BigBear.ai Q3 2026 Earnings: 31% Revenue Growth Supports Higher Guidance

BigBear.ai (NYSE: BBAI) reported Q3 2026 revenue of $43.6 million, up 31% from $33.1 million a year earlier, while diluted net loss per share was $0.19 versus $0.03 in Q3 2025. Gross margin expanded 878 basis points to 31.2%, but a $76.7 million non-cash goodwill impairment pushed the GAAP net loss to $91.9 million. Backlog increased to $330 million, and the company raised its full-year revenue outlook.

Core Financial Results

Revenue growth was substantially driven by the BigBear Generative AI Platform, acquired as Ask Sage in December 2025. The platform also supported higher gross profit and margin, although adjusted EBITDA remained negative and improved only modestly.

The goodwill impairment created most of the deterioration in GAAP earnings. Even after excluding that charge and other adjustments, the company recorded a $9.1 million adjusted EBITDA loss.

Figures are unaudited. Adjusted EBITDA is a non-GAAP measure.

Business and Contract Performance

Management characterized Q3 as the third consecutive quarter of organic growth since the end of 2025. However, the company also said the acquired Generative AI Platform substantially drove the reported year-over-year revenue increase, making the platform an important contributor to both growth and margin expansion.

BigBear.ai secured more than 25 contracts since Q2 2026 with over $225 million in total contract value. Customers included the FBI, U.S. Coast Guard and Department of Energy, along with classified awards. Backlog reached $330 million as of September 30, up 22% from Q2.

Contract value and backlog are not the same as recognized revenue. Timing, funding availability, option exercises and potential contract cancellations will determine how much of these awards ultimately appears in future results.

Margin Expansion Did Not Translate Into Profitability

Gross profit increased by $6.2 million, supported particularly by the Generative AI Platform. That improvement was not enough to offset higher operating costs before considering the impairment charge.

Selling, general and administrative expenses rose $6.1 million to $31.3 million. BigBear.ai attributed the increase primarily to $2.4 million of additional intangible-asset amortization related to Ask Sage, $2.5 million of higher labor spending from increased headcount and $1.4 million of additional sales and marketing expense. Research and development expense also increased by approximately $2.0 million to $5.4 million.

The $76.7 million goodwill impairment, which the company said was primarily driven by a change in its third-quarter forecast, then widened the operating loss to nearly $100 million. Because the impairment was non-cash, it explains much of the difference between the $91.9 million net loss and the substantially smaller operating cash outflow.

Cash Flow and Balance Sheet

Third-quarter operating cash use was $9.55 million, nearly unchanged from $9.59 million a year earlier. For the first nine months of 2026, however, operating cash use increased to $49.8 million from $20.1 million in the comparable 2025 period.

Working-capital movements were mixed during Q3. An increase in accounts receivable used $9.5 million of cash, while higher contract liabilities provided $11.1 million. Accounts receivable reached $40.5 million at quarter-end, up from $22.7 million at December 31, 2025.

BigBear.ai ended September with $77.1 million in cash and cash equivalents, plus $208.7 million of current and $113.2 million of non-current available-for-sale investments. The balance sheet showed $16.7 million of current debt and no non-current debt, compared with $90.5 million of non-current debt at the end of 2025.

FY 2026 Guidance

BigBear.ai raised its full-year revenue outlook after the quarter’s growth, margin expansion and contract wins. The new range has a midpoint of $157.5 million, which management said is 5% above the midpoint of its previous outlook.

Recent Insider Transactions

The supplied Yahoo Finance summary classifies 285,266 shares across eight transactions as purchases and 25,000 shares across two transactions as sales, resulting in net purchases of 260,266 shares. However, the detailed entries identify the eight non-sale transactions as stock award grants at $0 rather than open-market purchases, so the summary should not be interpreted as discretionary insider buying.

The two reported sales had a combined value of $104,875. These transactions alone do not establish insiders’ views about the company’s outlook.

Risks Investors Need to Watch

• Profitability remains unresolved: Adjusted EBITDA stayed negative at $9.1 million despite higher revenue and gross margin, showing that the current cost structure still exceeds gross profit.
• The impairment reflects lower forecasts: The $76.7 million goodwill charge was tied to a change in the third-quarter forecast, indicating that expectations underlying part of the company’s goodwill had weakened.
• Growth depends partly on an acquired platform: The Generative AI Platform substantially drove revenue growth and margin improvement. Integration costs were $2.1 million in Q3, and future performance depends on successfully integrating and scaling the acquired business.
• Backlog may not fully convert into revenue: Government funding changes, procurement delays, contract cancellations and unexercised option periods could affect the timing or amount of recognized revenue.
• Year-to-date cash use increased: Operating cash outflow for the first nine months more than doubled year over year, while accounts receivable rose materially from the end of 2025.

Summary

BigBear.ai’s third quarter combined faster revenue growth, a higher gross margin and expanding backlog with continued underlying losses. The Generative AI Platform was central to the operating improvement, while higher expenses and a forecast-related goodwill impairment kept GAAP profitability under pressure. The main follow-up points are conversion of contract wins into revenue, execution against the raised full-year outlook, progress toward positive adjusted EBITDA and moderation in operating cash use.