BigBear Gets Mauled—Shares Plunge 22% After Bad Case of Limp E.D. (Earnings Dysfunction)

BigBear.ai just got absolutely obliterated, with shares plummeting 22% after an earnings report so underwhelming it might as well have been a participation trophy. Investors were hoping for AI-fueled domination, but instead, they got mediocre growth, a debt shuffle, and guidance that made “negative single-digit millions” in EBITDA sound like a win.

(Source: Giphy) 

Let’s start with the good news—because there’s not much of it. BigBear’s Q4 revenue ticked up 8% year-over-year to $43.8 million, thanks to some fresh government contracts. Gross margins improved too, hitting 37.4%, up from 32.1%, but that bump came from some year-end accounting magic rather than operational brilliance.

Now for the carnage. Net loss ballooned to a staggering $108 million, thanks to a $93.3 million hit on derivative liabilities. Adjusted EBITDA? A measly $2 million, down from $3.7 million last year. And let’s not even talk about SG&A expenses, which jumped from $18.2 million to $22.2 million—because apparently, spending more to make less is the new business strategy of 2025 LOL.

(Source: Seeking Alpha) 

On the other hand, BigBear did initiate one solid move: they restructured their debt. In short, the company swapped $182.3 million worth of 6% convertible senior notes due in 2026 for new 6% secured notes due in 2029. Since then, $58 million has already been converted into equity, bringing remaining convertible debt down to $142.3 million.

With a cash balance of just $50.1 million, the company needed to do something, and this debt shuffle buys them time. But in the grand scheme of things, they actually had their hands tied in the first place—so looking at this as a power play is delusional to some extent. In fact, this was more like patching a leaky boat and hoping the storm doesn’t hit. 

(Source: Benzinga) 

Which is why for investors expecting BigBear to turn the corner in 2025, well, how does reality taste? The guided for $160 to $180 million in revenue—which sounds decent until you realize they’re also forecasting negative EBITDA. Yes, you read that right: they’re planning to lose money all year. Making matters worse, BigBear acknowledged that a government shutdown or shifting federal priorities could force them to revisit guidance. Translation? If Uncle Sam sneezes, BigBear catches pneumonia. 

Naturally, Wall Street was less than impressed by the whole ordeal. For instance, Cantor Fitzgerald wasted no time slashing price targets, dropping from $8 to $6 while keeping an “Overweight” rating—because apparently, even train wrecks deserve a little optimism. Analyst Jonathan Ruykhaver cited underwhelming growth, weak guidance, and federal uncertainty as reasons for the downgrade, though he did throw BigBear a bone for its growing backlog, which now sits at $418 million.

(Source: Giphy) 

In the end, BigBear is supposed to be an AI powerhouse, but right now, it looks more like a government contractor with AI slapped on the label just for looks. Investors expected explosive growth, and instead, they got a limping case of E.D. (earnings dysfunction) and a whole lot of red ink. Meaning, unless this company starts turning contracts into real profit, expect Wall Street to keep treating it like an overhyped meme stock that missed its pump.

For now, take this as yet another lesson of losing money in the midst of the AI boom, and place your bets accordingly, friends. As always, stay safe and stay frosty! Until next time… 

P.S. $1.4 million, $1.02 million, and $6.715 million—these aren’t lottery winnings or Miami real estate prices… they’re all insider transactions that have gone down in the last week while retail investors were busy panic-selling everything. Want to track these corporate fat cats in real-time so you can pretend you're also an executive with material nonpublic information? (Legally, of course.) Click here to join Stocks.News premium while you still can…

Stocks.News does not hold positions in companies mentioned in the article.