COLUMBIA, Md.–(BUSINESS WIRE)–BigBear.ai, a leading provider of artificial intelligence (“AI”), machine learning, cloud-based big data analytics, and cyber engineering solutions, today announced financial results for the six months ended June 30, 2021.
“BigBear.ai’s steady pace of contract awards and expanded customer engagements drove our strong year-to-date revenue and backlog growth. This is a testament to our successful track record for growing customer relationships by seamlessly implementing flexible solutions that enable customers to make critical decisions faster, more accurately and with better outcomes,” said Dr. Reggie Brothers, BigBear.ai Chief Executive Officer. “Our investments for commercial penetration and public company readiness have proceeded according to plan. I am also very pleased to report that we recently signed two major contract awards that add more than $150 million to our backlog as well as a new transformational commercial agreement that will generate annual recurring revenue of $6 million over four years. Though timing of these key contract awards differed slightly from our expectations due to COVID-related delays and pushed a portion of our revenue growth later in the year than anticipated, this revenue is now on board. This timing difference between our investments and revenue will largely be settled in the second half of 2021, when our adjusted EBITDA will reflect the true performance of the company.”
Dr. Brothers continued, “We are looking forward to completing our business combination with GigCapital4 later this year and for BigBear.ai to emerge as a public company. This will further accelerate our growth as we invest to develop new technology and expand into commercial markets, where we see substantial opportunities for our AI-powered solutions, which enable companies to make better decisions based on the massive amount of data they are rapidly accumulating.”
Second Quarter Financial Highlights
- Year-to-date revenue of approximately $72 million
- Year-to-date gross margin of 27%, incrementally lower than expected due to higher, non-recurring subcontractor costs to capture immediate growth opportunities
- Year-to-date segment adjusted gross margin of 48% for the Analytics segment and 22% for the Cyber & Engineering segment
- Year-to-date net loss of $5.6 million reflecting a timing difference between the company’s planned investments through the period and delay in revenue/contract awards as a result of COVID
- Year-to-date non-GAAP adjusted EBITDA* of approximately $3.3 million
Recent Customer Wins and Awards
- Since June 30, added more than $150 million of new contract awards, which, combined with BigBear.ai’s backlog as of June 30, 2021, totals approximately $485 million. Key awards include the following:
- Entered into a transformational multi-year commercial partnership with Virgin Orbit for the real-time deployment of AI-powered software for mobile assets in the field; the development of applications that can identify objects, analyze ground material, map land and monitor climate in space; and the use of innovative products that fuse data from multiple intelligence data
- Awarded a five-year, single-award contract, valued at $141 million, to provide business analytics to a key customer in the intelligence community
- Received a Notice of Intent for a two-year contract award from the Air Force Research Laboratory in support of Project AURORA, in which BigBear.ai will deploy its Observe, Orient and Dominate products to accelerate and enhance the joint planning decision-making cycle
- Executed a MOU with UAV Factory to develop AI and machine learning capabilities for unmanned systems and components used in the commercial and defense markets
Financial Outlook
BigBear.ai is revising its previously announced projections for fiscal year 2021 due to COVID-related delays in the timing of select government contract awards. Three contracts, with a combined value of approximately $150 million, were awarded as much as six months later than initially projected, which moved the entire expected period of performance for those contracts correspondingly. The company reiterates its previously announced financial projections for fiscal year 2022, due to the visibility in already awarded contracts.
The company is projecting:
- Revenue between $88 million and $113 million in the second half of 2021, bringing full-year projected revenue between $160 million and $185 million
- Adjusted EBITDA* between $9.2 million and $10.2 million in the second half of 2021, bringing full-year projected adjusted EBITDA* between $12.5 million and $13.5 million after accelerated sales and marketing and R&D costs to drive growth strategy
Business Combination with GigCapital4
As previously announced, BigBear.ai and GigCapital4, Inc. (“GigCapital4”; Nasdaq: GIGGU, GIG, GIGGW) a private-to-public equity (PPE)™ entity also known as special purpose acquisition company (“SPAC”) have entered into a definitive merger agreement that will result in BigBear.ai becoming a publicly traded company. The transaction is expected to close in the fourth quarter of 2021, subject to, among other things, the approval by GigCapital4 stockholders, regulatory approvals, and the satisfaction or waiver of other customary closing conditions.
Summary of Results for the Six Months Ended June 30, 2021
|
|
Six Months |
|||
|
Revenues |
$ |
71,881 |
|
|
|
Cost of revenues |
|
52,438 |
|
|
|
Gross margin |
|
19,443 |
|
|
|
Operating expenses: |
|
|||
|
Selling, general and administrative |
|
20,519 |
|
|
|
Research and development |
|
2,795 |
|
|
|
Transaction expenses |
|
– |
|
|
|
Operating loss |
|
(3,871 |
) |
|
|
Interest expense |
|
3,709 |
|
|
|
Other income, net |
|
(1 |
) |
|
|
Loss before taxes |
|
(7,579 |
) |
|
|
Income tax benefit |
|
(1,967 |
) |
|
|
Net loss |
$ |
(5,612 |
) |
|
1 Amounts presented are unaudited
EBITDA and Adjusted EBITDA for the Six Months Ended June 30, 2021
|
|
Six Months |
|||
|
Net loss |
$ |
(5,612 |
) |
|
|
Interest expense |
|
3,709 |
|
|
|
Income tax benefit |
|
(1,967 |
) |
|
|
Depreciation and amortization |
|
3,673 |
|
|
|
EBITDA |
|
(197 |
) |
|
|
Adjustments: |
|
|||
|
Capital market advisory fees2 |
|
2,446 |
|
|
|
Management fees3 |
|
454 |
|
|
|
Non-recurring integration costs4 |
|
505 |
|
|
|
Equity-based compensation |
|
56 |
|
|
|
Adjusted EBITDA |
$ |
3,264 |
|
|
1 Amounts presented are unaudited.
2 The company incurred capital market and advisory fees related to advisors assisting with preparation for the Business Combination.
3 Management and other related consulting fees paid to AE Partners. These fees will no longer be accrued or paid subsequent to the Business Combination.
4 Internal integration costs which will cease upon close of the Business Combination.
About BigBear.ai
A leader in decision dominance for more than 20 years, BigBear.ai operationalizes artificial intelligence and machine learning at scale through its end-to-end data analytics platform. The company uses its proprietary AI/ML technology to support its customers’ decision-making processes and deliver practical solutions that work in complex, realistic and imperfect data environments. BigBear.ai’s composable AI-powered platform solutions work together as often as they stand alone: Observe (data ingestion and conflation), Orient (composable machine learning at scale), and Dominate (visual anticipatory intelligence and optimization).
BigBear.ai’s customers, which include the U.S. Intelligence Community, Department of Defense, the U.S. Federal Government, as well as customers in the commercial sector, rely on BigBear.ai’s high value software products and technology to analyze information, identify and manage risk, and support mission critical decision making. Headquartered in Columbia, Maryland, BigBear.ai has additional locations in Virginia, Massachusetts, Michigan, and California. For more information, please visit: http://bigbear.ai/ and follow BigBear.ai on Twitter: @BigBearai.
