- Announces definitive agreement to acquire Ask Sage, a fast-growing Generative AI platform for secure distribution of AI models and agentic AI capabilities, built specifically for defense and national security agencies and other highly-regulated sectors. AskSage is expected to deliver annual recurring revenues (ARR) of approximately $25 million in 2025 (non-GAAP), demonstrating a year-on-year increase of approximately six times AskSage's 2024 ARR. BigBear.ai will pay a total of $250 million for the whole business, subject to customary adjustments for indebtedness, cash and working capital.
- Sequential improvement to the balance sheet and record cash balance of $456.6 million, as of September 30, 2025, positioning the Company to accelerate growth.
- BigBear.ai continues to project full-year 2025 revenue between $125 million and $140 million.
MCLEAN, Va.--(BUSINESS WIRE)--BigBear.ai Holdings, Inc. (NYSE: BBAI) (“BigBear.ai” or the “Company”), a leader in AI-powered decision intelligence solutions, today announced financial results for the third quarter of 2025 and issued an investor presentation that has been posted to the Investor Relations section of the Company’s website.
“Today, I’m thrilled to announce that BigBear.ai has signed a definitive agreement to acquire Ask Sage, a cutting-edge and fast-growing Generative AI platform for secure distribution of AI models and agentic AI capabilities, built specifically for defense and national security agencies and other highly-regulated sectors. Ask Sage already supports more than 100,000 users on 16,000 government teams and across hundreds of commercial companies. It is a turnkey platform that’s in production today, at scale, in the environments that matter most,” said Kevin McAleenan, CEO of BigBear.ai.
“By integrating Ask Sage with BigBear.ai, we are creating what the market has been asking for: a secure, integrated AI platform that connects software, data, and mission services in one place,” continued McAleenan.
“Despite delays resulting from the government shutdown, we believe the potential for new business in the field of border security and defense remains strong, and we expect to see those opportunities, including accelerated spending resulting from the One Big Beautiful Bill, to materialize into contracts next year. BigBear.ai remains in a very strong position to benefit from the important task of delivering cutting-edge secure technology solutions to support national defense and the defense industrial base,” continued McAleenan.
“Subject to applicable approvals, we look forward to closing the Ask Sage acquisition and continuing to execute on our M&A strategy to drive rapid growth,” said Sean Ricker, CFO of BigBear.ai.
Financial Highlights
- Revenue decreased 20% to $33.1 million for the third quarter of 2025, compared to $41.5 million for the third quarter of 2024 primarily due to lower volume on certain Army programs.
- Gross margin was 22.4% in the third quarter of 2025, compared to 25.9% in the third quarter of 2024, primarily due to higher margin programs in the third quarter of 2024 that were not repeated in the third quarter of 2025.
- Net income in the third quarter of 2025 was $2.5 million, compared to a net loss of $15.1 million for the third quarter of 2024. The decrease in net loss was primarily driven by non-cash changes in derivative liabilities of $26.1 million associated with changes in the fair value of the convertible features of the 2029 Notes and warrants, offset by an $8 million increase in SG&A.
- Non-GAAP Adjusted EBITDA* of $(9.4) million for the third quarter of 2025 compared to $0.9 million for the third quarter of 2024, primarily driven by decreased gross margin as well as an increase in SG&A.
- SG&A of $25.3 million for the third quarter of 2025 compared to $17.5 million for the third quarter of 2024. The year-over-year increase was primarily driven by an increase in marketing of $1.4 million, non-recurring strategic initiatives of $2.0 million and SG&A labor and fringe costs of $4.3 million.
- Backlog of $376 million as of September 30, 2025.
Financial Outlook
For the year-ended December 31, 2025, the Company continues to project:
- Revenue between $125 million and $140 million
The anticipated acquisition of Ask Sage, Inc. is expected to close late in the fourth quarter of 2025 or early in the first quarter of 2026 and therefore, the Company does not expect the financial results of the acquisition to have a material impact on the Company’s consolidated 2025 financial results.
The above information on financial outlook, and other sections of this release contain forward-looking statements, which are based on the Company’s current expectations. Actual results may differ materially from those projected. It is the Company’s practice not to incorporate adjustments into its financial outlook for proposed acquisitions, divestitures, changes in law, or new accounting standards until such items have been consummated, enacted, or adopted, as the case may be. For additional factors that may impact the Company’s actual results, refer to the “Forward-Looking Statements” section in this release.
*EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are non-GAAP financial measures. See the “Non-GAAP Financial Measures” section in this press release for additional information and reconciliations. |
Summary of Results for the Third Quarter Ended
| |||||||||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||
$ thousands (expect per share amounts) |
| 2025 |
|
|
| 2024 |
|
|
| 2025 |
|
|
| 2024 |
|
Revenues | $ | 33,143 |
|
| $ | 41,505 |
|
| $ | 100,372 |
|
| $ | 114,409 |
|
Cost of revenues |
| 25,714 |
|
|
| 30,739 |
|
|
| 77,442 |
|
|
| 85,594 |
|
Gross margin |
| 7,429 |
|
|
| 10,766 |
|
|
| 22,930 |
|
|
| 28,815 |
|
Operating expenses: |
|
|
|
|
|
|
| ||||||||
Selling, general and administrative |
| 25,255 |
|
|
| 17,485 |
|
|
| 69,474 |
|
|
| 57,797 |
|
Research and development |
| 3,375 |
|
|
| 3,820 |
|
|
| 11,934 |
|
|
| 8,529 |
|
Restructuring charges |
| 660 |
|
|
| — |
|
|
| 4,257 |
|
|
| 1,317 |
|
Transaction expenses |
| — |
|
|
| — |
|
|
| — |
|
|
| 1,450 |
|
Goodwill impairment |
| — |
|
|
| — |
|
|
| 70,636 |
|
|
| 85,000 |
|
Operating loss |
| (21,861 | ) |
|
| (10,539 | ) |
|
| (133,371 | ) |
|
| (125,278 | ) |
Interest expense |
| 4,604 |
|
|
| 6,552 |
|
|
| 14,139 |
|
|
| 19,389 |
|
Net (decrease) increase in fair value of derivatives |
| (26,125 | ) |
|
| (1,330 | ) |
|
| 142,962 |
|
|
| 14,396 |
|
Loss on extinguishment of debt |
| — |
|
|
| — |
|
|
| 2,577 |
|
|
| — |
|
Other income, net |
| (2,878 | ) |
|
| (647 | ) |
|
| (5,021 | ) |
|
| (1,719 | ) |
Income (loss) before taxes |
| 2,538 |
|
|
| (15,114 | ) |
|
| (288,028 | ) |
|
| (157,344 | ) |
Income tax expense |
| 17 |
|
|
| 21 |
|
|
| 56 |
|
|
| 22 |
|
Net income (loss) | $ | 2,521 |
|
| $ | (15,135 | ) |
| $ | (288,084 | ) |
| $ | (157,366 | ) |
|
|
|
|
|
|
|
| ||||||||
Basic net income (loss) per share | $ | 0.01 |
|
| $ | (0.06 | ) |
| $ | (0.87 | ) |
| $ | (0.69 | ) |
Diluted net loss per share | $ | (0.03 | ) |
| $ | (0.06 | ) |
| $ | (0.87 | ) |
| $ | (0.69 | ) |
|
|
|
|
|
|
|
| ||||||||
Weighted-average shares outstanding: |
|
|
|
|
|
|
| ||||||||
Basic |
| 396,589,354 |
|
|
| 249,951,542 |
|
|
| 331,973,873 |
|
|
| 227,900,950 |
|
Diluted |
| 448,158,249 |
|
|
| 249,951,542 |
|
|
| 331,973,873 |
|
|
| 227,900,950 |
|
Consolidated Balance Sheets as of
| |||||||
|
|
|
| ||||
$ in thousands (except per share amounts) | September 30, 2025 |
| December 31, 2024 | ||||
Assets |
|
|
| ||||
Current assets: |
|
|
| ||||
Cash and cash equivalents | $ | 456,580 |
|
| $ | 50,141 |
|
Held-to-maturity investments, net |
| 130,084 |
|
|
| — |
|
Accounts receivable, less allowance for credit losses |
| 24,371 |
|
|
| 38,953 |
|
Contract assets |
| 2,180 |
|
|
| 895 |
|
Prepaid expenses and other current assets |
| 6,546 |
|
|
| 3,768 |
|
Total current assets |
| 619,761 |
|
|
| 93,757 |
|
Non-current assets: |
|
|
| ||||
Property and equipment, net |
| 1,439 |
|
|
| 1,566 |
|
Goodwill |
| 48,446 |
|
|
| 119,081 |
|
Intangible assets, net |
| 112,670 |
|
|
| 119,119 |
|
Held-to-maturity investments, net |
| 128,780 |
|
|
| — |
|
Right-of-use assets |
| 7,309 |
|
|
| 9,263 |
|
Other non-current assets |
| 1,351 |
|
|
| 990 |
|
Total assets | $ | 919,756 |
|
| $ | 343,776 |
|
|
|
|
| ||||
Liabilities and stockholders’ equity (deficit) |
|
|
| ||||
Current liabilities: |
|
|
| ||||
Accounts payable | $ | 5,577 |
|
| $ | 8,455 |
|
Short-term debt, including current portion of long-term debt |
| — |
|
|
| 818 |
|
Accrued liabilities |
| 18,299 |
|
|
| 19,496 |
|
Contract liabilities |
| 3,507 |
|
|
| 2,541 |
|
Current portion of long-term lease liability |
| 1,073 |
|
|
| 1,068 |
|
Derivative liabilities |
| 167,075 |
|
|
| 170,515 |
|
Other current liabilities |
| 2,392 |
|
|
| 73 |
|
Total current liabilities |
| 197,923 |
|
|
| 202,966 |
|
Non-current liabilities: |
|
|
| ||||
Long-term debt, net |
| 104,852 |
|
|
| 135,404 |
|
Long-term lease liability |
| 6,965 |
|
|
| 9,120 |
|
Total liabilities |
| 309,740 |
|
|
| 347,490 |
|
Stockholders’ equity (deficit) |
|
|
| ||||
Common stock, par value $0.0001; 500,000,000 shares authorized and 435,777,718 shares issued and outstanding at September 30, 2025 and 251,554,378 shares issued and outstanding at December 31, 2024 |
| 46 |
|
|
| 26 |
|
Additional paid-in capital |
| 1,527,239 |
|
|
| 625,130 |
|
Treasury stock, at cost 9,952,803 shares at September 30, 2025 and December 31, 2024 |
| (57,350 | ) |
|
| (57,350 | ) |
Accumulated deficit |
| (859,725 | ) |
|
| (571,641 | ) |
Accumulated other comprehensive (loss) income |
| (194 | ) |
|
| 121 |
|
Total stockholders’ equity (deficit) |
| 610,016 |
|
|
| (3,714 | ) |
Total liabilities and stockholders’ equity | $ | 919,756 |
|
| $ | 343,776 |
|
Consolidated Statements of Cash Flows for the Nine Months Ended
| |||||||||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||
$ in thousands |
| 2025 |
|
|
| 2024 |
|
|
| 2025 |
|
|
| 2024 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
| ||||||||
Net income (loss) | $ | 2,521 |
|
| $ | (15,135 | ) |
| $ | (288,084 | ) |
| $ | (157,366 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
| ||||||||
Depreciation and amortization expense |
| 4,127 |
|
|
| 3,394 |
|
|
| 11,048 |
|
|
| 8,740 |
|
Amortization of debt discount and issuance costs |
| 2,159 |
|
|
| 3,516 |
|
|
| 6,949 |
|
|
| 10,259 |
|
Amortization of discount on HTM investments |
| (125 | ) |
|
| — |
|
|
| (125 | ) |
|
| — |
|
Equity-based compensation expense |
| 5,321 |
|
|
| 5,168 |
|
|
| 17,040 |
|
|
| 16,074 |
|
Goodwill impairment |
| — |
|
|
| — |
|
|
| 70,636 |
|
|
| 85,000 |
|
Non-cash lease expense |
| 1,330 |
|
|
| 190 |
|
|
| 1,954 |
|
|
| 553 |
|
Provision for doubtful accounts |
| — |
|
|
| 44 |
|
|
| 351 |
|
|
| 220 |
|
Deferred income tax benefit |
| — |
|
|
| — |
|
|
| — |
|
|
| (37 | ) |
Loss on extinguishment of debt |
| — |
|
|
| — |
|
|
| 2,577 |
|
|
| — |
|
(Decrease) increase in fair value of derivatives |
| (26,125 | ) |
|
| (1,330 | ) |
|
| 142,962 |
|
|
| 14,396 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
| ||||||||
Decrease (increase) in accounts receivable |
| 3,972 |
|
|
| 836 |
|
|
| 14,239 |
|
|
| (5,396 | ) |
(Increase) decrease in contract assets |
| (1,479 | ) |
|
| (703 | ) |
|
| (1,285 | ) |
|
| 3,078 |
|
(Increase) decrease in prepaid expenses and other assets |
| (2,546 | ) |
|
| 297 |
|
|
| (3,138 | ) |
|
| 1,540 |
|
Increase (decrease) in accounts payable |
| 2,150 |
|
|
| (3,177 | ) |
|
| (2,889 | ) |
|
| (8,224 | ) |
Increase in accrued expenses |
| 1,749 |
|
|
| 5,958 |
|
|
| 6,514 |
|
|
| 7,610 |
|
(Decrease) increase in contracts liabilities |
| (959 | ) |
|
| (983 | ) |
|
| 966 |
|
|
| 486 |
|
(Decrease) increase in other liabilities |
| (1,680 | ) |
|
| 29 |
|
|
| 168 |
|
|
| (246 | ) |
Net cash used in operating activities |
| (9,585 | ) |
|
| (1,896 | ) |
|
| (20,117 | ) |
|
| (23,313 | ) |
Cash flows from investing activities: |
|
|
|
|
|
|
| ||||||||
Purchases of HTM investments |
| (258,739 | ) |
|
| — |
|
|
| (258,739 | ) |
|
| — |
|
Acquisition of business, net of cash acquired |
| — |
|
|
| — |
|
|
| — |
|
|
| 13,935 |
|
Purchases of property and equipment |
| (188 | ) |
|
| (137 | ) |
|
| (273 | ) |
|
| (304 | ) |
Capitalized software development costs |
| (1,142 | ) |
|
| (4,171 | ) |
|
| (3,841 | ) |
|
| (7,396 | ) |
Net cash (used in) provided by investing activities |
| (260,069 | ) |
|
| (4,308 | ) |
|
| (262,853 | ) |
|
| 6,235 |
|
Cash flows from financing activities: |
|
|
|
|
|
|
| ||||||||
Proceeds from issuance of shares for exercised RDO and PIPE warrants |
| — |
|
|
| — |
|
|
| 64,673 |
|
|
| 53,809 |
|
Payment of RDO and PIPE transaction costs |
| — |
|
|
| — |
|
|
| (551 | ) |
|
| — |
|
Proceeds from at-the-market offerings |
| 337,073 |
|
|
| — |
|
|
| 637,073 |
|
|
| — |
|
Payment of transaction costs for at-the-market offerings |
| (3,034 | ) |
|
| — |
|
|
| (8,284 | ) |
|
| — |
|
Repayment of short-term borrowings |
| (367 | ) |
|
| (417 | ) |
|
| (818 | ) |
|
| (1,229 | ) |
Payment of debt issuance costs to third parties |
| — |
|
|
| — |
|
|
| (4,679 | ) |
|
| — |
|
Proceeds from exercise of options |
| 1,971 |
|
|
| — |
|
|
| 3,604 |
|
|
| 119 |
|
Issuance of common stock upon ESPP purchase |
| — |
|
|
| — |
|
|
| 1,069 |
|
|
| 607 |
|
Payments of tax withholding from the issuance of common stock |
| (358 | ) |
|
| (3 | ) |
|
| (2,037 | ) |
|
| (3,143 | ) |
Net cash provided by (used in) financing activities |
| 335,285 |
|
|
| (420 | ) |
|
| 690,050 |
|
|
| 50,163 |
|
Effect of foreign currency rate changes on cash and cash equivalents |
| 104 |
|
|
| (58 | ) |
|
| (641 | ) |
|
| (58 | ) |
Net increase (decrease) in cash and cash equivalents |
| 65,735 |
|
|
| (6,682 | ) |
|
| 406,439 |
|
|
| 33,027 |
|
Cash and cash equivalents at the beginning of the period |
| 390,845 |
|
|
| 72,266 |
|
|
| 50,141 |
|
|
| 32,557 |
|
Cash and cash equivalents at the end of the period | $ | 456,580 |
|
| $ | 65,584 |
|
| $ | 456,580 |
|
| $ | 65,584 |
|
EBITDA* and Adjusted EBITDA* for the Third Quarter Ended
| |||||||||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||
$ thousands |
| 2025 |
|
|
| 2024 |
|
|
| 2025 |
|
|
| 2024 |
|
Net income (loss) | $ | 2,521 |
|
| $ | (15,135 | ) |
| $ | (288,084 | ) |
| $ | (157,366 | ) |
Interest expense |
| 4,604 |
|
|
| 6,552 |
|
|
| 14,139 |
|
|
| 19,389 |
|
Interest income |
| (4,306 | ) |
|
| (635 | ) |
|
| (6,566 | ) |
|
| (1,807 | ) |
Income tax expense |
| 17 |
|
|
| 21 |
|
|
| 56 |
|
|
| 22 |
|
Depreciation and amortization |
| 4,127 |
|
|
| 3,394 |
|
|
| 11,048 |
|
|
| 8,740 |
|
EBITDA |
| 6,963 |
|
|
| (5,803 | ) |
|
| (269,407 | ) |
|
| (131,022 | ) |
Adjustments: |
|
|
|
|
|
|
| ||||||||
Equity-based compensation |
| 5,321 |
|
|
| 5,168 |
|
|
| 17,040 |
|
|
| 16,074 |
|
Employer payroll taxes related to equity-based compensation(1) |
| 260 |
|
|
| 29 |
|
|
| 1,886 |
|
|
| 741 |
|
Net increase (decrease) in fair value of derivatives(2) |
| (26,125 | ) |
|
| (1,330 | ) |
|
| 142,962 |
|
|
| 14,396 |
|
Restructuring charges(3) |
| 660 |
|
|
| — |
|
|
| 4,257 |
|
|
| 1,317 |
|
Non-recurring strategic initiatives(4) |
| 3,520 |
|
|
| 1,568 |
|
|
| 5,131 |
|
|
| 4,942 |
|
Non-recurring litigation(5) |
| — |
|
|
| 574 |
|
|
| 30 |
|
|
| 1,119 |
|
Transaction expenses(6) |
| — |
|
|
| — |
|
|
| — |
|
|
| 1,450 |
|
Non-recurring integration costs(7) |
| — |
|
|
| 742 |
|
|
| — |
|
|
| 1,625 |
|
Goodwill impairment(8) |
| — |
|
|
| — |
|
|
| 70,636 |
|
|
| 85,000 |
|
Loss on extinguishment of debt(9) |
| — |
|
|
| — |
|
|
| 2,577 |
|
|
| — |
|
Adjusted EBITDA | $ | (9,401 | ) |
| $ | 948 |
|
| $ | (24,888 | ) |
| $ | (4,358 | ) |
(1) | Includes employer payroll taxes due upon the vesting of equity awards granted to employees. |
(2) | The change in fair value of derivatives during the three months ended September 30, 2025 relates to the remeasurement of the 2025 warrants, IPO warrants and the 2026 and 2029 Notes Conversion Options derivative liabilities. The change during the nine months ended September 30, 2025, relates to the $14.0 million loss recorded upon the exercise of the 2024 RDO and 2024 PIPE Warrants (the “2024 Warrants”) and issuance of the warrants in 2025 (the “2025 Warrants”) in connection with the warrant exercise agreements entered into on February 5, 2025. During the nine months ended September 30, 2025, there was loss related to a mark-to-market adjustment of $59.9M adjustment for the debt to equity conversions during the period. There was a loss related to the fair market value adjustment on the 2025 warrants and the private warrants of $1.4 million. Additionally, there was a loss of $28.6 million and $2.3 million fair market value adjustments of the 2026 and 2029 Notes Conversion Options, respectively during the nine months ended September 30, 2025.
The increase in fair value of derivatives during the nine months ended September 30, 2024, relates to the $42.3 million loss recorded upon the exercise of the 2023 RDO and 2023 PIPE Warrants (collectively, the “2023 Warrants”) and issuance of the warrants in 2024 (the “2024 Warrants”) in connection with the warrant exercise agreements entered into on February 27, 2024 and March 4, 2024. This loss is net of a $10.6 million gain related to the issuance of the 2024 Warrants and was further offset by a reduction of $27.4 million upon remeasurement of the 2024 Warrants and IPO Warrants’ fair value during the nine months ended September 30, 2024. The decrease in fair value of derivatives during the three months ended September 30, 2024 relates to remeasurement of the 2024 Warrants and IPO Warrants’ fair value. |
(3) | During the three and nine months ended September 30, 2025 and September 30, 2024, the Company incurred employee separation costs associated with a strategic review of the Company’s capacity and future projections to better align the organization and cost structure and improve the affordability of its products and services. |
(4) | Non-recurring professional fees incurred in connection with discrete, non-recurring strategic initiatives, including business transformation and strategy realignment consulting services which management does not consider part of the Company’s ongoing operating expenses. |
(5) | Non-recurring litigation consists primarily of legal settlements and related fees for specific proceedings that we have determined arise outside of the ordinary course of business based on the following considerations which we assess regularly: (1) the frequency of similar cases that have been brought to date, or are expected to be brought within two years; (2) the complexity of the case; (3) the nature of the remedy(ies) sought, including the size of any monetary damages sought; (4) offensive versus defensive posture of us; (5) the counterparty involved; and (6) our overall litigation strategy. |
(6) | Transaction expenses during the nine months ended March 31, 2024 consist primarily of diligence, legal and other related expenses incurred associated with the Pangiam acquisition. |
(7) | Non-recurring internal integration costs related to the Pangiam acquisition. |
(8) | During the three months ended March 31, 2024, the Company recognized a non-cash goodwill impairment charge primarily driven by a decrease in share price during the quarter compared to the share price of the equity issued as consideration for the purchase of Pangiam. During the six months ended June 30, 2025, the company recognized a non-cash goodwill impairment charge of $70.6 million, primarily driven by a change in forecast during the second quarter of 2025. |
(9) | Loss on extinguishment of debt is related to voluntary conversions of the 2029 Notes to common stock and the related extinguishment of unamortized debt discount and debt costs. |
*EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are non-GAAP financial measures. See the “Non-GAAP Financial Measures” section in this press release for additional information and reconciliations. | |
Adjusted EBITDA* Reconciliation for the Third Quarter Ended
| |||||||||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||
$ in thousands |
| 2025 |
|
|
| 2024 |
|
|
| 2025 |
|
|
| 2024 |
|
Revenue | $ | 33,143 |
|
| $ | 41,505 |
|
| $ | 100,372 |
|
| $ | 114,409 |
|
|
|
|
|
|
|
|
| ||||||||
Net income (loss) |
| 2,521 |
|
|
| (15,135 | ) |
|
| (288,084 | ) |
|
| (157,366 | ) |
Interest expense |
| 4,604 |
|
|
| 6,552 |
|
|
| 14,139 |
|
|
| 19,389 |
|
Interest income |
| (4,306 | ) |
|
| (635 | ) |
|
| (6,566 | ) |
|
| (1,807 | ) |
Income tax expense |
| 17 |
|
|
| 21 |
|
|
| 56 |
|
|
| 22 |
|
Depreciation and amortization |
| 4,127 |
|
|
| 3,394 |
|
|
| 11,048 |
|
|
| 8,740 |
|
EBITDA* | $ | 6,963 |
|
| $ | (5,803 | ) |
| $ | (269,407 | ) |
| $ | (131,022 | ) |
|
|
|
|
|
|
|
| ||||||||
Adjustments: |
|
|
|
|
|
|
| ||||||||
Equity-based compensation |
| 5,321 |
|
|
| 5,168 |
|
|
| 17,040 |
|
|
| 16,074 |
|
Employer payroll taxes related to equity-based compensation(1) |
| 260 |
|
|
| 29 |
|
|
| 1,886 |
|
|
| 741 |
|
Net (decrease) increase in fair value of derivatives(2) |
| (26,125 | ) |
|
| (1,330 | ) |
|
| 142,962 |
|
|
| 14,396 |
|
Restructuring charges(3) |
| 660 |
|
|
| — |
|
|
| 4,257 |
|
|
| 1,317 |
|
Non-recurring strategic initiatives(4) |
| 3,520 |
|
|
| 1,568 |
|
|
| 5,131 |
|
|
| 4,942 |
|
Non-recurring litigation(5) |
| — |
|
|
| 574 |
|
|
| 30 |
|
|
| 1,119 |
|
Transaction expenses(6) |
| — |
|
|
| — |
|
|
| — |
|
|
| 1,450 |
|
Non-recurring integration costs(7) |
| — |
|
|
| 742 |
|
|
| — |
|
|
| 1,625 |
|
Goodwill impairment(8) |
| — |
|
|
| — |
|
|
| 70,636 |
|
|
| 85,000 |
|
Loss on extinguishment of debt(9) |
| — |
|
|
| — |
|
|
| 2,577 |
|
|
| — |
|
Adjusted EBITDA* | $ | (9,401 | ) |
| $ | 948 |
|
| $ | (24,888 | ) |
| $ | (4,358 | ) |
Gross Margin |
| 22.4 | % |
|
| 25.9 | % |
|
| 22.8 | % |
|
| 25.2 | % |
Net Loss Margin |
| 7.6 | % |
|
| (36.5 | )% |
|
| (287.0 | )% |
|
| (137.5 | )% |
Adjusted EBITDA* Margin |
| (28.4 | )% |
|
| 2.3 | % |
|
| (24.8 | )% |
|
| (3.8 | )% |
(1) | Includes employer payroll taxes due upon the vesting of equity awards granted to employees. |
(2) | The change in fair value of derivatives during the three months ended September 30, 2025 relates to the remeasurement of the 2025 warrants, IPO warrants and the 2026 and 2029 Notes Conversion Options derivative liabilities. The change during the nine months ended September 30, 2025, relates to the $14.0 million loss recorded upon the exercise of the 2024 RDO and 2024 PIPE Warrants (the “2024 Warrants”) and issuance of the warrants in 2025 (the “2025 Warrants”) in connection with the warrant exercise agreements entered into on February 5, 2025. During the nine months ended September 30, 2025, there was loss related to a mark-to-market adjustment of $59.9M adjustment for the debt to equity conversions during the period. There was a loss related to the fair market value adjustment on the 2025 warrants and the private warrants of $1.4 million. Additionally, there was a loss of $28.6 million and $2.3 million fair market value adjustments of the 2026 and 2029 Notes Conversion Options, respectively during the nine months ended September 30, 2025.
The increase in fair value of derivatives during the nine months ended September 30, 2024, relates to the $42.3 million loss recorded upon the exercise of the 2023 RDO and 2023 PIPE Warrants (collectively, the “2023 Warrants”) and issuance of the warrants in 2024 (the “2024 Warrants”) in connection with the warrant exercise agreements entered into on February 27, 2024 and March 4, 2024. This loss is net of a $10.6 million gain related to the issuance of the 2024 Warrants and was further offset by a reduction of $27.4 million upon remeasurement of the 2024 Warrants and IPO Warrants’ fair value during the nine months ended September 30, 2024. The decrease in fair value of derivatives during the three months ended September 30, 2024 relates to remeasurement of the 2024 Warrants and IPO Warrants’ fair value. |
(3) | During the three and nine months ended September 30, 2025 and September 30, 2024, the Company incurred employee separation costs associated with a strategic review of the Company’s capacity and future projections to better align the organization and cost structure and improve the affordability of its products and services. |
(4) | Non-recurring professional fees incurred in connection with discrete, non-recurring strategic initiatives, including business transformation and strategy realignment consulting services which management does not consider part of the Company’s ongoing operating expenses. |
(5) | Non-recurring litigation consists primarily of legal settlements and related fees for specific proceedings that we have determined arise outside of the ordinary course of business based on the following considerations which we assess regularly: (1) the frequency of similar cases that have been brought to date, or are expected to be brought within two years; (2) the complexity of the case; (3) the nature of the remedy(ies) sought, including the size of any monetary damages sought; (4) offensive versus defensive posture of us; (5) the counterparty involved; and (6) our overall litigation strategy. |
(6) | Transaction expenses during the nine months ended March 31, 2024 consist primarily of diligence, legal and other related expenses incurred associated with the Pangiam acquisition. |
(7) | Non-recurring internal integration costs related to the Pangiam acquisition. |
(8) | During the three months ended March 31, 2024, the Company recognized a non-cash goodwill impairment charge primarily driven by a decrease in share price during the quarter compared to the share price of the equity issued as consideration for the purchase of Pangiam. During the six months ended June 30, 2025, the company recognized a non-cash goodwill impairment charge of $70.6 million, primarily driven by a change in forecast during the second quarter of 2025. |
(9) | Loss on extinguishment of debt is related to voluntary conversions of the 2029 Notes to common stock and the related extinguishment of unamortized debt discount and debt costs. |
*EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are non-GAAP financial measures. See the “Non-GAAP Financial Measures” section in this press release for additional information and reconciliations. | |
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