BigBear.ai Holdings, Inc. reported its financial results for the three and nine months ended September 30, 2024, highlighting significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the three months ended September 30, 2024, BigBear.ai generated revenues of $41.5 million, a 22.1% increase from $34.0 million in the same period of 2023. However, for the nine months ended September 30, 2024, revenues slightly decreased to $114.4 million from $114.6 million year-over-year. The company attributed the decline in nine-month revenues to decreased volume from the Air Force EPASS program, despite increased revenues from the Pangiam acquisition, which contributed $25.1 million post-acquisition.

The gross margin for the third quarter improved to $10.8 million, up from $8.4 million in the prior year, while the gross margin for the nine-month period increased to $28.8 million from $27.6 million. Selling, general, and administrative (SG&A) expenses rose to $17.5 million for the third quarter, compared to $15.5 million in 2023, driven by increased headcount and non-recurring strategic initiatives. Research and development (R&D) expenses surged to $3.8 million for the third quarter, a significant increase from a negative $0.3 million in the same period last year, reflecting higher project costs and headcount.

Despite the revenue growth, BigBear.ai reported a net loss of $12.2 million for the third quarter, a stark contrast to a net income of $4.0 million in the same quarter of 2023. For the nine months ended September 30, 2024, the net loss expanded to $149.1 million, compared to a loss of $39.1 million in the prior year. This increase was largely attributed to an $85 million goodwill impairment charge related to the Pangiam acquisition.

Strategically, BigBear.ai completed the acquisition of Pangiam Intermediate Holdings, LLC, on February 29, 2024, enhancing its capabilities in vision AI for global trade and digital identity. The acquisition involved issuing 61.8 million shares of common stock, valued at approximately $70 million. The company also engaged in warrant exercises, generating $20.6 million and $33.2 million from RDO and PIPE warrants, respectively.

As of September 30, 2024, BigBear.ai's total assets increased to $354.1 million from $199.9 million at the end of 2023, primarily due to the acquisition. The company reported cash and cash equivalents of $65.6 million, up from $32.6 million at the end of 2023, reflecting improved liquidity. However, total stockholders' equity remained positive at $98.4 million, a significant recovery from a negative equity position of $67.3 million at the end of 2023.