Good afternoon, and thank you for joining us. I'm excited to speak with all of you during such a dynamic and pivotal time in our market and for BigBear.ai. This afternoon, I will share some key developments over the last quarter in our market outlook, operations, and strategy, and Sean will recap our financial results for the quarter. We're operating in a world that's rapidly increasing investment in our core capabilities, national and border security, AI, autonomy, tech-enabled travel and trade, transportation, and logistics. These are not just policy priorities; they are global imperatives. In the three months since our last earnings call, we have seen landmark developments resulting in powerful market tailwinds in each of these areas. Most significantly, the passage of the One Big Beautiful Bill will bring a generational investment in areas where BigBear.ai has core capabilities, innovative products, and market-leading performance. The One Big Beautiful Bill or OB3, as we're calling it, provides $170 billion in supplemental funding to the Department of Homeland Security and $150 billion to the Department of Defense for disruptive defense technology as well as billions more across shipbuilding and other critical national security missions that we support. This is not incremental funding for innovation; this is a transformative level of investment, and as a mission-ready AI company with a national and border security focus, it's directly in our lane. We anticipated these developments, if not their scale, and have made key bets in recent years that we are now positioned to capitalize on. BigBear.ai has been proving we are a leading provider of capabilities called for in this legislation, both in the U.S. and across the globe. For example, BigBear.ai has deployed world-class biometric solutions for traveler processing on more than 2,000 devices at over 500 gates and 25 airports. These deployments include providing biometric exit solutions and recently pioneering a new biometrically enabled enhanced passenger processing solution alongside partner airports and in support of U.S. Customs and Border Protection. We're also demonstrating progress with our technology that supports defense autonomy, including ConductorOS for DoD's drones forming development efforts. Our supply chain management solutions, including Shipyard AI, are helping transform the industrial base for America and our allies, and we're partnering internationally with organizations like an international holding company in the United Arab Emirates and Narval Holdings in Panama in multiple sectors, such as port security and supply chain logistics, expanding our global relevance and impact. Importantly, we've done this while building a robust balance sheet and the capital necessary to take advantage of the unprecedented growth opportunities in this market. In our release today, we highlight the strongest ever balance sheet in the history of BigBear.ai, with over $390 million in cash to support aggressive new growth initiatives. We intend to deploy capital with urgency, rigor, and discipline to grow our top line both organically and inorganically through targeted M&A. We are excited to discuss all of this with you today in detail. But first, I want to address our second quarter performance and our outlook for the rest of the year. In our first quarter earnings call, we talked about the potential for disruptions in federal contracts from efficiency efforts. We have seen those disruptions this quarter, most notably in programs that support the United States Army. As they seek to consolidate and modernize their data architecture, we have adjusted our full-year guidance this quarter to reflect such disruptions. That said, BigBear.ai will support the Army strategy to capitalize on their investment in a new data platform while continuing to support the development of critical capabilities for the warfighter on their new architecture going forward, including competing for the new global force information management contract with our unique expertise in Army Data Systems. Despite these challenges with Army contracts, we are not going to sit back and lick our wounds. We're going to compete to win this work again. More broadly, we welcome this type of disruption to streamline data layers and allow for software to address mission use cases to be delivered more quickly. We intend to capitalize on this type of changing focus on government technology investment and the suite of new acquisition methodology with a larger and better focused pipeline, targeted where the resources are going and bringing mature products and technology assets to Bear, in addition to our talented and mission-focused development teams. Coming into the role of CEO earlier this year, it was clear to me that our pipeline was narrow and relied on a few large contracts. We have taken steps this year to deepen and broaden that pipeline with additional customers, more prime contract targets, larger opportunities, and expansion into new markets, including international. It will take time to mature, but we are on the right track. And with the historic funding levels announced in recent weeks, directly focused in areas where we have leading capabilities and a reputation for innovation, we are confident that our midterm outlook remains strong. Further, one of my first priorities as I stepped into my role as CEO was to increase the level of rigor in our forecasting process and transparency in our communication to the market. In partnership with Sean, in his new role, I believe that we are achieving the right balance of optimism while also being mindful of risk that we cannot control. We are building this business for the long term, not focusing myopically on prior contract models. We see the opportunity to build a market-leading business that can transform mission areas and industries, and we are firmly placing our focus on those future growth prospects. Our new guidance range will give us the flexibility to invest in an aggressive but disciplined way over the rest of this year and smartly deploy capital to accelerate the major growth inflection that will drive material long-term shareholder value in the quarters to come. This quarter is not about taking a step back; it's about setting up for an aggressive step forward. We are going on offense in a big way and going after a much bigger game. Let's talk in more detail about the exciting emerging environment that we're operating in because it's never looked more promising. This quarter, the U.S. and allies have committed to unprecedented partnerships in AI such as the acceleration of a $1.4 trillion AI investment with the United Arab Emirates. This type of international partnership is indicative of the rapid push for adoption of mission enhancing AI tools across the security and critical infrastructure sectors. We are excited to be partnering with leading Emirati companies to deliver our AI products in the region and beyond. In the U.S., OB3 includes $170 billion in supplemental funding for DHS over the next four years. $70 billion of that is earmarked for CBP, with $6.2 billion allocated specifically to border technology and $673 million to biometric exit—worth pausing on the magnitude of these funding enhancements. When I led CBP, we had a $16 billion budget, one of the largest for any law enforcement agency globally. Now CBP has four times that amount in incremental funding on top of their existing base, largely to acquire technology solutions to support operations over the next four years. For DoD, OB3 includes $16 billion military AI autonomy funds to scale swarming unmanned aerial systems, which aligns directly with our investments in ConductorOS and autonomy enablement. Moreover, $29 billion for domestic shipbuilding supports areas where we've already demonstrated value with platforms like Shipyard AI. All of this is underpinned by a surge in AI adoption. In our core markets—security, travel and logistics, defense, and intelligence—AI deployment is no longer an experiment; it's becoming a global standard. Industry reports indicate that U.S. investments in AI are projected to surge by 44% year-over-year, and federal procurement for AI/ML-enabled mission systems is estimated to be growing by approximately 10% to 15% year-over-year. These are generational investments in areas with a direct line of sight to growth for BigBear.ai in markets where we are already a leader. On that note, our efforts over the last quarter reinforce our positioning in these markets, our product innovation, and our operational performance. In borders, travel, and trade, our biometric solution, veriScan, has become a market standard for enhanced passenger processing, which enables smooth and secure traveler processing upon entry into the United States. Over the last quarter, we expanded deployments across 12 airports and seaports in North America. We are rapidly scaling to meet demand, and combined with our established and growing deployment of biometric exit, BigBear.ai has emerged as a market leader in this category. We are also preparing to build upon our existing work at DHS and compete for the opportunity to support multiple critical IT systems at CBP, where the agency is pursuing several acquisitions to upgrade critical systems supporting border security, passenger and cargo processing, and risk assessment. Several of these procurements have been accelerated and are scheduled to come to fruition over the next four to six quarters. For our Defense and Intelligence customers, our autonomous command and control enablement software, ConductorOS, performed exceptionally at the recent Talisman Sabre exercise, supporting operations with real-time AI model deployment, enhancing battlefield decision-making and asset coordination. We also recently secured a contract in partnership with Hardy Dynamics under the DoD Joint Program Executive Office for armaments and ammunition to work on drone swarm lethality, another proof point of our strong positioning to play a critical role in the next generation of distributed autonomy. For our supply chain, logistics, and manufacturing business, our Shipyard AI capability has already proven itself with new funding allocated to shipbuilding and infrastructure as part of OB3, and we're poised to scale these offerings. Regarding our international expansion, we are deepening relationships that matter. We signed a transformative partnership with leading companies in the UAE under the IHC umbrella this quarter, focused on accelerating the development and adoption of AI across several domains and applications. Additionally, we launched a cargo security management solution in partnership with Narval Holdings in Panama, opening the door to broader regional expansion and partnerships with global shipping lines. We are proving that we can win in the markets that will be most critical in the next chapter. As we move forward, we have a strong and talented team to take us to the next level. A prime example of that is our Interim CFO, Sean Ricker, joining us today for his first quarterly earnings call in his new role. Sean has been with BigBear.ai from the start of the company's journey in the public markets and most recently served as our Chief Accounting Officer. Sean knows the business inside and out, and he is an outstanding financial professional with a deep appreciation for our customers and their missions. With that, I'll turn it over to Sean to share some more about his background and discuss our financial results for the quarter.
Thank you, Kevin. It's a privilege to be joining today's call in my new capacity as CFO. As Kevin mentioned, I've been with BigBear since the beginning. This is such an exciting time to see the speed and scale of AI development in the world and how that reverberates through the technology we deploy and the customers we serve each and every day. What I can also say is that across the four-plus years that I've been with the company, we have never been in a better liquidity position than where we stand today. Kevin, myself, and our Board are all aligned on going on offense and doing so in a significant way. The proceeds we raised this quarter, which I'll discuss in more detail shortly, open up a world of new possibilities that were previously out of reach. On that note, let's start with our balance sheet. This quarter, we have continued to make sequential improvements to our balance sheet in terms of our liquidity and net debt position. We're proud to announce that as of the end of the second quarter, we have $391 million of cash, an all-time record. And as you'll see in our earnings presentation, we ended the quarter with a net positive cash position of almost $250 million, another record, and the first time in BigBear's history where our total cash exceeds our total debt. Our second quarter cash balance, an increase of $341 million from where we ended 2024, provides us with the capital we need to execute on the vast array of opportunities we have ahead of us, both organically and inorganically. During the second quarter, through our at-the-market facilities, we raised gross proceeds of approximately $293 million in exchange for the sale of roughly 75 million shares of our common stock. This equates to an average gross selling price of $3.90 per share, which is about 370 basis points higher than the average daily closing price of our stock during those days that we were in the market. This demonstrates that not only did we raise significant proceeds, but also executed at strong prices. Our access to the capital markets through these ATM facilities demonstrates our ability to raise a meaningful amount of capital quickly and at relatively low cost compared to other alternatives for companies of our size. From a macro perspective, the proceeds from these ATM facilities will be the foundational fuel to the offensive strategy we've outlined here today. Now let's turn to our operating results for the quarter. Second quarter revenue was $32.5 million, a decrease of $7.3 million year-over-year, which was primarily driven by the Army programs that Kevin previously discussed. Gross margins decreased slightly year-over-year. Gross margin for the second quarter of 2025 was 25% versus 27.8% for the comparable period. SG&A expenses decreased from $23.4 million in the second quarter of 2024 to $21.5 million in the second quarter of 2025. Our net loss for the second quarter was $228.6 million, driven by changes in the fair value of derivatives of about $136 million, primarily associated with the quarterly remeasurement of the convertible features of our convertible notes. We also recorded a goodwill impairment charge of about $71 million this quarter, which was partially driven by our reduced guidance range for 2025. Both of these are non-cash items and excluded from our measurement of adjusted EBITDA. Adjusted EBITDA for the second quarter was negative $8.5 million versus negative $3.7 million in the comparable period. The decrease in adjusted EBITDA was primarily driven by lower gross profit due to lower revenue volume as well as higher R&D expenses. As Kevin already mentioned in his remarks, while we see significant opportunities in our portfolio long term, recent near-term impacts on certain large programs and government contracting timing risks have impacted our revenue outlook for the rest of this year. We see tremendous growth opportunities ahead of us from expanding our existing portfolio to meet the demands of OB3 and global AI adoption as well as opportunities to accelerate through inorganic growth. In order to capitalize on these opportunities, we plan to make meaningful investments for the duration of this year to pursue these in earnest. As a result of the reduction in our revenue outlook, coupled with our expected increased investment spend profile for the second half of this year, we are withdrawing our adjusted EBITDA guidance at this time. For the full year 2025, we are now projecting revenue between $125 million and $140 million.
Thanks, Sean. As mentioned, our balance sheet strength and cash position specifically puts us in a position to dramatically increase our rate of market capture and capitalize on these unprecedented tailwinds with conviction and agility. Our strategy is clear: go on offense, both by investing in our capability to pursue organic growth with our AI technology products and government solutions and through targeted acquisitions. On organic growth, we're investing to supercharge our growth engine, specifically around capture campaigns pertaining to OB3 in the private sector security technology market. We will also be expanding our investment in marketing. Given the extent of the value that we could provide potential customers at this moment, we believe that broad awareness is critical, and we have the resources to support a much greater presence. Regarding talent, we're attracting and retaining top-tier talent in both the tech and national security communities. As we expand into this new chapter, we will be bringing on senior advisers and operators that can further support our business and scaling to the next level. Concerning innovation, our AI innovation agenda is advancing quickly, and we are focusing on both our core existing capabilities and additional frontier innovation, including physical AI and Internet of Things integration, and agentic systems that will operate in the real world to drive security and efficiency at scale. As for partnerships, we are deepening ties with strategic partners domestically and internationally to ensure our capabilities integrate seamlessly into the ecosystems that matter most and that we have distribution access that extends globally. Lastly, on M&A, we are actively pursuing strategic transformational acquisitions. We are looking at targets that will accelerate scale, unlock new markets, and add step functions in AI capability. Let me close by bringing it all together. While we have experienced some contract disruption that has negatively impacted our financial results, this quarter should not be defined by it. Instead, the opportunities we have in this moment are defined by powerful market tailwinds, significant progress in the business and our technology, and a strong financial posture going forward to take rapid advantage of the climate that we're operating in. We are in the right markets with the right platforms, and we are proving that in the field. We intend to gain market share, win new customers, establish new partnerships, and secure our place at the center of AI transformation in national and border security, transportation and mobility, and critical infrastructure. We have the cash to invest, the conviction to advance, and we're building the team to execute. Thank you to our BigBear.ai team and our shareholders for your continued support. I look forward to speaking with all of you next quarter to update you on our progress.
