- Stock pops pre‑market: BBAI traded around $6.81 (+~19%) before the open after Monday’s results and M&A news. 1
- Q3 2025 at a glance: Revenue $33.1M (‑20% y/y); gross margin 22.4%; GAAP net income $2.5M (driven largely by non‑cash derivative revaluation); Adjusted EBITDA –$9.4M; backlog $376M. 2
- Cash & outlook:Record cash $456.6M; FY25 revenue guide reaffirmed at $125M–$140M. 2
- Deal news: BigBear.ai signed a definitive agreement to acquire Ask Sage for $250M; closing targeted late Q4 2025 or early Q1 2026. Ask Sage projects ~$25M 2025 ARR (non‑GAAP). 2
- Analyst move today:Cantor Fitzgerald raised its BBAI price target to $7 while keeping a positive stance. 3
Market reaction: Why BBAI is spiking this morning
BigBear.ai’s pre‑market surge follows a one‑two punch of better‑than‑expected top‑line and a transformational acquisition announced after Monday’s close. Barron’s flagged BBAI among today’s biggest pre‑market movers on the back of the Ask Sage deal and a revenue beat. 4
Q3 2025 by the numbers
Management highlighted mixed operating trends: a leaner quarter against tough comps and delayed government program volume, but a stronger balance sheet and robust pipeline.
- Revenue:$33.1M (vs. $41.5M a year ago; –20% y/y), primarily on lower volume in certain U.S. Army programs. 2
- Gross margin:22.4% (25.9% a year ago). 2
- GAAP net income:$2.5M (vs. –$15.1M), largely driven by non‑cash changes in derivative liabilities tied to 2029 notes and warrants. 2
- Adjusted EBITDA:–$9.4M (vs. +$0.9M), reflecting lower margin and higher SG&A. 2
- Backlog:$376M as of Sept. 30, 2025. 2
- Cash:$456.6M (record balance) positioning the company for M&A and growth investments. 2
- FY25 outlook:Revenue $125M–$140M, unchanged; management does not expect Ask Sage to materially impact 2025 consolidated results given the closing timeline. 2
The Ask Sage acquisition: what’s in the deal — and why it matters
BigBear.ai signed a definitive agreement to acquire Ask Sage, a fast‑growing Generative AI platform focused on secure distribution of models and agentic AI in defense, national security, and other highly regulated sectors.
Strategic highlights
- Purchase price:$250M total, structured as $140M in cash plus $110M in either additional cash or BigBear.ai common stock (at BBAI’s option), subject to customary adjustments. 5
- Consideration mechanics (if stock elected): the number of shares issued depends on a 20‑day VWAP collar with defined share counts above/below thresholds. 5
- Scale & traction: Ask Sage supports 100,000+ users across 16,000 government teams and hundreds of commercial organizations; it is in production at scale in sensitive environments. 2
- Financial contribution: Ask Sage is projected to deliver ~$25M in 2025 ARR (non‑GAAP). 2
- Timing: Closing late Q4 2025 or early Q1 2026, pending approvals (including HSR) and other customary conditions. 2
CEO Kevin McAleenan framed the combination as creating a secure, integrated AI platform that unifies software, data, and mission services—tailored for defense and other regulated sectors. Management also pointed to potential acceleration in U.S. government tech spending next year. 2
Street reaction on Nov. 11
Before the bell, Cantor Fitzgerald lifted its BBAI price target to $7, citing the enhanced positioning in secure GenAI and regulated markets post‑deal. That note arrived alongside the pre‑market rally. 3
What to watch next
- Regulatory & shareholder milestones for Ask Sage (HSR expiration/termination; Ask Sage stockholder approval) and closing timeline into late Q4 or early Q1. 5
- Program ramps & awards in defense, border security, and international markets as the FY26 budget cycle approaches. 2
- Margin path back toward breakeven on Adjusted EBITDA as integration proceeds and SG&A normalizes. 2
Context: a volatile 2025, but a stronger balance sheet now
BigBear.ai shares have seesawed this year amid restatement issues and guidance resets earlier in 2025, which pressured sentiment. The company now emphasizes record liquidity and a targeted M&A strategy to consolidate its niche in secure AI. 6
Key takeaways for investors
- Catalyst today: A credible M&A target with live federal adoption, coupled with reaffirmed guidance and a sizable cash cushion. 2
- Execution risk: Integration, timing of federal awards, and the cost to scale commercial go‑to‑market remain the swing factors. 2
- Valuation watch: With pre‑market levels implying a sharp re‑rating, track whether analyst estimate revisions (post‑deal) keep pace with price. 3
This article is for informational purposes only and does not constitute investment advice.
