BigBear.ai Revenue Increased 6.5% in 2022
BigBear.ai’s fourth quarter revenue increase year over year by 20.6% from $33.5 million to $40.4 million. The company’s revenues for 2022 increased to $155 million, which was a $9.4 million increase from $145.6 million in 2021.
BigBear.ai reported a $29.9 million net fourth quarter loss, which the company said was primarily a result of an $18.3 million non-cash goodwill impairment charge in the company’s analytics segment. The fourth-quarter was a reduction from the $114.8 million net loss in the same period in 2021.
The company, which applies artificial intelligence and machine learning to satellite data, had a net loss of $121.7 million last year. It was a slight reduction from the $123.6 million net loss the previous year.
BigBear said $60.5 million of the 2021 net loss was due to stock-based compensation associated with the company’s merger with GigCapital4, Inc. That merger allowed BigBear.ai to go public on the New York Stock Exchange.
The company said it ended 2022 with a backlog of $222 million.
BigBear.ai Key Metrics
(in thousands of dollars)
| 2022 | 2021 | |
|---|---|---|
| Fourth Quarter Revenue | $40,357 | $33,478 |
| Full Year Revenue | $155,011 | $145,578 |
| Fourth Quarter Net Loss | $(29,895) | $(114,794) |
| Full Year Net Loss | $(121,674) | $(123,552) |
| Fourth Quarter EBITDA | $(24,357) | $(106,403) |
| Full Year EBITDA | $(101,197) | $(107,444) |
| Backlog | $222,000 | NA |
“Since I joined BigBear.ai in October 2022, we completed a full portfolio assessment, reduced our cost structure, recalibrated the business, and are focused on executing against our strategic plan. In the fourth quarter, we continued our mission of delivering clarity for the world’s most complex decisions with BigBear.ai’s advanced AI capabilities,” BigBear.ai CEO Mandy Long said. “This core strength, coupled with the actions we took to strengthen our financial position, enabled us to deliver on our 2022 revenue and Adjusted EBITDA targets, despite continued macroeconomic uncertainty. We are building momentum and positioning ourselves as a strong competitor for larger prime contracts.”
“With our AI-powered decision intelligence solutions and more efficient operating structure, we are positioned to grow our footprint in key market categories – including global supply chains & logistics, autonomous systems, and cyber – and capitalize on our differentiators and the growing momentum in the field of artificial intelligence. We are focused on driving meaningful, sustainable long-term growth,” Long added.
BigBear.ai’s financials are below.
Summary of Results for the Fourth Quarter and Year to Date Periods Ended
December 31, 2022 and December 31, 2021
(Unaudited)
| $ thousands (expect per share amounts) | Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | Year Ended December 31, 2022 | Year Ended December 31, 2021 | ||||
| Revenues | $ | 40,357 | $ | 33,478 | $ | 155,011 | $ | 145,578 |
| Cost of revenues | 28,572 | 29,651 | 112,018 | 111,510 | ||||
| Gross margin | 11,785 | 3,827 | 42,993 | 34,068 | ||||
| Operating expenses: | ||||||||
| Selling, general and administrative | 15,570 | 73,950 | 84,775 | 106,507 | ||||
| Research and development | 1,199 | 1,875 | 8,393 | 6,033 | ||||
| Restructuring charges | 2,641 | — | 4,203 | — | ||||
| Transaction expenses | 454 | — | 2,605 | — | ||||
| Goodwill impairment | 18,292 | — | 53,544 | — | ||||
| Operating loss | (26,371) | (71,998) | (110,527) | (78,472) | ||||
| Interest expense | 3,770 | 2,183 | 14,436 | 7,762 | ||||
| Net (decrease) increase in fair value of derivatives | (27) | 33,353 | (1,591) | 33,353 | ||||
| Loss on extinguishment of debt | — | 2,881 | — | 2,881 | ||||
| Other expense | 7 | 1 | 19 | — | ||||
| Loss before taxes | (30,121) | (110,416) | (123,391) | (122,468) | ||||
| Income tax (benefit) expense | (226) | 4,378 | (1,717) | 1,084 | ||||
| Net loss | $ | (29,895) | $ | (114,794) | $ | (121,674) | $ | (123,552) |
| Basic and diluted net loss per share | $ | (0.23) | $ | (1.02) | $ | (0.95) | $ | (1.15) |
EBITDA* and Adjusted EBITDA* for the Fourth Quarter and Year to Date Periods Ended
December 31, 2022 and December 31, 2021
(Unaudited)
| $ thousands | Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | Year Ended December 31, 2022 | Year Ended December 31, 2021 | ||||
| Net loss | $ | (29,895) | $ | (114,794) | $ | (121,674) | $ | (123,552) |
| Interest expense | 3,770 | 2,183 | 14,436 | 7,762 | ||||
| Income tax (benefit) expense | (226) | 4,378 | (1,717) | 1,084 | ||||
| Depreciation and amortization | 1,994 | 1,830 | 7,758 | 7,262 | ||||
| EBITDA | (24,357) | (106,403) | (101,197) | (107,444) | ||||
| Adjustments: | ||||||||
| Equity-based compensation | (295) | 60,529 | 10,865 | 60,615 | ||||
| Net (decrease) increase in fair value of derivatives(1) | (27) | 33,353 | (1,591) | 33,353 | ||||
| Restructuring charges(2) | 2,641 | — | 4,203 | — | ||||
| Loss on extinguishment of debt(3) | — | 2,881 | — | 2,881 | ||||
| Transaction bonuses(4) | — | 1,089 | — | 1,089 | ||||
| Capital market advisory fees(5) | — | 2,961 | 741 | 6,917 | ||||
| Termination of legacy benefits(6) | — | 157 | — | 1,639 | ||||
| Management fees(7) | — | 318 | — | 1,001 | ||||
| Non-recurring integration costs(8) | 781 | 538 | 7,255 | 1,783 | ||||
| Commercial start-up costs(9) | — | 2,245 | 6,490 | 3,018 | ||||
| Transaction expenses(10) | 454 | — | 2,605 | — | ||||
| Goodwill impairment(11) | 18,292 | — | 53,544 | — | ||||
| Adjusted EBITDA | $ | (2,511) | $ | (2,332) | $ | (17,085) | $ | 4,852 |
Footnotes
| (1) | The (decrease) increase in fair value of derivatives primarily relates to the changes in the fair value of certain Forward Share Purchase Agreements (FPAs) that were entered into prior to the closing of the Business Combination and were fully settled during the first quarter of 2022, as well as changes in the fair value of private warrants. | |
| (2) | In the third and fourth quarters of 2022, the Company incurred employee separation costs associated with a strategic review of the Company’s capacity and future projections to better align the organization and cost structure and improve the affordability of its products and services. In addition, restructuring charges include an impairment of the right-of-use assets associated with certain underutilized real estate leases that we vacated during the fourth quarter. | |
| (3) | Loss on extinguishment of debt consists of the derecognition of the remaining unamortized debt issuance costs related to the Antares Capital Credit Facility upon its settlement in December 2021. | |
| (4) | Bonuses paid to certain employees related to the closing of the Business Combination. | |
| (5) | The Company incurred capital market and advisory fees related to advisors assisting with the Business Combination. | |
| (6) | In the third quarter of 2021, the Company elected to terminate certain legacy employee incentive benefits with final payments made in the fourth quarter of 2021. | |
| (7) | Management and other related consulting fees paid to AE Partners. These fees ceased subsequent to the Business Combination. | |
| (8) | Non-recurring internal integration costs related to the Business Combination. | |
| (9) | Commercial start-up costs includes certain non-recurring expenses associated with tailoring the Company’s software products for commercial customers and use cases. | |
| (10) | The Company incurred transaction expenses related to the acquisition of ProModel Corporation, which closed on April 7, 2022. | |
| (11) | During the second and fourth quarters of 2022, the Company recognized non-cash goodwill impairment charges related to its Cyber & Engineering and Analytics business segments, respectively. |
Consolidated Balance Sheets as of
December 31, 2022 and December 31, 2021
(Unaudited)
| $ in thousands | December 31, 2022 | December 31, 2021 | ||
| Assets | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 12,632 | $ | 68,900 |
| Restricted cash | — | 101,021 | ||
| Accounts receivable, less allowance for doubtful accounts | 30,091 | 28,605 | ||
| Contract assets | 1,312 | 628 | ||
| Prepaid expenses and other current assets | 10,300 | 7,028 | ||
| Total current assets | 54,335 | 206,182 | ||
| Non-current assets: | ||||
| Property and equipment, net | 1,433 | 1,078 | ||
| Goodwill | 48,683 | 91,636 | ||
| Intangible assets, net | 85,685 | 83,646 | ||
| Deferred tax assets | 51 | — | ||
| Right-of-use assets | 4,638 | — | ||
| Other non-current assets | 483 | 780 | ||
| Total assets | $ | 195,308 | $ | 383,322 |
| Liabilities and equity | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 15,422 | $ | 5,475 |
| Short-term debt, including current portion of long-term debt | 2,059 | 4,233 | ||
| Accrued liabilities | 13,366 | 10,735 | ||
| Contract liabilities | 2,022 | 4,207 | ||
| Current portion of long-term lease liability | 806 | — | ||
| Derivative liabilities | — | 44,827 | ||
| Other current liabilities | 2,085 | 541 | ||
| Total current liabilities | 35,760 | 70,018 | ||
| Non-current liabilities: | ||||
| Long-term debt, net | 192,318 | 190,364 | ||
| Long-term lease liability | 5,092 | — | ||
| Deferred tax liabilities | — | 248 | ||
| Other non-current liabilities | 10 | 324 | ||
| Total liabilities | 233,180 | 260,954 | ||
| Stockholders’ (deficit) equity: | ||||
| Common stock | 14 | 14 | ||
| Additional paid-in capital | 272,528 | 253,744 | ||
| Treasury stock, at cost 9,952,803 shares at December 31, 2022 and — shares at December 31, 2021 | (57,350) | — | ||
| Accumulated deficit | (253,064) | (131,390) | ||
| Total stockholders’ (deficit) equity | (37,872) | 122,368 | ||
| Total liabilities and stockholders’ (deficit) equity | $ | 195,308 | $ | 383,322 |
Consolidated Statements of Cash Flows for the Year Ended
December 31, 2022 and December 31, 2021
(Unaudited)
| $ in thousands | Year Ended December 31, 2022 | Year Ended December 31, 2021 | ||
| Cash flows from operating activities: | ||||
| Net (loss) income | $ | (121,674) | $ | (123,552) |
| Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||
| Depreciation and amortization expense | 7,758 | 7,262 | ||
| Amortization of debt issuance costs | 2,302 | 679 | ||
| Equity-based compensation expense | 10,865 | 60,615 | ||
| Goodwill impairment | 53,544 | — | ||
| Impairment of right-of-use assets | 901 | — | ||
| Non-cash lease expense | 174 | — | ||
| Provision for doubtful accounts | 55 | — | ||
| Deferred income tax (benefit) expense | (1,757) | 1,042 | ||
| Loss on extinguishment of debt | — | 2,881 | ||
| Net (decrease) increase in fair value of derivatives | (1,591) | 33,353 | ||
| Loss on sale of property and equipment | — | 14 | ||
| Changes in assets and liabilities: | ||||
| (Increase) decrease in accounts receivable | (798) | (7,179) | ||
| (Increase) decrease in contract assets | (286) | 1,947 | ||
| Increase in prepaid expenses and other assets | (1,702) | (6,437) | ||
| Increase in accounts payable | 9,942 | 2,744 | ||
| (Decrease) increase in accrued liabilities | (5,121) | 2,845 | ||
| (Decrease) increase in contract liabilities | (3,740) | 3,666 | ||
| Increase in other liabilities | 2,210 | 338 | ||
| Net cash used in operating activities | (48,918) | (19,782) | ||
| Cash flows from investing activities: | ||||
| Acquisition of businesses, net of cash acquired | (4,465) | (224) | ||
| Purchases of property and equipment | (769) | (645) | ||
| Proceeds from disposal of property and equipment | — | 6 | ||
| Net cash used in investing activities | (5,234) | (863) | ||
| Cash flows from financing activities: | ||||
| Repurchase of shares as a result of forward share purchase agreements | (100,896) | — | ||
| Proceeds from issuance of convertible notes | — | 200,000 | ||
| Repayment of term loan | — | (110,000) | ||
| Proceeds from short-term borrowings | 2,059 | 9,233 | ||
| Repayment of short-term borrowings | (4,233) | (5,000) | ||
| Proceeds from the Merger | — | 101,958 | ||
| Payment of Merger transaction costs | — | (9,802) | ||
| Payment of debt issuance costs to third parties | — | (5,527) | ||
| Payments for taxes related to net share settlement of equity awards | (67) | — | ||
| Net cash (used in) provided by financing activities | (103,137) | 180,862 | ||
| Net (decrease) increase in cash and cash equivalents and restricted cash | (157,289) | 160,217 | ||
| Cash and cash equivalents and restricted cash at the beginning of period | 169,921 | 9,704 | ||
| Cash and cash equivalents and restricted cash at the end of the period | $ | 12,632 | $ | 169,921 |
*Refer to the “Non-GAAP Financial Measures”
One response to “BigBear.ai Revenue Increased 6.5% in 2022”
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I’m pondering some more space-related investment, and this company is on my list, although fairly low on it. Anyone else considering buying in?