BigBear.ai (BBAI) Q2 FY26 earnings call: guidance

BigBear.ai reported a 13% year-over-year revenue increase to $36.7 million and a 781 basis point improvement in gross margin to 32.8%, primarily driven by Gen AI platforms and products. The company is on track to meet its full-year revenue guidance of $135 million to $165 million. Despite increased investments in sales, go-to-market, and R&D, which led to a decrease in Adjusted EBITDA to negative $11.6 million, the company emphasizes its strong financial foundations and focused strategy.

The company secured more than 20 new contracts in Q2, each valued up to $5 million, with both existing and new customers. This follows a Q1 announcement of a $53 million longer-term contract with an intelligence customer. These wins contributed to a 9% growth in backlog since year-end, reaching $270 million, demonstrating strong demand for specialized AI in complex and secure environments.

BigBear.ai signed a 5-year commercial deployment agreement for CargoSeer in El Salvador, marking its first Central American deployment. This technology leverages AI and computer vision to analyze cargo scans and trade data, assisting customs officials in detecting anomalies, collecting duties, and facilitating legitimate trade. This solution addresses the substantial operational challenges of balancing growing trade volumes with increasing smuggling threats in the $26 trillion global merchandise trade market.

The company expanded its Ask Sage platform for the Department of War and other departments, introducing new air-gap and local hardware deployments up to top-secret level. A highly portable, model-agnostic, and multimodal device, about the size of a hardcover book, brings core AI capabilities to physically isolated environments. This ensures intelligence analysts have access to the latest AI tools without external network access, addressing critical customer pain points regarding access and predictability.

BigBear.ai's ConductorOS software demonstrated its capability in military exercises by enabling a single soldier to command multiple drones from different vendors, even in degraded communications. This open, vendor-neutral architecture allows various autonomous systems to connect and coordinate, addressing the growing need for multi-vendor fleet control in modern battle spaces. The U.S. government's significant investment in drone technology, including a $54.6 billion request for an autonomous warfare unit, highlights the market opportunity for ConductorOS.

CEO Kevin McAleenan outlined a dual focus on delivering top-line revenue growth and aggressively pursuing accretive M&A targets that offer catalytic technologies with clear potential for rapid deployment at scale. The company views its core expertise in applied AI as a significant advantage, positioning it to win in a market where many companies are still defining their AI strategy. The recent acquisitions of Ask Sage and CargoSeer are fully integrated and performing well.

BigBear.ai achieved Cybersecurity Maturity Model Certification (CMMC) Level 2 ahead of schedule in July. This rigorous U.S. federal cybersecurity standard validates the company's advanced security controls for protecting controlled and classified information. This certification strengthens trust with both domestic and international partners and demonstrates a gold standard commitment to data privacy and infrastructure security.