- Revenue of $36.4 million for the quarter ended March 31,
2022
- Gross margin of 27% for the quarter ended March 31,
2022
- Analytics segment adjusted gross margin of 47% for the quarter
ended March 31, 2022
- Closed on the acquisition of ProModel Corporation on April 7,
2022
- Fully settled the Forward Share Purchase Agreement obligations
by repurchasing approximately 10 million shares of common stock
during the first quarter
- Won 11 new contracts; ending total backlog of $459 million
- Reaffirmed 2022 financial outlook
BigBear.ai Holdings, Inc. (NYSE: BBAI) (“BigBear.ai” or
the “Company”), a leader in AI-powered analytics and cyber
engineering solutions, today announced financial results for the
first quarter of 2022.
“We continued to build momentum during the first quarter as we
transition from a stable and profitable services-led company into a
high growth, high margin technology-first company. We are making
strategic investments to attract talent and expand our portfolio,
including the addition of industry-leading modeling applications
with our ProModel acquisition, which complements our own AI-based
product innovation,” said BigBear.ai CEO Dr. Reggie Brothers. “With
clear evidence that AI is becoming a priority for organizations
across all sectors, we are capitalizing on this large and growing
addressable market by making AI-powered decision support technology
accessible and scalable for a wider range of companies.”
Dr. Brothers continued, “Our first quarter commercial revenue
surpassed total commercial revenue for the prior year, and we
expect growth to accelerate throughout the remainder of the year.
Additionally, the ProModel acquisition significantly advances our
commercial market strategy, adding hundreds of new, global
customers – including several Fortune 500 customers – across key
vertical industries such as manufacturing, healthcare, and
shipbuilding.”
“The Consolidated Appropriations Act of 2022, signed in March
with approximately $33 billion of increased spending at the
Department of Defense, acknowledges the need to accelerate the
deployment of AI for national intelligence and defense. We expect
the new bill, coupled with a gradual abatement of government
contracting delays, to drive increased Federal activity throughout
the remainder of the year and into 2023, opening the door for
additional opportunities and further strengthening our backlog,”
said Dr. Brothers.
Financial Highlights
- Revenue of $36.4 million, compared to $35.6 million for the
first quarter of 2021
- Analytics revenue increased $2.0 million, or 11%, as compared
to the same period in 2021, primarily driven by growing sales to
commercial customers
- Gross margin of 27%, compared to 29% for the first quarter of
2021
- Non-GAAP adjusted gross margin of 47% for the Analytics segment
compared to 49% for the first quarter of 2021. The decrease was
primarily due to investments on a lower margin prototype contract
that represents our largest contract pursuit in 2022
- Non-GAAP adjusted gross margin of 22% for the Cyber &
Engineering segment, compared to 23% for the first quarter of
2021
- Net loss of $18.8 million, compared to $2.4 million for the
first quarter of 2021, primarily driven by increased stock-based
compensation expense, commercial start-up costs, non-recurring
integration costs, and transaction costs related to the acquisition
of ProModel Corporation
- Non-GAAP adjusted EBITDA* of $(2.9) million, compared to $2.7
million for the first quarter of 2021, primarily driven by
increased investment in research and development as well as
increased selling, general and administrative costs, largely driven
by public company requirements
- Ending backlog of $459 million
"I’m particularly pleased with our ability to manage our
long-term growth investments in the first quarter, despite
operating under a Continuing Resolution for most of the period,”
said BigBear.ai CFO Josh Kinley. “Our commercial go-to-market
strategy remains a top priority, but investors also want to know
companies can control costs during challenging times. Additionally,
our growing commercial analytics revenue helped expand gross margin
in the quarter. I’m happy to report we remain on track with our
2022 projections of roughly 30% revenue growth with continued gross
margin expansion. Overall, I’m pleased with our progress, which
underscores the strength of our underlying business.”
Dr. Brothers concluded, “We fully expect the BigBear.ai
transformation and growth story to continue throughout 2022.
Favorable shifts in the government contracting environment and the
rapid expansion into the commercial market via the ProModel
acquisition bode well for the company. Our first full year as a
publicly traded company is off to a strong start, and we look
forward to continued progress and growth throughout the year.”
Financial Outlook
The following information and other sections of this release
contain forward-looking statements, which are based on the
Company’s current expectations. Actual results may differ
materially from those projected. It is the Company’s practice not
to incorporate adjustments into its financial outlook for proposed
acquisitions, divestitures, changes in law, or new accounting
standards until such items have been consummated, enacted, or
adopted. For additional factors that may impact the Company’s
actual results, refer to the “Forward-Looking Statements” section
in this release.
For the year-ended December 31, 2022, the Company continues to
project:
- Revenue between $175 million and $205 million, including
approximately $20 million of commercial revenue
The Company notes that 2022 projections reflect known impacts
from the COVID-19 pandemic based on the Company’s understanding at
the time of this news release and its experience to date. Internal
analysis of federal solicitations in the Company’s market showed
that the time between solicitation and contract award increased
from 290 days to more than 600 days between 2019 and 2021. COVID-19
led to delays in government contract awards in 2020 and 2021, and
the Company cannot predict how the pandemic will evolve or what
impact it will continue to have.
Although the Company does provide guidance for adjusted EBITDA*
(which is a non-GAAP financial measure), it is not able to forecast
the most directly comparable measure calculated and presented in
accordance with GAAP without unreasonable effort. Certain elements
of the composition of the GAAP amounts are not predictable, making
it impracticable for the Company to forecast. As a result, no GAAP
guidance or reconciliation of the Company’s adjusted EBITDA*
guidance is provided. For the same reasons, the Company is unable
to assess the probable significance of the unavailable information,
which could have a potentially significant impact on its future
GAAP financial results. The outlook is based on certain assumptions
that are subject to the risk factors discussed in the Company’s
filings with the Securities and Exchange Commission
(“SEC”).
Summary of Results for the
Quarters Ended
March 31, 2022 and March 31,
2021
(Unaudited)
Quarters Ended
$ thousands (expect per share amounts)
March 31,
2022
March 31,
2021
Revenues
$
36,390
$
35,570
Cost of revenues
26,523
25,290
Gross margin
9,867
10,280
Operating expenses:
Selling, general and
administrative
22,020
10,114
Research and development
2,874
928
Transaction expenses
1,399
—
Operating loss
(16,426
)
(762
)
Net decrease in fair value of
derivatives
(1,263
)
—
Interest expense
3,555
1,860
Other expense (income)
30
(1
)
Loss before taxes
(18,748
)
(2,621
)
Income tax expense
(benefit)
77
(184
)
Net loss
$
(18,825
)
$
(2,437
)
Basic and diluted net loss per
share
$
(0.14
)
$
(0.02
)
EBITDA* and Adjusted EBITDA*
for the Quarters Ended
March 31, 2022 and March 31,
2021
(Unaudited)
Quarters Ended
$ thousands
March 31,
2022
March 31,
2021
Net loss
$
(18,825
)
$
(2,437
)
Interest expense
3,555
1,860
Income tax expense (benefit)
77
(184
)
Depreciation and amortization
1,772
1,921
EBITDA
(13,421
)
1,160
Adjustments:
Equity-based compensation 1
3,858
25
Net decrease in fair value of
derivatives 2
(1,263
)
—
Capital market advisory fees
3
703
1,540
Non-recurring integration costs
4
2,375
—
Commercial start-up costs 5
3,427
—
Transaction expenses 6
1,399
—
Adjusted EBITDA
$
(2,922
)
$
2,725
1
Equity-based compensation includes
approximately $2.7 million related to legacy equity compensation
plans.
2
The decrease in fair value of derivatives
primarily relates to the changes in the fair value of certain
Forward Share Purchase Agreements (FPAs) that were entered into
prior to the closing of the Business Combination and were fully
settled during the first quarter of 2022.
3
The Company incurred capital market and
advisory fees related to advisors assisting with the Business
Combination.
4
Non-recurring internal integration costs
related to the Business Combination.
5
Commercial start-up costs includes certain
non-recurring expenses associated with tailoring the Company’s
software products for commercial customers and use cases.
6
Transaction expenses related to the
acquisition of ProModel Corporation, which closed on April 7,
2022.
Consolidated Balance Sheets as
of
March 31, 2022 and December
31, 2021
(Unaudited)
$ in thousands
March 31,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents
$
59,978
$
68,900
Restricted cash
—
101,021
Accounts receivable, less
allowance for doubtful accounts
26,624
28,605
Contract assets
2,934
628
Prepaid expenses and other
current assets
6,601
7,028
Total current assets
96,137
206,182
Non-current assets:
Property and equipment, net
1,335
1,078
Goodwill
91,636
91,636
Intangible assets, net
81,976
83,646
Other non-current assets
741
780
Total assets
$
271,825
$
383,322
Liabilities and equity
Current liabilities:
Accounts payable
$
6,625
$
5,475
Short-term debt, including
current portion of long-term debt
3,074
4,233
Accrued liabilities
17,042
10,735
Contract liabilities
2,792
4,207
Derivative liabilities
—
44,827
Other current liabilities
623
541
Total current liabilities
30,156
70,018
Non-current liabilities:
Long-term debt, net
190,853
190,364
Deferred tax liabilities
422
248
Other non-current
liabilities
343
324
Total liabilities
221,774
260,954
Stockholders’ equity:
Common stock
14
14
Additional paid-in capital
257,602
253,744
Treasury stock, at cost
9,952,803 shares at March 31, 2022 and — shares at December 31,
2021
(57,350
)
—
Accumulated deficit
(150,215
)
(131,390
)
Total stockholders’ equity
50,051
122,368
Total liabilities and stockholders’
equity
$
271,825
$
383,322
Consolidated Statements of
Cash Flows for the Quarters Ended
March 31, 2022 and March 31,
2021
(Unaudited)
Quarters Ended
$ in thousands
March 31,
2022
March 31,
2021
Cash flows from operating
activities:
Net loss
$
(18,825
)
$
(2,437
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation and amortization
expense
1,772
1,921
Amortization of debt issuance
costs
523
143
Equity-based compensation
expense
3,858
25
Provision for doubtful
accounts
—
—
Deferred income tax expense
(benefit)
174
(202
)
Net decrease in fair value of
derivatives
(1,263
)
—
Changes in assets and liabilities:
Decrease (increase) in accounts
receivable
1,981
(1,442
)
(Increase) decrease in contract
assets
(2,306
)
897
Decrease (increase) in prepaid
expenses and other assets
432
(653
)
Increase in accounts
payable
1,150
174
Increase in accrued
liabilities
6,307
2,316
(Decrease) increase in contract
liabilities
(1,415
)
130
Increase in other
liabilities
83
21
Net cash (used in) provided by
operating activities
(7,529
)
893
Cash flows from investing
activities:
Acquisition of businesses, net
of cash acquired
—
(224
)
Purchases of property and
equipment
(359
)
(170
)
Net cash used in investing
activities
(359
)
(394
)
Cash flows from financing
activities:
Repurchase of shares as a
result of forward share purchase agreements
(100,896
)
—
Repayment of short-term
borrowings
(1,159
)
—
Repayment of term loan
—
(275
)
Net cash used in financing
activities
(102,055
)
(275
)
Net (decrease) increase in cash and cash
equivalents and restricted cash
(109,943
)
224
Cash and cash equivalents and restricted
cash at the beginning of period
169,921
9,704
Cash and cash equivalents and
restricted cash at the end of the period
$
59,978
$
9,928
Forward-Looking
Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act, and Section 21E of
the Exchange Act. Forward-looking statements generally are
accompanied by words such as “believe,” “may,” “will,” “estimate,”
“continue,” “anticipate,” “intend,” “expect,” “should,” “would,”
“plan,” “predict,” “potential,” “seem,” “seek,” “future,”
“outlook,” and similar expressions that predict or indicate future
events or trends or that are not statements of historical matters.
These forward-looking statements include, but are not limited to,
statements regarding BigBear.ai’s industry, future events, and
other statements that are not historical facts. These statements
are based on various assumptions, whether or not identified herein,
and on the current expectations of BigBear.ai’s management and are
not predictions of actual performance. These forward-looking
statements are provided for illustrative purposes only and are not
intended to serve as, and must not be relied on by you or any other
investor as, a guarantee, an assurance, a prediction or a
definitive statement of fact or probability. Actual events and
circumstances are difficult or impossible to predict and will
differ from assumptions. Many actual events and circumstances are
beyond our control. These forward-looking statements are subject to
a number of risks and uncertainties, including changes in domestic
and foreign business, market, financial, political, and legal
conditions; risks related to the uncertainty of the projected
financial information (including on a segment reporting basis);
risks related to delays caused by factors outside of our control,
including changes in fiscal or contracting policies or decreases in
available government funding; changes in government programs or
applicable requirements; budgetary constraints, including automatic
reductions as a result of “sequestration” or similar measures and
constraints imposed by any lapses in appropriations for the federal
government or certain of its departments and agencies; influence
by, or competition from, third parties with respect to pending,
new, or existing contracts with government customers; potential
delays or changes in the government appropriations or procurement
processes, including as a result of events such as war, incidents
of terrorism, natural disasters, and public health concerns or
epidemics, such as the recent coronavirus outbreak; and increased
or unexpected costs or unanticipated delays caused by other factors
outside of our control, such as performance failures of our
subcontractors; risks related to the rollout of the business and
the timing of expected business milestones; the effects of
competition on our future business; our ability to issue equity or
equity-linked securities in the future, and those factors discussed
in the Company’s reports and other documents filed with the SEC,
including under the heading “Risk Factors.” If any of these risks
materialize or our assumptions prove incorrect, actual results
could differ materially from the results implied by these
forward-looking statements. There may be additional risks that
BigBear.ai presently does not know or that BigBear.ai currently
believes are immaterial which could also cause actual results to
differ from those contained in the forward-looking statements. In
addition, forward-looking statements reflect BigBear.ai’s
expectations, plans or forecasts of future events and views as of
the date of this release. BigBear.ai anticipates that subsequent
events and developments will cause BigBear.ai’s assessments to
change. However, while BigBear.ai may elect to update these
forward-looking statements at some point in the future, BigBear.ai
specifically disclaims any obligation to do so. Accordingly, undue
reliance should not be placed upon the forward-looking
statements.
Non-GAAP Financial
Measures
The financial information and data contained in this press
release is unaudited. Some of the financial information and data
contained in this press release, such as Adjusted EBITDA, have not
been prepared in accordance with United States generally accepted
accounting principles (“GAAP”). To supplement our unaudited
condensed consolidated financial statements, which are prepared and
presented in accordance with GAAP in our press release, we also
report certain non-GAAP financial measures. A “non-GAAP financial
measure” refers to a numerical measure of a company’s historical or
future financial performance, financial position, or cash flows
that excludes (or includes) amounts that are included in (or
excluded from) the most directly comparable measure calculated and
presented in accordance with GAAP in such company’s financial
statements.
The presentation of these financial measures is not intended to
be considered in isolation or as a substitute for, or superior to,
financial information prepared and presented in accordance with
GAAP and should not be considered measures of BigBear.ai’s
liquidity. Investors are cautioned that there are material
limitations associated with the use of non-GAAP financial measures
as an analytical tool. In particular, many of the adjustments to
our GAAP financial measures reflect the exclusion of certain items,
as defined in our non-GAAP definitions below, which are recurring
and will be reflected in our financial results for the foreseeable
future. In addition, these measures may be different from non-GAAP
financial measures used by other companies, even where similarly
titled, limiting their usefulness for comparison purposes and
therefore should not be used to compare BigBear.ai’s performance to
that of other companies. We endeavor to compensate for the
limitation of the non-GAAP financial measures presented by also
providing the most directly comparable GAAP measures and
descriptions of the reconciling items and adjustments to derive the
non-GAAP financial measures.
We believe these non-GAAP financial measures provide investors
and analysts with useful supplemental information about the
financial performance of our business, enable comparison of
financial results between periods where certain items may vary
independent of business performance, and allow for greater
transparency with respect to key measures used by management to
operate and analyze our business over different periods of time
Adjusted EBITDA is defined as of any date of calculation, the
consolidated pro forma earnings of the Company and its
subsidiaries, before finance income and finance cost (including
bank charges), tax, depreciation and amortization calculated from
the audited consolidated financial statements of such party and its
subsidiaries (prepared in accordance with GAAP), transaction fees
and other non-recurring costs. Similar excluded expenses may be
incurred in future periods when calculating these measures.
BigBear.ai believes these non-GAAP measures of financial results
provide useful information to management and investors regarding
certain financial and business trends relating to the Company’s
financial condition and results of operations. BigBear.ai believes
that the use of these non-GAAP financial measures provides an
additional tool for investors to use in evaluating projected
operating results and trends and in comparing BigBear.ai’s
financial measures with other similar companies, many of which
present similar non-GAAP financial measures to investors.
Non-GAAP financial performance measures are used to supplement
the financial information presented on a GAAP basis. This non-GAAP
financial measure should not be considered in isolation or as a
substitute for the relevant GAAP measures and should be read in
conjunction with information presented on a GAAP basis. Because not
all companies use identical calculations, our presentation of
non-GAAP measures may not be comparable to other similarly titled
measures of other companies.
Management does not consider these non-GAAP measures in
isolation or as an alternative to financial measures determined in
accordance with GAAP. The principal limitation of these non-GAAP
financial measures is that they exclude significant expenses and
income that are required by GAAP to be recorded in the Company’s
financial statements. In addition, they are subject to inherent
limitations as they reflect the exercise of judgment by management
about which expense and income items are excluded or included in
determining these non-GAAP financial measures.
Management uses EBITDA and adjusted EBITDA as a non-GAAP
performance measure which is defined in the accompanying tables and
is reconciled to earnings (loss) before taxes.
We present reconciliations of these non-GAAP financial measures
to the most directly comparable GAAP measure in the tables
above.
Conference Call / Webcast
Information
BigBear.ai will host its earnings results conference call and
audio webcast (listen-only mode) on Monday, May 9, 2022 at 5:00
p.m. ET. The earnings conference call can be accessed by calling
877-485-3107 (toll-free) or 201-689-8427 (toll). The listen-only
audio webcast of the call will be available on the BigBear.ai
Investor Relations website: https://ir.bigbear.ai. For those who
are unable to listen to the live event, a replay will be available
for two weeks following the event by dialing 877-660-6853
(toll-free) or 201-612-7415 (toll) and entering the access code
13729299. To access the webcast replay, visit
https://ir.bigbear.ai.
About BigBear.ai
BigBear.ai delivers AI-powered analytics and cyber engineering
solutions to support mission-critical operations and
decision-making in complex, real-world environments. BigBear.ai's
customers, which include the US Intelligence Community, as well as
customers in manufacturing, logistics, commercial space, and other
sectors, rely on BigBear.ai's solutions to see and shape their
world through reliable, predictive insights and goal-oriented
advice. Headquartered in Columbia, Maryland, BigBear.ai has
additional locations in Virginia, Massachusetts, Michigan, Alabama,
Pennsylvania, Utah and California. For more information, visit:
https://bigbear.ai and follow us on Twitter: @BigBearai.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220509006076/en/
BigBear.ai Tyler Sigmon 443-430-2622 Tyler.Sigmon@bigbear.ai
Reevemark Paul Caminiti/Delia Cannan/Pam Greene 212-433-4600
bigbear.ai@reevemark.com or investors@bigbear.ai
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