BigBear.ai Holdings, Inc. BBAI is seeking to expand its position in mission-critical artificial intelligence as demand rises for secure, specialized AI across defense, security, trade and travel.
In the second quarter of 2026, revenues increased 13% year over year to $36.7 million, while gross margin expanded 781 basis points to 32.8%. The company won more than 20 new contracts during the quarter, with individual awards valued at up to $5 million. Backlog reached $270 million, up about $22 million from the beginning of the year. Management maintained its 2026 revenue target of $135-$165 million.
BigBear.ai is attempting to broaden its addressable market through products that can serve commercial as well as government customers. CargoSeer, for example, uses computer vision and AI to analyze cargo scans alongside customs and trade data. The company secured a five-year commercial deployment agreement in El Salvador following a 12-month pilot contract, potentially providing a model for international expansion.
The company is also expanding Ask Sage into disconnected and air-gapped environments, while ConductorOS is designed to coordinate drones, sensors and other autonomous systems from multiple vendors. These offerings could extend BigBear.ai's reach beyond traditional defense contracts.
However, profitability remains a challenge. Adjusted EBITDA was negative $11.6 million, compared with negative $8.5 million a year earlier, reflecting increased investments in sales, go-to-market activities and R&D.
With $410 million in cash and investments, BigBear.ai has resources to pursue product development and acquisitions. The key question is whether the company can convert its specialized defense expertise into repeatable commercial deployments and sustained revenue growth.
BBAI Faces Broader AI Competition
BigBear.ai’s strategy places it alongside AI companies seeking to serve both government and commercial customers. Two relevant competitors are Palantir Technologies PLTR and C3.ai AI.
Palantir has a substantially broader commercial footprint while maintaining a strong government business. In the second quarter of 2026, Palantir’s revenues jumped 93% year over year to $1.94 billion, with U.S. commercial revenues rising 149% and U.S. government revenues increasing 90%. The company also closed 220 deals worth at least $1 million.
C3.ai similarly combines enterprise and government AI applications. Its fiscal 2026 results included agreements with defense and government agencies as well as companies across energy, manufacturing and other industries. In first-quarter fiscal 2027, C3.ai reported $52.4 million in revenues and continued winning federal and commercial contracts.
For BBAI, the competitive landscape highlights the opportunity — and challenge — of taking specialized, mission-ready AI into larger commercial markets while maintaining its defense and security expertise.
BBAI’s Price Performance, Valuation & EPS Estimate Trend
Shares of BBAI have plunged 20.2% 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 8.55, 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 60 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).
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This article originally published on Zacks Investment Research (zacks.com).