BigBear ai Holdings Inc (BBAI)

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BigBear.ai Announces Close of Pangiam Acquisition, $54M of Incremental Cash Proceeds, Net Loss of $21.3 million in Q4 2023, and Second Consecutive Quarter of Positive Adjusted EBITDA in Q4 2023 Financial Results
Business Wire
Thu, Mar 7, 2024, 4:15 PM EST

Announced successful close of Pangiam acquisition in an all-stock transaction, combining facial recognition, image-based anomaly detection and advanced biometrics with BigBear.ai’s computer vision capabilities.

Approximately $54 million of cash proceeds, before fees, related to warrants exercised in the first quarter of 2024, bringing additional liquidity and strengthening the Company’s balance sheet.

Net loss of $21.3 million in the fourth quarter of 2023, an improvement of $8.6 million as compared to a net loss of $29.9 million for the fourth quarter of 2022.

Second consecutive quarter of positive adjusted EBITDA at $3.7 million.

2H 2023 cash flow positive, first time since public company debut in December 2021.

2024 Revenue outlook provided of $195 - $215 million.

COLUMBIA, Md., March 07, 2024--(BUSINESS WIRE)--BigBear.ai Holdings, Inc. (NYSE: BBAI) ("BigBear.ai" or the "Company"), a leader in AI-powered decision intelligence solutions, today announced financial results for the fourth quarter and full year ended December 31, 2023, released 2024 revenue guidance and issued an investor letter that has been posted to the Investor Relations section of the Company’s website.

BigBear.ai CEO Mandy Long said, "As we close out FY 2023, I am proud of the work that we have done as a company to solidify BigBear.ai’s foundation. We entered the year in a different position than many other companies that are playing a role in the transformative potential of artificial intelligence. After joining in October 2022, I spoke openly about needing a foundational year to overhaul our operating structure, wind down contracts that did not meet our business objectives, reset the strategic priorities of BigBear.ai, and manage uncertainty in a volatile macroeconomic and geopolitical environment. In short, we had to do the hard work to get our house in order.? We stand here in early 2024 knowing that we did what we said we would do. With the completion of the Pangiam acquisition and incremental cash proceeds of $54M from warrants exercised in Q1 2024, we are well positioned for healthy growth in the year ahead."

Kevin McAleenan, former CEO of Pangiam, has been announced as President, and will play a critical role in leading the business combination. "Together, we will be able to deliver broader capabilities and more value to our customers and partners. The combined company is positioned to be a breakout leader, with both a proven track record of innovating in our target markets and developing cutting-edge products. We couldn’t be more excited about the future."

Financial Highlights

Revenue grew 0.5% to $40.6 million for the fourth quarter of 2023, compared to $40.4 million for the fourth quarter of 2022.

Gross margin of 32.1% in the fourth quarter of 2023, an increase from 29.2% in the fourth quarter of 2022, driven by improved Federal margins on our largest fixed price contracts coupled with mixing out of lower margin work such as EPASS that completed in July 2023.

Net loss of $21.3 million for the fourth quarter of 2023, which includes $9.4 million of non-cash expense related to the change in the fair value of warrants that were issued in 2023, and $6.1 million of equity-based compensation expense, compared to a net loss of $29.9 million for the fourth quarter of 2022, which included $18.3 million of non-cash goodwill impairment charges and $2.6 million of restructuring charges.

Non-GAAP Adjusted EBITDA* of $3.7 million for the fourth quarter of 2023 compared to $(2.5) million for the fourth quarter of 2022, primarily driven by gross margin improvement and continued focus on operating expense reductions.

SG&A of $18.2 million for the fourth quarter of 2023 compared to $15.6 million for the fourth quarter of 2022, primarily driven by an increase in equity-based compensation.

Recurring SG&A* has been reduced from $16.1 million in the fourth quarter of 2022 to $12.3 million in the fourth quarter of 2023, a net improvement of $3.8 million.

Ending cash balance of $32.6 million as of December 31, 2023 compared to $12.6 million as of December 31, 2022.

New Developments

BigBear.ai announced a successful close of its acquisition of Pangiam Intermediate Holdings, LLC (Pangiam), a leader in Vision AI for the global trade, travel, and digital identity industries. This strategic move, finalized on February 29, 2024, accelerates and evolves BigBear.ai’s mission to create clarity for the world’s most complex decisions in three markets: national security, supply chain management, and digital identity. The combined entity will create one of the industry’s most comprehensive Vision AI portfolios, combining facial recognition, image-based anomaly detection and advanced biometrics with BigBear.ai’s computer vision and predictive analytics capabilities. Read more: Press Release

On February 27, 2024, BigBear.ai entered into a warrant exercise agreement whereby an existing accredited investor elected to exercise approximately 8.9 million warrants, generating approximately $20.6 million of gross proceeds, prior to fees, for the Company. In connection with the warrant exercise, BigBear.ai issued 5.8 million new warrants with an exercise price per share equal to $3.78, which are not exercisable for six months.

On March 4, 2024, BigBear.ai entered into a warrant exercise agreement whereby an existing accredited investor elected to exercise approximately 13.9 million warrants, generating approximately $33.2 million of gross proceeds, prior to fees, for the Company. In connection with the warrant exercise, BigBear.ai issued 9.0 million new warrants with an exercise price per share equal to $4.75, which are not exercisable for six months.

In December 2023, BigBear.ai announced a partnership with Amazon Web Services Professional Services (AWS ProServe). AWS ProServe customers will be able to access the power of BigBear.ai’s ProModel AI-driven warehousing solutions, including optimized facilities design, streamlined process workflows, efficient staffing models, arrival and departure scheduling, and strategic resource allocation, among other enhancements. Read more: Press Release

In December 2023, the US Army announced an extension of the GFIM Phase 2 Prototype. During the initial Phase 2 period, BigBear.ai laid the groundwork for a modernized force structure system. The team successfully navigated the complexities of the U.S. Army’s requirements, and this extension will see the continuation of that partnership as the project moves towards operationalizing the prototype within the cARMY cloud. Read more: Press Release

In October 2023, BigBear.ai was invited back to participate for the third time with the Navy’s AI Task Force at its annual Naval Exercise, Digital Vanguard. BigBear.ai’s leading computer vision capabilities were on display again, showing the power of AI integrated into the Navy’s existing systems where BigBear.ai demonstrated object detection from Full Motion Video (FMV), and descriptive and predictive analytics. Following this, the US Navy has again selected BigBear.ai to participate in an upcoming naval exercise to demonstrate its data and AI orchestration capabilities. The exercise is scheduled to take place in California in the second half of this year (2024).

In the fourth quarter of 2023, BigBear.ai responded to the National Institute of Standards and Technology’s (NIST) public comment letter concerning guidelines for auditing AI systems and models, synthetic content labeling, and global technical standards development. BigBear continues to provide thought leadership, aiding in the important discussion of shaping future AI standards.

BigBear.ai exhibited at the Association of the United States Army annual meeting & exposition in October of 2023. BigBear.ai demonstrated its latest solutions in Intelligent Automation, Contested Logistics, and Computer Vision.

BigBear.ai’s CTO, Ted Tanner Jr., spoke at MIT’s 5th annual workshop focused on AI for National security. Ted’s panel focused on both the needs for AI in the Defense space as well as the challenges posed by AI and how to continue to safeguard the nation during the evolution of this technology. Ted was joined by panelists from NASA Goddard Space Flight Center, NSA, Georgetown University, and OSD R&E.

BigBear.ai CTO, Ted Tanner Jr., spoke on the state of the union of the AI industry as the keynote speaker at the inaugural State of Tech Dinner, Charleston Digital Corridor in Charleston, SC.

Financial Outlook

The following information and other sections of this release contain forward-looking statements, which are based on the Company’s current expectations. Actual results may differ materially from those projected. It is the Company’s practice not to incorporate adjustments into its financial outlook for proposed acquisitions, divestitures, changes in law, or new accounting standards until such items have been consummated, enacted, or adopted. For additional factors that may impact the Company’s actual results, refer to the "Forward-Looking Statements" section in this release.

For the year-ended December 31, 2024, the Company projects:

Revenue between $195 million and $215 million

The projections include the results of Pangiam after the acquisition date of February 29, 2024

https://finance.yahoo.com/news/bigbear-ai-announces-close-pangiam-211500280.html