U.S. Stock Earnings Reports & Market News
BigBear.ai Holdings, Inc. (BBAI) Fiscal Year 2025 Q2 Financial Analysis Report
Key Metrics (Historical Comparisons)
| Period | Revenue (USD) | Gross Profit (USD) | Operating Income (USD) | Net Income (USD) | EPS (Diluted) |
|---|---|---|---|---|---|
| Q2 FY2025 | 32,472,000 | 8,113,000 | -22,418,600 | -228,619,000 | -0.71 |
| Q2 FY2024 | 39,783,000 | 11,063,000 | -17,866,000 | -11,737,000 | -0.0477 |
| Q2 FY2023 | 38,459,000 | 8,963,000 | -13,338,000 | -16,895,000 | -0.12 |
| Q2 FY2022 | 37,613,000 | 9,590,000 | -55,110,000 | -56,844,000 | -0.45 |
| Q2 FY2021 | 36,311,000 | 9,163,000 | -3,109,000 | -3,175,000 | -0.0302 |
Executive Summary
BigBear.ai Holdings, Inc. (BBAI) reported its fiscal second quarter of 2025 with revenues of approximately $32.47 million, representing a decline compared to previous periods. The company continues to face significant operational challenges, culminating in a substantial net loss of $228.62 million, or $0.71 per diluted share. Despite efforts in R&D, overall profitability remains elusive, and the company exhibits high operating expenses, primarily driven by administrative and selling costs. The trend indicates ongoing financial struggles, although revenue levels have stabilized somewhat after a dip in prior years.
Management Discussion and Analysis (MD&A)
During Q2 FY2025, BigBear.ai experienced a reduction in revenue, which is partly attributable to increased market competition and operational headwinds. The company’s heavy investment in research and development reflects a strategic focus on future product offerings, albeit at the expense of current profitability. The substantial operating expenses, especially selling, general, and administrative costs, continue to pressure margins. Non-operating income sources provided some relief, but overall, the company remains heavily unprofitable. Management is focusing on streamlining operations and exploring new markets to improve future cash flows and profitability.
Income Statement Analysis
Revenue & Gross Profit
Revenue declined from $39.78 million in Q2 FY2024 to $32.47 million in Q2 FY2025, marking approximately an 18.4% decrease YoY. Gross profit also decreased from $11.06 million to $8.11 million, a 26.7% decline, reflecting margin compression amid lower sales and higher costs.
Operating & Net Income
The operating loss widened significantly from $17.87 million in FY2024 to $22.42 million in FY2025, indicating persistent operational inefficiencies. Net income plunged further into a massive loss of $228.62 million, driven largely by extraordinary non-operating expenses and impairments, which overshadow core operations.
EPS & YoY/QoQ Trends
EPS deteriorated from -$0.0477 in FY2024 to -$0.71 in FY2025, highlighting worsening profitability. The large decline suggests exceptional charges or impairments rather than ongoing operational decline alone. The QoQ comparison shows a consistent pattern of losses, with no immediate signs of bottoming out.
Balance Sheet Analysis
Data specifics on balance sheet figures are not provided in the current dataset. However, the significant net loss and ongoing operational challenges suggest potential liquidity pressures. Investors should monitor cash reserves, receivables, and debt levels for signs of financial stress, especially considering the large net loss and negative cash flows likely associated with ongoing operational cash burn.
Cash Flow Analysis
While direct cash flow data is not available here, the net losses and high expenses imply negative operating cash flows. The companyu2019s focus on R&D and potential capital expenditures could further strain liquidity. Itu2019s crucial to review the company’s cash flow statements for detailed insights into investing and financing activities, including any debt issuance or asset sales.
Ratios & DuPont Analysis
Given the net losses, key profitability ratios such as net margin and ROE are negative, indicating poor efficiency and return generation. Asset turnover ratios likely remain low. The asset multiplier and leverage ratios should be examined further once balance sheet data is available to assess leverage levels and financial stability.
Risk Factors
- Regulatory risks associated with government contracting and defense regulations.
- Market competition from larger, more established technology firms.
- Operational risks stemming from high R&D costs and execution challenges.
- Financial risks due to sustained losses, liquidity concerns, and high leverage.
- Macro-economic factors such as government spending cuts and geopolitical tensions affecting demand.
Notes & Additional Commentary
Significant one-time charges, impairments, or restructuring expenses may be contributing to the extraordinary net losses observed. The persistent negative profits suggest the company remains in a growth or turnaround phase, with substantial investments necessary to achieve future profitability. Deviations from prior profitability levels indicate operational hurdles that need strategic addressing.
Investment Implications
In the short term, BBAI presents high risk due to ongoing losses and liquidity concerns, making it unsuitable for risk-averse investors. However, if managementu2019s strategic initiatives succeed, there could be future upside potential. Long-term investors should monitor progress on operational efficiency, revenue growth, and debt management, recognizing the current high volatility and uncertainty.