TLDR
- BigBear.ai stock jumped 181% over the past year, outpacing NVIDIA’s 33.2% gain, despite revenue drops of 20% and 18% in Q3 and Q2 respectively.
- The company acquired Ask Sage, a generative AI platform serving 100,000 users across 16,000 government teams, for $250 million to boost future growth.
- BigBear.ai ended Q3 with $456.6 million in cash and posted $2.5 million net income, compared to a $15.1 million loss the prior year.
- Operating losses more than doubled to $21.9 million in Q3, and gross margins contracted 240 basis points to 22.8% in the first nine months of 2025.
- Analysts set an average price target of $6.67 for BBAI stock, representing 10.8% upside, with the highest target at $8 for 32.9% potential gain.
BigBear.ai stock has delivered a 181% return over the past year. That number crushes NVIDIA’s 33.2% gain during the same period.
BigBear.ai Holdings, Inc., BBAI
The rally came despite revenue headwinds that hit the company hard. Third quarter revenues fell 20% year over year to $33.1 million. The second quarter wasn’t much better, dropping 18% to $32.5 million.
President Trump’s federal spending cuts created the problem. Earlier in 2025, government willingness to boost domestic technology spending had pushed BBAI shares to record highs. Then the budget cuts arrived and revenues tumbled.
But the company just made a move that could change everything. BigBear.ai signed a definitive deal to acquire Ask Sage for $250 million.
Ask Sage is a generative AI platform built for secure deployment in defense and national security. The platform already supports 100,000 users across 16,000 government teams. Agencies from the Defense Health Agency to the US Space Force use it.
The Ask Sage Integration Play
CEO Kevin McAleenan explained the strategy behind the acquisition. “By integrating Ask Sage with BigBear.ai, we are creating what the market has been asking for: a secure, integrated AI platform that connects software, data, and mission services in one place.”
The company maintained its full-year sales guidance of $125 million to $140 million. Management expects the Ask Sage deal to accelerate revenue growth going forward.
BigBear.ai’s balance sheet gives it room to execute. The company ended Q3 with $456.6 million in cash. That’s a record amount and a sequential increase from Q2.
The strong cash position funds growth initiatives and potential acquisitions. It also allows the company to scale operations faster.
The company hit a profitability milestone in Q3. BigBear.ai posted net income of $2.5 million. A year earlier, the company lost $15.1 million in the same quarter.
McAleenan expects increased government spending next year. He cited Trump’s “big, beautiful bill” as a potential catalyst for business growth.
Margin Pressure Creates Near-Term Concerns
The financial picture isn’t entirely rosy. Operating losses more than doubled in Q3. The company lost $21.9 million from operations, compared to $10.5 million a year earlier.
Gross margins compressed 240 basis points to 22.8% year over year in the first nine months of 2025. Adjusted EBITDA margin hit negative 24.8%, down from negative 3.8% a year ago.
Lower volume on certain Army programs hurt performance. Government funding delays on programs and restructuring costs (up 223.2% year over year) added pressure.
Research and development expenses rose due to increased headcount. The timing of certain R&D projects also contributed to the higher costs.
BigBear.ai competes against Palantir Technologies and C3.ai in the generative AI space. Palantir offers enterprise AI through its AIP/Foundry platform. C3.ai focuses on agentic capabilities for vertical enterprise use cases.
BigBear.ai’s competitive edge comes from deep mission expertise. The company’s tailored defense and government solutions work well for highly regulated workflows.
The stock trades at a forward 12-month price-to-sales ratio of 15.52. That’s below industry peers. Analysts set an average price target of $6.67, representing 10.8% upside from the $6.02 closing price. The highest target reaches $8, or 32.9% potential gain.
Bottom-line estimates for 2025 point to a loss of 93 cents per share. For 2026, analysts expect losses to narrow to 25 cents per share. Those figures represent year-over-year improvements of 15.5% and 72.8% respectively.
Ask Sage’s deployment across 16,000 government teams positions BigBear.ai for recurring revenue growth. The platform’s FedRAMP-High certification and model-agnostic design allow secure AI deployment at the tactical edge.
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