Dateline: November 11, 2025 — Shares of BigBear.ai (NYSE: BBAI) jumped sharply today after the AI defense contractor posted better‑than‑expected third‑quarter results and unveiled a definitive agreement to acquire Ask Sage, a secure generative‑AI platform, for approximately $250 million. Pre‑market gains reached roughly 19%–23% as investors reacted to the earnings beat and the strategic acquisition. 1
Key takeaways
- Deal: BigBear.ai signed a definitive agreement to buy Ask Sage for $250M; Ask Sage is projected to deliver ~$25M ARR in 2025, ~6× its 2024 ARR. The platform already serves 100,000+ users across 16,000 government teams and hundreds of commercial organizations. Closing is expected late Q4 2025 or early Q1 2026, pending approvals. 2
- Q3 2025 results (quarter ended Sept. 30): Revenue $33.1M (‑20% YoY), gross margin 22.4%, GAAP net income $2.5M (vs. a $15.1M loss a year ago), diluted EPS –$0.03, and adjusted EBITDA –$9.4M. Backlog: $376M. Cash and equivalents: $456.6M. 2
- Outlook: FY2025 revenue guidance reaffirmed at $125M–$140M; management did not provide net income or adjusted‑EBITDA guidance. 3
Why BBAI is rallying today
Traders are cheering a cleaner quarter that beat Street expectations alongside a deal that deepens BigBear.ai’s positioning in defense‑grade, secure generative‑AI. TipRanks highlighted the Q3 revenue beat (actual $33.1M vs. ~$31.8M consensus) and a narrower‑than‑expected diluted EPS loss (–$0.03 vs. –$0.07 est.), helping to lift shares in early trading. Coverage from multiple outlets likewise tied the pre‑market spike to the Ask Sage acquisition and the headline beats. 1
Inside the numbers
BigBear.ai’s top line declined 20% year over year on reduced volume from certain U.S. Army programs, and gross margin slipped to 22.4% from 25.9%. Despite the softer revenue mix, GAAP net income improved to $2.5M, driven primarily by non‑cash changes in derivative liabilities tied to convertible notes and warrants; adjusted EBITDA remained negative, at –$9.4M. The company reported $456.6M in cash and equivalents at quarter‑end and a $376M backlog, providing liquidity and future revenue visibility even as near‑term program timing remains lumpy. 2
What Ask Sage adds
Ask Sage brings a production‑scale platform for secure distribution of AI models and agentic AI—built for defense, national security, and other highly regulated sectors. Management says the platform is already deployed at scale and expects ~$25M non‑GAAP ARR in 2025. BigBear.ai sees the combination as a way to offer an integrated, secure AI stack spanning software, data, and mission services—an approach aimed squarely at federal and critical‑infrastructure buyers who require controlled environments. Closing is anticipated later this quarter or early next, and the company does not expect the purchase to materially affect consolidated 2025 results due to timing. 3
Guidance and 2026 setup
BigBear.ai reaffirmed FY2025 revenue of $125M–$140M and reiterated that, given variables like program starts and acquisition timing, it is not issuing net income or adjusted‑EBITDA guidance. Management pointed to potential border‑security and defense tailwinds in 2026 (referencing expected federal spending momentum) while acknowledging delays tied to the recent U.S. government shutdown. 3
Market context and sentiment
Recent analyst snapshots compiled by TipRanks show “Moderate Buy” (2 Buys, 1 Hold) with an average price target near $5.83—figures that could shift as new estimates roll in post‑print. Separate coverage across financial media today connected the double‑digit pre‑market pop to the earnings beat and the Ask Sage news. 4
Risks and what to watch next
- Program timing & mix: Revenue still depends heavily on U.S. government program schedules; Q3 softness tied to Army work illustrates that sensitivity. 2
- Profitability path: Adjusted EBITDA remained negative; investors will watch for margin lift as backlog converts and as the company integrates Ask Sage. 2
- Deal closing & integration: Look for regulatory and closing disclosures on Ask Sage (expected late Q4 2025/early Q1 2026), plus early evidence of cross‑sell into defense and border‑security accounts. 3
Bottom line
BigBear.ai delivered a cleaner quarter with a headline beat, returned to GAAP profitability, and moved to acquire a secure gen‑AI platform deeply embedded in government workflows. With cash of ~$456.6M, a $376M backlog, and FY2025 revenue reaffirmed, the near‑term story now hinges on closing Ask Sage, stabilizing program timing, and translating backlog into higher‑margin growth as federal spending normalizes into 2026. 3
Sources: BigBear.ai press release and investor materials; Business Wire; TipRanks; additional same‑day market coverage. 3
This article is for informational purposes only and does not constitute investment advice.
