BigBear.ai Holdings, Inc. BBAI is gaining traction as it expands the deployment of its applied AI solutions across defense, security, trade and travel. In the second quarter of 2026, revenue increased 13% year over year to $36.7 million, driven by stronger performance from its generative AI platforms and products. Gross margin soared to 32.8%, up 781 basis points from the prior-year quarter.
New customer wins and product deployments are providing additional avenues for growth. BigBear.ai secured more than 20 contracts during the quarter, with individual values of up to $5 million, while backlog reached $270 million, up about $22 million from the start of the year. The company also highlighted a five-year CargoSeer deployment agreement in El Salvador following a successful 12-month pilot, potentially providing a template for expansion into other customs markets.
The company is also broadening its AI offerings beyond connected environments. Ask Sage now supports local and air-gapped deployments, allowing customers in highly secure settings to use generative AI without relying on external networks. Meanwhile, ConductorOS demonstrated its ability to coordinate multi-vendor drone systems, addressing the growing need for interoperability across autonomous platforms.
Still, broader growth will depend on converting these deployments and contract wins into sustained revenue. Adjusted EBITDA remained negative at $11.6 million as the company increased spending on sales, go-to-market initiatives and R&D. With $410 million in cash and investments, BigBear.ai has resources to pursue additional capabilities and acquisitions, but execution will remain key to widening its growth base.
Competitors Expand Their AI and Defense Capabilities
BigBear.ai competes with technology providers that combine AI, data analytics and defense-focused solutions. Palantir Technologies PLTR is a key competitor, with its platforms helping government and commercial customers integrate data, AI and decision-making capabilities. Its growing focus on deploying AI directly into operational environments overlaps with BigBear.ai’s strategy of providing mission-ready solutions.
C3.ai AI is another relevant competitor, offering enterprise AI applications designed to address operational and analytics needs across industries. Its AI capabilities span areas such as defense, manufacturing and supply-chain management, creating some overlap with BigBear.ai’s efforts to expand applied AI beyond its traditional customer base.
BigBear.ai’s differentiation centers on specialized applications for national security and trade and travel, including CargoSeer, Ask Sage and ConductorOS. The company’s recent deployments demonstrate an emphasis on solving specific mission-critical problems, while competitors pursue broader AI platforms and enterprise applications.
BBAI’s Price Performance, Valuation & EPS Estimate Trend
Shares of BBAI have plunged 22.2% over the past six months, underperforming the Zacks Computers - IT Services industry, as shown below.
BBAI’s 6-Month Price Performance
Image Source: Zacks Investment Research
BBAI stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 9.67, as evidenced by the chart below.
P/S Ratio (F12M)
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for BBAI’s 2026 loss per share has widened in the past 30 days, as shown below. However, the estimated figure indicates a narrower loss than the year-ago loss of 82 cents per share.
EPS Trend of BBAI
Image Source: Zacks Investment Research
BBAI’s Zacks Rank
BigBear.ai currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).