10-Q · May 5, 2026
BigBear.ai reported Q1 2026 revenue of $34.4 million, slightly exceeding estimates of $33.6 million, but achieved an EPS of -$0.12, missing the expected -$0.08. The company observed a year-over-year revenue decline of…
Earnings analysis · 10-Q
BBAI earnings analysis
Filed October 28, 2026 · Our reading of the company's report
The latest report
BigBear.ai delivered strong top-line and gross-margin improvement in Q3, with revenue of $43.581 million up 31.5% year over year and gross margin expanding to 31.2%. However, the $76.737 million goodwill impairment…
Read full summary
BigBear.ai delivered strong top-line and gross-margin improvement in Q3, with revenue of $43.581 million up 31.5% year over year and gross margin expanding to 31.2%. However, the $76.737 million goodwill impairment drove a $99.959 million operating loss, while nine-month operating cash flow and free cash flow were negative $49.758 million and $50.637 million, respectively. Liquidity remains substantial at $398.975 million, but it declined from $461.536 million and the company faces a $17.668 million convertible-note maturity in December 2026. Overall, improving revenue, margins and backlog are offset by forecast impairment, cash burn and government-contract funding risks.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.03
What stood out
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Revenue accelerated year over year
Third-quarter revenue rose 31.5% year over year to $43.581 million from $33.143 million, primarily reflecting the inclusion of Ask Sage. Revenue also increased from approximately $37 million in Q2 2026 based on the quarterly history.
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Gross margin expanded materially
Gross profit increased to $13.594 million from $7.429 million, lifting gross margin to 31.2% from 22.4% year over year and approximately 32.8% in Q2 2026. Management attributed the improvement to higher-margin Ask Sage revenue.
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Interest burden declined
Interest expense declined 93.3% year over year to $0.307 million from $4.604 million as the average 2029 Convertible Notes balance fell following conversions. The remaining 2026 Convertible Notes had a net principal balance of $16.685 million at September 30, 2026.
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Backlog grew substantially
Backlog increased to $330.125 million from $248.060 million at December 31, 2025, including funded backlog of $76.490 million and unfunded backlog of $163.661 million.
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Capex intensity remained low
Capital spending remained limited at $0.879 million for the first nine months, versus $4.114 million in the prior-year period, or roughly 0.8% of nine-month revenue of $114.765 million.
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Revenue and EPS beat estimates
The reported diluted EPS loss of $0.03 exceeded the estimated loss of $0.05, while revenue of $43.581 million exceeded the $38.9424 million consensus estimate by approximately 11.9%.
What to watch
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Goodwill impairment signals forecast pressure
The company recorded a $76.737 million non-cash goodwill impairment in the third quarter, driven by a change in long-term forecasts. This charge contributed to an operating loss of $99.959 million and an operating margin of approximately negative 229.4%.
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Cash burn and working-capital pressure
Operating cash flow was negative $49.758 million for the first nine months, compared with negative $20.117 million in the prior-year period. Management cited an unfavorable $17.7 million working-capital impact, including an $18.4 million increase in accounts receivable.
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Liquidity declined amid continued cash burn
Available liquidity declined to $398.975 million from $461.536 million at December 31, 2025, consisting of $77.112 million of cash and $321.863 million of available-for-sale investments. Free cash flow was negative $50.637 million for the first nine months.
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Near-term debt maturity
The $17.668 million principal balance of the 2026 Convertible Notes matures on December 15, 2026; the net carrying balance was $16.685 million at September 30, 2026. Although the company stated it was compliant with all note covenants, refinancing or repayment remains a near-term liquidity consideration.
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Backlog conversion and funding risk
Of the $330.125 million total backlog, $163.661 million was unfunded. The filing states that government contracts may be terminated for convenience and that backlog may not convert into revenue if funding is not appropriated or options are not exercised.
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Federal procurement uncertainty
Management identified uncertainty around federal budget priorities, procurement reforms and reviews of major defense programs, including potential cancellation. This is material because the company reported $114.765 million of nine-month revenue and stated that most historical revenue is derived from federal government contracts.
Management's outlook
The 10-Q does not provide new quantitative revenue or EPS guidance. Management states that existing cash and operating cash flows are expected to cover anticipated uses for the next 12 months; the previously reported FY2026 revenue outlook of $150 million-$165 million was disclosed in the October 27, 2026 8-K rather than this filing.
Earlier filings 4
10-K · March 2, 2026
BigBear.ai positions itself as a mission-focused AI vendor serving national security, travel and trade markets and completed strategic bolt‑on deals (Ask Sage on December 31, 2025 and CargoSeer assets in January 2026).…
10-Q · November 10, 2025
BigBear.ai reported Q3 2025 revenue of $33.143M and a GAAP net income of $2.521M (basic EPS $0.01; diluted EPS $(0.03)), driven by non‑operating items and financing activity. The quarter shows a materially stronger…
10-Q · August 11, 2025
BigBear.ai reported Q2 (three months ended June 30, 2025) revenue of $32,472,000, down from $39,783,000 a year earlier, with gross margin falling to 25.0% and GAAP diluted loss per share of $(0.71). The quarter included…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.