BigBear.ai's stock sinks as AI company barely shows revenue growth

By Emily Bary

BigBear.ai shares have seen explosive recent gains, but revenue for the latest quarter ticked up less than 1%

BigBear.ai Holdings Inc. is among a host of smaller companies that have seen surging stock performance as investors look for new ways to play the artificial-intelligence boom.

But the company's latest results didn't justify BigBear.ai's (BBAI) 88% year-to-date rally in the eyes of Wall Street. After finishing Thursday's regular session with a market capitalization just above $800 million, shares of BigBear.ai tumbled nearly 22% after hours as the company's revenue and loss figures underwhelmed.

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BigBear.ai, which uses AI to help customers in the national-security and supply-chain fields make decisions, barely grew its revenue in the fourth quarter. It posted $40.6 million on the top line, up 0.5% from a year before, while the FactSet analyst consensus had called for $42.8 million in revenue.

The company saw losses narrow in the December quarter, though not by as much as analysts were expecting. BigBear.ai logged a net loss of $21.3 million, or 14 cents a share, compared with a loss of $29.9 million, or 23 cents a share, in the year-prior quarter. The FactSet consensus was for a 5-cent loss per share.

The latest quarter's net-loss figure included $9.4 million in noncash expenses related to a change in the fair value of warrants issued last year, along with $6.1 million in expenses from stock-based compensation. The year-prior quarter's number included $18.3 million in noncash impairment charges and $2.6 million in restructuring charges.

BigBear.ai posted adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of $3.7 million, whereas it lost $2.5 million by that metric a year earlier. The FactSet consensus called for about half-a-million dollars in adjusted Ebitda.

For the year ahead, BigBear.ai modeled $195 million to $215 million in revenue, whereas analysts were expecting $173.7 million. BigBear.ai said that projection factors in expected results from Pangiam, a company it acquired in late February.

Read: Marvell's stock drops as AI momentum is outweighed by pressure elsewhere

"With the completion of the Pangiam acquisition and incremental cash proceeds of $54 [million] from warrants exercised in Q1 2024, we are well positioned for healthy growth in the year ahead," Chief Executive Mandy Long said in a release.

BigBear.ai joins other AI stock-market beneficiaries that have seen disappointing share movements in the wake of their earnings. SoundHound AI Inc. (SOUN) is one such company that saw its stock come under pressure after its results last week.

Meanwhile, shares of large chip companies Marvell Technology Inc. (MRVL) and Broadcom Inc. (AVGO) were declining in Thursday's extended session, after Marvell pointed to pressures in the non-AI parts of its business and Broadcom kept its full-year forecast intact.

-Emily Bary

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03-07-24 2050ET

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