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Equities

BigBear.ai Stock Plummets Over 21% on Disappointing Revenue and Loss Figures

BigBear.ai's stock plunges over 21% post-earnings, with Q4 revenue at $40.6M barely growing and 2024 projections optimistic.

By Barry Stearns

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3/7, 20:19 EST
Broadcom Inc.
Marvell Technology, Inc.

Key Takeaway

  • BigBear.ai's stock plummeted over 21% after reporting a marginal revenue increase to $40.6 million, missing expectations.
  • Despite a net loss of $21.3 million, the company forecasts higher future revenue between $195 million to $215 million.
  • The AI sector faces investor scrutiny, impacting companies like SoundHound AI and chipmakers Marvell Technology and Broadcom.

Revenue and Loss Figures Disappoint

BigBear.ai Holdings Inc., a smaller company in the artificial intelligence sector, experienced a significant drop in its stock price after hours, falling more than 21% following underwhelming revenue and loss figures. In the fourth quarter, the company saw minimal revenue growth, reaching $40.6 million, just 0.5% higher than the previous year, falling short of the FactSet analyst consensus of $42.8 million. The net loss for the quarter was $21.3 million, or 14 cents per share, compared to a loss of $29.9 million, or 23 cents per share, in the same period last year. The adjusted Ebitda for the quarter was $3.7 million, an improvement from a $2.5 million loss the year before.

Future Revenue Projections

Looking ahead, BigBear.ai anticipates revenue between $195 million to $215 million for the upcoming year, surpassing analysts' expectations of $173.7 million. This projection includes the results from the recent acquisition of Pangiam, which is expected to contribute positively to the company's growth. CEO Mandy Long expressed confidence in the company's growth prospects, stating, "With the completion of the Pangiam acquisition and incremental cash proceeds of $54 million from warrants exercised in Q1 2024, we are well positioned for healthy growth in the year ahead."

Market Response and Industry Trends

BigBear.ai's disappointing financial results align with a broader trend in the AI sector, where companies are facing scrutiny from investors following earnings reports. Other AI-focused companies, such as SoundHound AI Inc., have also experienced share price pressure post-earnings. Additionally, large chip companies like Marvell Technology Inc. and Broadcom Inc. have faced challenges in their non-AI business segments, impacting their stock performance.

Management Quotes

  • Mandy Long, CEO of BigBear.ai:

    "With the completion of the Pangiam acquisition and incremental cash proceeds of $54 [million] from warrants exercised in Q1 2024, we are well positioned for healthy growth in the year ahead."