BigBear.ai (BBAI) 13 Mar 232022 Q4 Earnings call transcript

Thank you for joining the BigBear.ai Fourth Quarter and Full Year 2022 Conference Call. This call is being recorded. [Operator Instructions] I will now turn the call over to Shane Karp, Vice-President Marketing and Communications. Please go ahead, Mr. Karp.

welcome Conference XXXX Call. and Full Quarter everyone, Earnings Year afternoon, to Fourth BigBear.ai's and Good I’m Executive Peffer, Officer. Officer; by and joined Mandy Julie our Long, Chief our Chief Financial

events Listeners These may on discussed reliance to forward-looking during may made update statements call. disclaims certain are we differ the from risks this put cause Many specifically the today, expectations BigBear.ai obligation statements call not to call. the forward-looking could During and the as be statements. are current on any on are actual the and and forward-looking a statements cautioned undue that make factors to based forward-looking uncertainties. assumptions, subject materially and result, to statements

to issued statements press more the earnings and of today the forward-looking For these please about information release section SEC risks our filings. and refer uncertainties,

together will the discuss should not considered during a We replacement measures call today. read GAAP non-GAAP measures and should some non-GAAP financial be with also for results. financial These be

You GAAP and within reconciliations can find release. the our earnings non-GAAP

turn like Mandy. I'd over to the Now call to

call. Shane. today's all bolster and significant fundamentals long-term for to And you the fourth growth. our set the financial stage for and thank took steps we joining outlook our you, XXXX quarter, Thank achieved In

technology the decisions. XXXX most be clearer how And much things I six and for previous than baseline As assessment that happening comprehensive now. world's very serve. tough the a We've applied months the recurring to forward cleaned the as foundational in into in some have operating understanding in a to in role are of markets we reducing healthier. calls, the discussed Less critical structure take a fund my clarity in now we of for complex right can CEO, completed support and our liquidity We we to that to up us, our expenses world as continued have strive material challenging market year are our deliver they we position. company steps our and portfolio. capabilities, our operating see as a improving

in and the the intelligence. around gives to form, a scalable great of were at BigBear’s recognizing and Key and are innovation decision field continuing necessity unprecedented support. delivering of AI excitement We powered our wave production an serve higher in leaders of heritage solution. and capabilities of provide. across of are decision adapt industry foster adoption capabilities we advantage scale decades intelligence decision artificial markets. we We're competitive midst governments our us a makers our in this an interest to a extend in explosion what seeing And to pipeline long reliable,

We anticipate on continue investment global delivering will will complex government systems continue grow. chains to and focus autonomous the markets; in logistics, solutions three and cyber. supply solutions We AI in to core

in In aggressively November stated XXXX, would technology defense fill of government gaps the to and its AI seek specialization. Department continue which strategy, that invest U.S. in Defense to its national released AI the

XXXX amount research AI in spending of threats. funding just protect the bill our last And security President XXXX, record from allotting boosted forward to spending and a recommending December National $XXX billion cyber week, In passed sophisticated solutions which put U.S. nation national was development. increasingly budget for on Defense $XXX Biden and over our proposal, included his to defense billion

play that dynamics and the for are at of millions There company global production scale. AI these not up to provides organization will adoption all for catalyst. intelligence view an environments orchestra the grade achieve that a high of true market be a we’ll as augmented models to step needs us might we stakes will single decision BigBear.ai, of an how in happen role positioned uniquely unfolding At be opportunity be in there models, to and a

In other be will will conductor. the is play, words, that we That orchestra need we conductor. the role a will this

partner have multiple as see $XXX We IDIQ and we task critical agencies of opportunity trusted award XXXX, selections we a these examples XX-year deepen the will been the government this Air million vehicle, to Throughout compete to such for Force have orders. contract relationships where and decades. for

government the as compete have work. and the and we more an have for of integration to at established With contracting a our prime capabilities legacy table seat space the companies, a in contractor substantial innovative defense

our system force where senior equip, into are work, by transitioning our commanders our empowering and solution legacy complex holistic logistics a the global in leaders XX users. man global time through showcasing to are and provide real supply combatant ready chains army resource data single more solutions for GFIM. Management, strengths X to We Information Phase and or XXX,XXX train, effectively

million X phase on during be it was deliver award into second efforts award a prototype from and significant phase what million a This successful fee work viable in $X supposed to that is for builds to a $XX.X product. minimum our prototype accelerated a X,

sole us as X position deliver phase a the prime naming in timeline program the Additionally, this strong award to the receive critical award. to the X contractor capability while production phase accelerates BigBear and puts

digital forward in our We supports look the threat vessels. intelligence integrate are maritime to our unmanned efforts East. and showcasing exercise situational largest continuing capabilities the XX, systems to technologies through surface horizon We AI the in our event to at Middle series, IMX demonstrate in participation autonomous awareness Navy's the expertise in which

X a and sets act ML broader experience to the at predictive use sense, a events to analytics relevance. effort [ph] Our AI, tackle us through sense of make Defense the dollar be speed these partner lessons and up to premier better with and multibillion their of Department strategy, they learned Debt as

are We cyber also solutions sectors. providing across

minor program an Wire DARPA. suite phased in communications Our spacecraft satellite with the development to by Red partnership of effort is a of cybersecurity advanced sponsored solutions delivering

and increasingly of heavy Our the specialized reverse to look capabilities our environment insights complex engineering threat provide cybersecurity. they to critical as manage customers

and build making are And we manufacturing, continuing significant the our industries. shipbuilding are progress. to We pipeline shipping complex and

modeling forecasting real equipment systems, requirements simulation and process clarity Our situations. massive simulating manage and and companies personnel delivering on physical and and environments, complex help solutions information facility, world

focus in us The of and discussed the and was continued we environment. back the our our in benefit macro full despite fourth and quarter. initiatives was have the restructuring two a we first of began EBITDA Another on savings quarter quarter on implementing cost to half to third calls implementation revenue pleased target for last challenging XXXX are from the our our delivered adjusted area

to actions We improve overhead financial spend continued reduction our our and in QX our QX cost steps additional XX reduce taking and position.

XXXX. million a bolstering market, for and our liquidity of very $XX with quarter balance challenging in sufficient closed to in Additionally, a private the placement strategy first we our sheet on us XXXX, execute in providing

solid quarters are the We to keep opportunities as will position an portfolio eye a continue towards coming open to well. grow in and organically in and our

a turn to Julie for financials. review the will I our that, call With detailed of

Thank you Mandy.

to increase same million turn was which fourth our or let's XX% quarter, primarily our million $XX.X to quarter XX%, to in and the $X.X by quarter of in $XX.X driven for compared at of million, growth, Now full quarter XXXX. analytics fourth the XXXX, $XX.X year million Revenue period in an segment results. the was compared year-over-year

through for wins U.S. was including Mandy X with in in driven earlier. phase force to This the in segment growth the compared key the program $XX.X program our that award QX by XXXX, Revenue walked Army C&E quarter, global $XX.X or information XXXX. the was million in million GPM management

by XX% we was versus revenue, of the in year XXXX. margin increase XX% growth with the $XXX analytics full an target X% year-over-year For our guidance The achieved in from segment. gross XXXX, growth in our driven revenue million QX representing quarter,

margin Turning C&E includes commercial trend segments. margins, we margin We will XXXX, to compared outpace to segment our to XX% was QX XXXX. The adjusted in segment continuing segment margins adjusted in to in higher going see anticipate that gross our segment, analytics contribute business increasing are forward. QX XX% which adjusted our growth this gross

that Segment adjusted margin QX C&E investments margin in adjusted driven XXXX, compared QX was adjusted period. were a higher margin by to gross higher QX segment XXXX, driven resulting year-to-date of in true for XX% quarter rate XX% in a XXXX, and recorded in that that fourth was margin up primarily executing to prior follow typical gross than on in was for by winning onetime Analytics in adjustment successful awards. XXXX, Segment XX% fringe compared XX% in

million, was million year third as performance quarter. QX of backlog. a $XXX into is expired or end, $XX driven at revenue of Backlog converting turning XX% in to $XX to period compared as couple contracts that well which by largely contract down This quarter. the Now the million of was

of not their those the contractual For limits. material to types did customer spin contracts,

of any our remaining So completed. was performance was funds period backlog for the reduced when

the contract funds. the customers simply and extend with continue we end option to into roll contracts to cases, these years option most next of to these the recapture on year at their work these we In

impacted contract when backlog this role. was we In funding by associated government subcontractor but does switched to the with This impacts in receive the work, not type contract the addition, impact vehicle change from a prime. where one revenue we

reminder, backlog it and also more of we backlog. not quarters, take our that as unexercised comparing a to conservative made awards, include follow a does when a on updated approach methodology anticipated to backlog As prior measuring change unpriced in related our in estimates

of charge. a million $XX.X million expenses of action our and million, cost $X.X represents $XX.X QX from expenses million, SG&A million goodwill of to million and SG&A in QX, initiating expenses or turning for reduction reduction non-cash expenses expenses, $XX.X operating Now or XX% were to This R&D total. $XX.X impairment in the prior plan. $XX.X R&D operating QX expenses included excluding

benefit stock-based periods, Excluding of still integration of by quarter QX the spending back a half the of full in decrease reflect a compared driven cost implemented non-recurring year. the in QX, impact to savings XX% in expense both compensation we expenses initiatives and

to quarters efficiency to efficiently While our we scalable have the be we XXXX implementing quarter grow the across and actions of management of and we in believe took forward we driving fourth processes, be on continue expense positioned us disciplined will as will and rigor focused XXXX and the going operate third our business. operating first in we overall

million we quarter non-cash ways year of and merger of in by on analytics million stock was fourth when loss of Net based ahead, versus we segment. last impairment XXXX payments. also our impacted related of transaction. million $XX.X had $XX.X a $XXX.X to focused in Looking net the efficiency million charge goodwill the compensation the of QX of in loss in The timeliness processes improve to $XX.X are quarter expense contracting was

concluded results including goodwill to current growth relative of fourth for XXXX, to goodwill macroeconomic quarter financial our anticipated quarter segment in due fourth our reviewed factors, we while rate. we several We analytic improved previously saw headwinds, impairment was and in that this the quarter, impaired and

adjusted to loss million in compared Adjusted million of in and second EBITDA EBITDA the of a million was QX quarter, loss $X.X in $X.X the third $X.X quarter.

EBITDA adjusted now total for half year, foundational we second $XX.X Our million first second in XXXX. have million XXXX compared of of the profitable we baseline half loss of was cost for actions the With saving our half to growth. $X.X in a future the the the forecasted, as

our with less in the sheet, million QX, operational $X cash review of as fourth The third executed of we In significantly we quarters approximately burn than million the equivalents remaining operational cash quarter, Of and payments. interest of beginning the usage of end balance in cost of million a the $X $XX.X biannual initiatives quarter. cash was the $X million. result at had cash the previous

$XX steps took provides strategy. to to a placement our XXXX million execute we January, with address liquidity us private liquidity with sufficient In which

much to Following of we in early expect structure burn to we actions XXXX and cash trend right in continue the a XXXX. size, lower cost XXXX, toward the operational half our took second the

for the We payments, excludes of severance cash on in and flow force. costs with transaction which non-recurring positive operational stock, and items, are including tax a focused payments fees, reduction achieving XXXX, associated non-operational in second vesting half interest

we control. finally, I weakness And the described related IT to to our of internal context wanted in release additional material provide our that earnings

have controls. consolidated control and our our financial internal our internal in material controls IT statements, have processes, any a statements, that in of material gaps we identified a errors our resulted our in discovered financial review a results Following related not in financial aggregate completed or weakness and thorough in

We activities. and enhancing including of are implementing monitoring additional the general controls, increased segregation duties, addressing and oversight issues, IT,

comprehensive a coordination in to the with year. this auditor, expect remediation work remediation are completed We be and our implementing plan

of Turning XXXX $XXX to expecting the to million. be we range $XXX to Outlook, revenues are in million

EBITDA negative are in We projecting single digit millions XXXX. for adjusted

our We impact which on have several award contract our FY significant and expected significant a timing size given in could have pipeline, revenue. awards XXXX of their

remarks, opening in it's said Mandy dominance that as clear the continue AI her will Additionally, in race for XXXX.

will that certain our accelerating in to have believe we make we in success industry our be AI. investments strategy an As catalysts leader we as will execute year, undoubtedly this

and to Looking ahead, cost remain managing we efficiency. areas on disciplined focused on drive operational

our quarter sustainable of anticipate drive investments burn cash position, growth. in cost near Following initiative, fourth half make in we improving efficiently liquidity lower of particularly the we our will substantially we to term as XXXX the XXXX. reduction second targeted saw After

gross analytics We higher are demand market as shift in well margin mix deliver and go increasing business our federal for continued of revenue up our to driven steady favor margins commercial offerings a ramp increasing and positioned in well to in growth markets, efforts, as segment. by in

before Q&A. turn we turn final to I'll it for to over remarks Mandy

evolving that work and pattern that That the Thank we done you, BigBear.ai opportunities see I we begin the deliver here. the have commitments to you always our to the and am on proud Julie. market will discussed. capitalize is on of team

We will and going what capable know we we are of. will it. we then say do, We are to what do

We clarity work aren't and the learn BigBear.ai and deliver world's most afraid complex stability we the about very be hard for of long and game. will XXXX decisions. see We're for the an to growth year important we as ahead. year excited fast

we're Operator, questions. you. Thank for ready

we Thank from And be session. William a [Operator DiPalma proceed with our this of Instructions] first time, question. comes will your question you. Louie Please Blair. the At question-and-answer with line conducting

Mandy evening. and Julie. Good

Hi, Louie.

deal AI has Can and with use of from excitement of you differ Thanks. of how tensor this, for your a completion think also recent been how hi the innovation. associated ChatGPT provide on Hi, as contracts there. part solutions? related for will excitement ChatGPT impact And BigBear.ai the long-term overview of great your its we AI may solutions quick and into solution? in to There a your or AI developments ChatGPT over about should translate general investor

I about. Thank It think, one you, many incredibly is that Louie an wonder question. fair And

So ChatGPT models, LMs, language which coverage and existed I of very as for a actually BigBear a been of on that's off long there's has lot a think a time, large within been first think do. I whole is applied. derived very, right is is right, that lot a access large instance we've time of on training a and companies the LMs, a exist spectrum degree uses seen particular that of But such data. democratization consumer the facing this of to is capabilities capability

of kind forward. of terms that in Now, pulls how

working know us, machine has BigBear methodologies of variety meet we of needs. about a that than days think even is I of have the decades For now, important more to wide leverage tools customer learning. couple to we what's training learning as a in of and experience And deep early in progressed,

of to the into each predictive that I different to mentioned it's use terms skill require that it's tensor, that, in you sometimes right, note the of tap right. them. we in intelligence, things, vision, accomplish those And types of may sets work the your artificial have But whether we do would analytics, point, whether we tools or that what computer underlying

the AI tool. a big thing it a compute. into of say in way that years is I that a is tool, always tap it even because it we be limitations about couldn't can think ago, around really five general spectacular And in applied is that, the I

an to around in job our quite right been problem. It link provider, solution customer right the a working like a of does going end job. that as for while a the lean weak at we're pretty spectacular as technology And correlation. things into solve tensor, provider, the as is as example. we've a and to tools the use day, a But to And

our the about gets to commercial and us and deployed some are federal of the datasets. the us in both as So interest that what solutions artificial forward apart the we as as do we excited is And amount in as government application we're new What's federal with the an as well use well of conversations, unbelievable seeing that intelligence sector. future XXXX, table. are look not into beyond we sector that those in the of dirty unquestionably putting

for And talked have types long very production this tools examples doing the been I We've that lot a time. of just of a we of about.

at on question, expect, associated promise, when look it's keep to And Louie? pipeline, we go. go do what as and right, where And so a right, with of us I we're then right, did, that headed. your I lot our would answer and see really sharing it we Does execute, we

just and talking production RX like? is last with since in progressed platforms And you how customers. some traction And of Med last Yes, were examples. look platform your quarter have And adoption? what terms And were you quarter, definitely. flow hospital model I'm discussed been Mandy. you that wondering future about the how gaining pipeline has Thanks, customer

kind situated seen, tools of we incredibly are And particular associated the of does do Clorox our flow to So and the time don't terms I [Ph] the in solutions And of want help out optics, be volume long get it's world able continues. right include of to and there happening in great shortages this commercial incredible years that associated to is to future in across right to staffing a a systems with spent with to note, question. for prioritization. right that recording, care health a at Right, well in in how right, pediatric for break which place the I side challenge how optimization business, and separately unbelievable just do our solution, we the but types the design, crisis haven't patient very time. solutions patients illnesses many right with hospitals

that in your interest that our answer and reflective. see question? Does to continuing are is We pipeline

it analytics which the represents with the you've also data vantage I was U.S. wondering potential had conference U.S. an more U.S. given one opportunity Army, year, with if its vantage, looking to you this your multisource The relationship industry and data pipeline? its January for announced the BigBear may you've prospects prospects. in dashboard the program, Thanks. is Army, at remarks what in And and with discussed success past your Army that an sourcing that GFIM on have multi prepared office. over And analytics other defense program, in your is strong Yes. the business and

Sure.

seeing right, of some talk is, I think was probably consolidation it happening. think, of I that because to best contracts, to way is we're absolutely answer federal the to it about things the relates maybe as

We into cases, which are contract seeing infrastructures, and properties manage more streamline the multiple contracts contract, are in conversation. efficiently to consolidated definitely this having certain government larger And the we work. allows

in that relates federal kind and terms seen other we seeing as of we've ourselves to Now and we're instances the in it how position general, of opportunity. market, what

systems the on all that particularly growing. right, cyber engineering. I think, supply vectors, in see of I like work reverse autonomous whether XX, it's global IMX have we a it's chain with cybersecurity and our three right whether our risk, right, it's and whether complex right, pipeline logistics, strengthened, at focus

this it think is doing level the geopolitical and pretty is best and and seats has, part right unrest unprecedented of leadership I are we to our now in the no right small there I to is fact that guess a short summary the with that help. is do that in

you taking for interest raise? the Great. ballpark tax is liquidity $XX and cash what for payments million should the Julie, what total following when reduction expect and mentioned also XXXX the into the forma we for payments And burn account for that the pro company cost initiatives, different

your Louie. first Well, specifically to question,

at QX, profile, done reductions feel out with cost burn liquidity of a we has piping like and the in So, be really QX, the really significantly do we, cash in the that have we But in good getting cash taken our QX starting we again, obviously. when we we've to burn expect look lower. helped that on significantly job

aware fourth happen already of Now, payments second and quarter that you're do in quarter. our interest

know already those are where of kind you placed. so And

mean in you to on by operational tell clear are what second we day cash the positive, year. to the on-going we I the positive business. our cash targeting, on Again, that, half be day operationally focused targeting flow flow we're would to of be

So It know, that see include, customer and expenses would includes, normal that. as as payments. you interest or you in would like be everything severance as would transaction things well those where inflow doesn't that payments, which of the costs fees operating the are, that I said, that for business

I positive QX in going the some In think advance in year. that earnings more we this noticed in of of costs had second our release, we start-up late year in contract be be fourth quarter to much to believe of a QX. was the just we, in the half the awarded first We're in half early we clear,

is timing the probably so QX. into flow customer of payments And going those to

do in we bit And it year half plenty worse deliver support position so made. our the the promises in that liquidity than the of going think little that are growth where we've with think is liquidity we we strategy the But early that to look cash have will year. and back of our we're to a still comfortable on be we

Great. Thanks, Mandy. me. Julie for That's thanks it and

Thank you, Louie.

question next proceed with Singh the comes Please line our of your Param with And Oppenheimer. question. from

you. Yes, thank on Singh Ittai Kidron this is from for Oppenheimer. Hi, Param

that, just talked against what multiple Obviously, into about and could IDIQ. contracts GFIM really growing doesn't of pace? sense guidance? why So good growth conservatism DACA you're your wanted is with your successes incremental kind me embedding some that wants faster at to I of overall a not mean, parse I your not course, revenue first much of help guide. you've Well it you today, you to get understand Maybe seem much have of a [Indiscernible] all, and, that there baked there. Or in better

of thanks joining. first hi, hello, for So all

of then add to hand it Julie a color. make comments. I'll some I'll to couple Second, so I can, And

in year, XXXX, XXXX. at the when when we, we and looked we think looked forward we then I kind into of had

we certainly line right, really guidance well, what And a as I of up establishing sharing many think see what what challenging included, reasonable, that what ourselves way environment. well shared, we're approaching Julie conversations accelerate, is and we so that for the we, to to, And that see really I of right, But given macroeconomic are in Right. continued have to is lot seeing we we right, right. sight earlier, we balanced. as think shared companies, a think reinforce I what January be opened

responsive, progress. how And pushing about you a also is anything conversations contracting on can while what being and adapting to guidance know, as will and a needs, think the those I'll we measured solutions continue long side? add our those I federal meet appropriate extremely extending and very to and our But reflects be optimistic Julie, approach And process between be to are XXXX. your one.

there's funded, say had saw we sense of would specifically couple war year, and this we I most was ourselves. I of the don't Yes, only of we're how in of contracts to from things yes, to would to timing have get terms ahead that everything with or say that different The on would various some that I in was some Ukraine. add maybe those that of that challenges would I funding said, to of as were funding that trying add of be that reprioritized be is last associated shifting we thing that ensure a We experienced going the

front we deliver. believe in what that what is make we and our in can so that is we And sure to us we want guidance of have

has maybe AI with three think other even to the that world, typically there's the this in important in really out. And understand there's and remind prototype major capabilities, things an breakeven, I and reemphasize, MVP small. only guys that is said thing but to that government just we production, typically was then this And we heightened to contracts to a going through it's order excitement I get to just stages around takes phase, you awarded. which have time. there's a go a prove which And into stage, these long to get And

And process that we're seeing, excited a through and through and to so just the that that what about excitement we're move for people while it's with going we're to even curve. seeing, take around everything

think we I we're how we it and committing make about there. how communicating get our what so guidance is And that's fast why where want that is, and we're sure to measured to we're can

so Obviously, phase mean, helpful. much Thank much caller, and you the That's Phase you guidance portion your did had there on the now X. well. revenue higher for obviously could, what output in piece GFIM previously of expect Julie. the than part in the embedded a terms as do the you Maybe anticipated? if really Phase was contract? on much better dollar I of X, Is Mandy for X what's I higher

fair a walked as which last phases, do kind the right. same it's the of as question. in And initial, So our Julie is, of through terms thinking about

for phase As we're we where cases in can you're phase talking production believe from that compete that at look right, means we to in doing shift world the X, I positioned as move we X to which in, are we it into putting the example at about very it for the X our all well continue and phase we it's think because Ultimately, of larger, because delivery, execution scale. process. real and

terms -- in price and of right. Now,

to that determination make make it's because in, to customer the Julie, mean, definitely time spending we are award the certainly I as appropriate. a lot it. I of up think, But to and weigh talking ultimately, about

going overall Yes, deployment the, last still X, the the phase It the solution. of next on we're looking working for still think to year I And sure. in mean, accelerate for announced Yes. back program. I the very of everything's toward we're phase. well, again, September was toward

the during it's move and continue out a more, prove down production we've about we're their curve, mode. whether But contracting how where process before so And in they're to they going. going as said, refine land can they to excited they processes need some fast and decide the

don't I And quickly part the than and now it is as budget. over do hoped. to just we I everything's production, how as going of right into believe can't want exactly think to so although maybe to better we we I even calmed hoped, XXXX going we think commit And that they're move

talk could a really helpful. Now, Maybe the as I bit opportunity. don't Thank little that's cybersecurity that's discussed been much. about more you much. we think so

and what upcoming we revenue affect potentially one of when new understand So the of avenues could doing, years. the you're that

Sure, little bit a so about I talk that. can

being a, pretty part competency. it's of the have talked important capability do referring we was quickly, and to I to for pretty I right, I our and which able business associated it actually mature on to be with to, at So defensive and that. we that have and engineering a standing But whether and work not we're right But the offensive simulation, really that area to monitor around not do mature seeing the long that that postures not in so think cyber security vulnerability new or realistic beginning this able of modeling note is a first, also potential, is call, be only about analysis reverse to us, and spacecraft componentry. is solutions,

as that, an wide as Now great we of some for variety go that cybersecurity as right, through with not landscape as set industries systems basis, challenges level continues fourth industrial to of that sets and the the revolution. to the on the the we're all of a these of things of one hardware is up rigor, on-going mature. of well to A be seeing is we needed be right, going lot just know, threat continues were

worked have service. and that seeing a of large as would manufacturer describe on something doing area to to the focus the reverse so have of want we're a is of a kind around is a That through we're analysis. being as I with unique lot seen I where I additional do able we work full But what in in vulnerability all is I and vulnerability more pretty not new we've kind with chances. physical guess companies and educate other that platform work. end and engineering assessments of way the And hardware to and scope, competency process that There being to more end actually able work extraction

we But So where have I helpful. some is hope that's that superpowers.

this traditional cybersecurity often like If be you would or contractors, compete in for displacement more you with, defense vertical? companies

question. good a It's

we I think, in, face in in the that right. work

-- both along it. pretty to a press that of in vulnerability reverse and first from of focus the distinct as technology work, of see we we're solution that I special level mentioned, doing superpower would using Most kind face engineering around, that of for live So and I do solution, relates on of kind pretty And that's partner, is services highly we're particularly that work work to a the the that the have this focused, competition say the I a pretty work. it right individuals sides. some right, we broader requires wire who red pipeline skilled talented if

in we competition question? traditional see your too. Does world So more kind that some the do of contractor answer

understanding trajectory better that big the of over number Yes, some that one helpful. the absolutely. is That's would really come embedded Now, you Thank are XX% you sort issue, previously, of some but from time? increase down, that add you. or think The of a I commercial, number you would your of that as know different be outlined, business? revenue, from for that guideline commercial, in last. broken can guide? piece Maybe haven't commercial revenue XXXX would Is percentage coming

a question. It's great

to we great, see right, continue to pipeline the see commercial our business we, grow. show So right, promise, that we're continuing is

still to But specifically. threshold a of Because broken we're I not us. it have year it. think for that out XXXX for is We below be XX% kind going great

then, that's bit taking at on can margins why looking or margin give seems of I'm number on clarity gross was you margins the that just front. the here? you're lower a me seeing little maybe a like the pressure And some

say me comparison. there a little anomaly the close year-to-date Mandy. fourth in QX to would one we've what QX The is any run else sync year. what of that last bit was year, quarter in honestly, Yes, I caused kind you, all been year. up below onetime of pretty in And we've a catch was the everything look a that sandy with margins saw of actually, running to the last happened what year-over-year slightly you let take for that out

look that comparison, what although So segments. consistently when it is XXXX at I QX, the what right we through odd. you But you ran at the see looks level in C&E think

Got it.

what breakeven. could an that's you Thank of much. so get helpful. you probably level And Okay, think, EBITDA really at revenue then you

can, between our EBITDA. we I aligned will our not and as to and guidance where wrong to going have really with structure opportunity this that question. XXX to investments necessary. how revenue. those is, can opportunities take sure millions costs our everything we to out focus in can great can investment really going we the do is to, make a our on take And we're XXX single so we But and going target we're in thing. to, make guidance It's we not we're but basically of that digit mean, going do be where and think of We're that negative continue on going negatives diligent to unique we very enough we advantage our lifecycle We're can cost that be focus on

where guidance now. year. need for right that's, that's to we our think the I be And So, that's

Got I'll guys. line. it. back much, so Thank you get in

you. Thank

from with your the with Our line of question. Capital. next [Ph] Please comes Instructions] Northland [Operator question Vivek Balani proceed

Mike on three Hi, I Lattimore. I'm for have Vivek questions.

one do first question first how do salespeople Yes, them you this The -- my to have? expect And many is you year? is grow hi.

I him many going heard to was say you the sure just how I we I Are I to question have? asking right. salespeople want Yes, make

Yes.

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you and Julie, take to ahead one. that do want go

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do My year? about right. analytical All question last cyber engineering I growing you faster this see mean, is

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Yes.

on right? this, the and So for this add for right. me, Julie that past been quarters something about you can is is several talking that We've

continues we're right, us of growth of an which we be our you'd projected well. I growth, drive, margin that analytics if or have a expect guess, know That to would business, a lot said, to add C&E say, anything for a not? don't Our seeing is a where lot higher business, us a business being to I But right. good of year Julie, I is overall. right part as area for

would clearly on a recently, revenue would segment, to analytics toward performance, our been which services, our I you've which is, we've margin that point higher focusing of seen right. just say, lead technology Yes, shift I mix

drive we And so helps in in growth to And that had XXXX. QX we segment. the back in that XX% year we're And and pleased into the of expect to that that see the us we quarter that as expect half profitability that well. in analytic continue better

faster. So do grow expect we yes, analytics segment the to

Thank lot, Thanks guys. you. a

you. Thank

will the of end to the for remarks. the reached have Mandy question-and-answer Long session. now I back closing we call And turn over

Thank discussion. for you all the joining today. questions so and much the Appreciate

business. clear of appreciate our As We forward you I to we are and and a the all that continue to right very things next future be with sustainable all speaking growth our I, about shared look and on doing long-term your the order. excited potential again genuinely we focus I have BigBear.ai, and time, for

And conference. this concludes today's

time. this at you for lines participation. your your disconnect may You Thank