TenQ

The BigBear.ai story

BigBear.ai provides AI technology for defense, security, travel and trade, with Ask Sage testing whether secure generative AI can reverse declining revenue and narrow operating losses.

BigBear.ai stock reportTenQ Score 3/36 · every chart and check from its filings
  • $2.16share price, last close
  • $1.0Bmarket value
  • 3/36TenQ Score checks passed

The story in brief

  • Ask Sage drives growth. In the quarter to June 2026, Ask Sage helped lift revenue 13% to $36.7 million and gross margin to 32.8%.
  • Costs absorb the gains. Despite higher gross margin, adjusted EBITDA worsened to $(11.6) million in the quarter to June 2026 from $(8.5) million a year earlier.
  • Liquidity provides flexibility. BigBear.ai reported $409.8 million in total available cash and investments at June 30, 2026, supporting potential acquisitions despite continued operating losses.

What drives the business

  • Founded to serve defense and national security customers, BigBear.ai expanded its capabilities through the Ask Sage acquisition completed in December 2025, adding a generative AI platform authorized for sensitive government work.
  • As of January 2026, Ask Sage was used by more than 16,000 government teams and 2,500 companies, giving the business an established base for its secure AI products.
  • Its other capabilities include ConductorOS for coordinating AI and sensors in tactical environments, biometric identity verification, digital simulation, and cargo inspection technology added through the CargoSeer asset acquisition in January 2026.
  • Ask Sage’s higher margin GenAI Platforms and Products drove revenue of $36.7 million in the quarter to June 2026 and lifted gross margin to 32.8% from 25.0% a year earlier.
  • BigBear.ai secured more than 20 new contracts in the quarter to June 2026, while backlog increased 9% to $269.6 million between December 31, 2025 and June 30, 2026.

What the price assumes

The reverse DCF cannot measure the growth implied by the price because free cash flow and operating earnings are negative, leaving the valuation dependent on future profits.

At $2.50 per share and a market value of $1.2 billion, BigBear.ai trades at 9.1x sales against revenue of $132 million and revenue growth of -13.7% over the last twelve months.

TenQ’s sales valuation check sets a bar below 2.5x, while its free cash flow yield check requires above 3%, compared with BigBear.ai’s -6.1%.

What could change the story

  • Government funding delays, shutdowns and contract cancellations can prevent backlog from becoming revenue, and customer procurement cycles make the timing of revenue uneven.
  • Ask Sage’s gross margin contribution has not yet offset spending growth: selling, general and administrative expenses reached $31.8 million in the quarter to June 2026, compared with $21.5 million a year earlier.
  • The net loss narrowed to $25.7 million from $228.6 million over those periods, but much of that improvement reflected smaller derivative valuation losses and the absence of the earlier goodwill impairment rather than operating profitability.
  • Free cash flow was -$73 million over the last twelve months, so the reported investment reserves should not be confused with a business that funds itself.
  • Shares outstanding increased 181.0% over the last three years, while acquisition integration and competition from government contractors, cloud providers and customers’ internal development teams could limit the benefits of the product expansion.

What to watch next

  • BigBear.ai affirmed revenue guidance of $135 million to $165 million for 2026, with management aiming for 17% revenue growth and acceleration in the second half of 2026.
  • The next releases will show whether the $269.6 million backlog converts into revenue and whether Ask Sage can sustain the gross margin improvement recorded in the quarter to June 2026.
  • Operating expenses, adjusted EBITDA and cash flow will show whether higher product revenue is narrowing losses rather than only expanding the business.
  • Acquisition announcements and changes in the $409.8 million cash and investment balance will show how management allocates its financial reserves.

Sources

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