us to move quickly and strategically, investing in organic growth, targeted partnerships, and the infrastructure necessary to scale.
Kevin McAleenan: Thanks. As Sean presented, our financial position remains strong. With cash and investments totaling $715 million, this foundation has allowed us to move quickly and strategically, investing in organic growth.
Looking ahead the foundations, we built this year set the stage for accelerated growth in 2026 and beyond we are building a stronger more resilient big very high one position to lead in national security and travel and trade modernization worldwide.
And as we scale, another major focus area is talent.
Kevin McAleenan: Targeted partnerships and the infrastructure necessary to scale. As we scale, another major focus area is talent. We are continuing to develop a world.
Thank you as always through our big Barry I team and to our shareholders for continued support.
We are continuing to develop a world-class team that includes substantially expanding the size of our growth team, bringing on experienced sales leaders, who can expand our reach, deepen customer relationships and translate our technical differentiation into market, share gains, and long-term Revenue growth.
Forward to speaking with all of you next quarter to update you on our progress.
Kevin McAleenan: Class team that includes substantially expanding the.
Kevin McAleenan: Size of our growth team, bringing on.
Kevin McAleenan: Experienced sales leaders who can expand our reach, deepen customer relationships, and translate our technical differentiation into market share gains and long-term revenue growth. We look to our acquisition of Ask Sage to support accelerating our growth into 2026 and beyond, driving our ability to deliver platform-level AI technologies built for the world's most demanding missions.
Thank you Sam.
Ladies and gentlemen that concludes today's conference. Thank you for joining US you may now disconnect your lines.
We look to our acquisition of assays to support accelerating our growth into 2026 and Beyond driving our ability to deliver platform level. AI Technologies built for the world's most demanding missions by combining big buys. Mission expertise with assay is world class Genai capabilities, will strengthen our capacity to build and deploy secure scalable and agile Solutions. At the speed that our industry's Innovation demands
Kevin McAleenan: By combining BigBear.ai's mission expertise.
Kevin McAleenan: With Ask Sage's world class gen AI capabilities.
Kevin McAleenan: We'll strengthen our capacity to build and.
Kevin McAleenan: Deploy secure, scalable, and agile solutions at the speed that our industry's innovation demands. This acquisition will advance our vision of providing US operators with immediate access to cutting-edge AI, reinforcing deterrence, readiness, and leadership across national security.
This acquisition will advance. Our vision of providing us operators with immediate access to Cutting Edge, AI reinforcing deterrence Readiness and Leadership across the National Security, travel and trade spaces.
Kevin McAleenan: Travel and trade spaces.
Kevin McAleenan: Before we close, I want to remind our shareholders that your voice matters.
Kevin McAleenan: Participating in the upcoming special meeting of.
Before we close, I want to remind our shareholders that your voice matters participating in the upcoming special meeting of stockholders, is 1 of the most important ways you can help shape big berry eyes future to this end. We are asking our shareholders to approve at our December 1st. Special meeting in increase in our authorized Capital to support these growth initiatives.
Kevin McAleenan: it is one of the most important ways you can help shape BigBear.ai's future. To this end, we are asking our shareholders to approve at our 1 December special meeting an increase in our authorized capital to support these growth initiatives. Looking ahead, the foundations we built this year set the stage for accelerated growth in 2026 and beyond. We are building a stronger, more resilient BigBear.ai, positioned to lead in national security, and travel and trade modernization worldwide. Thank you, as always, to our BigBear.ai team and to our shareholders for continued support. I look forward to speaking with all of you next quarter to update you on our progress.
Looking ahead. The foundations we built this year set, the stage for Accelerated growth in 2026 and Beyond. We are building a stronger more resilient, Big Bay. I 1 position to lead in National Security and travel and trade modernization worldwide.
thank you as always to our big berry I team and to our shareholders for continued support I look forward to speaking with all of you next quarter to update you on our progress,
Thank you, sir. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.
Operator: Thank you, sir. Ladies and gentlemen, that concludes today's conference. Thank you for joining us. You may now disconnect your lines.