BigBear.ai (NYSE: BBAI) raised the lower end of its full-year 2026 revenue guidance after third-quarter revenue increased 31% year over year, supported by continued organic growth and new government contract activity. The company now expects annual revenue of $150 million to $165 million, compared with its previous range of $135 million to $165 million.
The midpoint of the revised outlook represents projected growth of about 23% from 2025 and is 5% above the midpoint of the prior range. Management said the outlook reflects three consecutive quarters of organic revenue growth in 2026. Revenue rose 18.6% sequentially in the third quarter after increasing 6.7% in the second quarter.
Revenue and margins improve, impairment drives GAAP loss
Third-quarter revenue reached $43.6 million, up from $33.1 million a year earlier. Gross margin expanded to 31.2% from 22.4%, an improvement of 878 basis points.
BigBear.ai reported a GAAP net loss of $91.9 million, compared with net income of $2.5 million in the prior-year period. The latest result included a $76.7 million non-cash goodwill impairment charge, which accounted for approximately $0.16 of the quarter’s $0.19 diluted net loss per share. The company reported a diluted net loss of $0.03 per share in the third quarter of 2025.
Adjusted EBITDA, a non-GAAP measure, remained negative at $9.1 million but improved by $0.3 million from a $9.4 million loss a year earlier. BigBear.ai cautioned that its non-GAAP measures exclude significant items required under GAAP and may not be comparable with similarly named measures used by other companies.
The company ended the quarter with $399 million in cash and investments, reported total debt of $16.7 million and net cash of $382.3 million. Total backlog stood at $330.1 million.
Government awards and generative AI adoption
BigBear.ai said it had won and announced more than 25 new contracts since the second quarter, representing over $225 million in contract value. The awards included Department of Homeland Security recompetes, work with new mission customers and classified national-security contracts. Contract value does not necessarily translate directly into recognized revenue, and the company noted separately that backlog may be affected by funding changes, contract terminations or unexercised option periods.
Among the quarter’s highlighted awards were two five-year subcontracts supporting U.S. Customs and Border Protection. A recompete task order through SAIC covers integrated AI and analytics used in systems that assess risks related to travelers and cargo. A separate contract through Unissant extends BigBear.ai’s support for CBP targeting and risk-assessment operations.
The company also added the Federal Bureau of Investigation, U.S. Coast Guard, NASA, Department of Energy and Department of Veterans Affairs as customers for its secure generative AI platform, which it acquired as Ask Sage in December 2025. The platform provides access to generative AI models and agentic tools, secure data processing and capabilities for building AI agents.
Outside national security, Children’s Minnesota renewed its use of BigBear.ai’s FutureFlow Rx platform for two years. The product uses digital-twin technology and predictive analytics to help hospitals anticipate patient flows and manage capacity and resources.
Management prioritizes growth and acquisitions
Chief Executive Kevin McAleenan identified top-line growth and the pursuit of acquisition targets as management’s two main priorities for the remainder of 2026. The company is focusing potential M&A activity on technologies that could be deployed quickly or expand its market reach and scale.
BigBear.ai positions its business primarily in enterprise AI tools, platforms and mission-specific applications rather than physical infrastructure, computing capacity or foundation models. Its target markets include national security, trade and travel, and other operations requiring secure deployment and specialized domain knowledge.
Management pointed to defense modernization, changing global trade flows, increasing international travel and growing security threats as potential demand drivers heading into 2027. However, the presentation did not provide formal 2027 financial guidance.
The outlook remains subject to risks including changes in government spending and contracting policies, federal budget constraints or shutdowns, contract cancellations, procurement delays and the possibility that backlog will not convert into revenue. BigBear.ai also cited integration risks related to acquired businesses, uncertainty around customer adoption, competitive pressure, tariffs and its ability to secure task orders under government contract vehicles.
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