- 4Q 24 revenue of $43.8 million (4Q 23 $40.6 million) +8% year-over-year
- Exchanged $182.3 million in 6.00% convertible senior notes due in 2026 for 6.00% convertible senior secured notes due in 2029; $58 million has already converted into equity since the end of 4Q 24 resulting in $142.3 million remaining debt on convertible notes.
- Cash balance of $50.1 million, as of December 31, 2024; During 1Q 25, received gross proceeds of $64.7 million of cash, following the exercise of previously issued warrants; combined with $58 million of conversions on convertible debt, net debt1 has decreased from $150 million to $27 million and debt-to-cash ratio2 has decreased from 4.0 to 1.2 since the end of 4Q 24.
- 2025 Outlook provided between $160 million – $180 million revenue, and negative single digit Adjusted EBITDA*
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 fourth quarter of 2024 and issued an investor presentation that has been posted to the Investor Relations section of the Company’s website.
“2024 was a pivotal year for the business. We demonstrated momentum through major contract wins, expanding our backlog and growing our pipeline, maturing our technology portfolio, and restructuring our debt to strengthen our financial position for the long term. These efforts were driven by strong execution from our team,” said Kevin McAleenan, Chief Executive Officer, BigBear.ai.
“On the financial front, we’ve kicked off the first quarter of 2025 by significantly deleveraging our balance sheet. Through a combination of cash proceeds from warrant exercises and debt reductions resulting from conversions on our convertible notes, we’re in a strong position for growth in 2025 and beyond,” said Julie Peffer, Chief Financial Officer, BigBear.ai.
Financial Highlights
- Revenue increased 8% to $43.8 million for the fourth quarter of 2024, compared to $40.6 million for the fourth quarter of 2023 primarily due to additional revenue related to Department of Homeland Security and Digital Identity awards.
- Gross margin was 37.4% in the fourth quarter of 2024 as compared to 32.1% in the fourth quarter of 2023, primarily driven by year-end fringe and overhead true-up allocation adjustments in 4Q 24 of $2.7 million with an offsetting increase in SG&A expenses.
- Primarily driven by the non-cash changes in fair value of $93.3 million from derivative liabilities related to the 2029 convertible notes and warrants, net loss in the fourth quarter of 2024 was $108.0 million, compared to $21.3 million for the fourth quarter of 2023.
- Non-GAAP Adjusted EBITDA* of $2.0 million for the fourth quarter of 2024 compared to $3.7 million for the fourth quarter of 2023, primarily driven by increased Recurring SG&A*.
- SG&A of $22.2 million for the fourth quarter of 2024 compared to $18.2 million for the fourth quarter of 2023 and Recurring SG&A* of $18.0 million in the fourth quarter of 2024 compared to $12.3 million in the fourth quarter of 2023. The year-over-year increases include Pangiam’s headcount and operating expenses not included in the fourth quarter of 2023 as well as year-end fringe and overhead true-up allocation adjustments of $2.7 million in the fourth quarter of 2024 which are offset in improved gross profit.
- Ending backlog was $418 million as of December 31, 2024, an increase of $250 million or 2.5x ending backlog as of December 31, 2023.
- The consolidated year-to-date results include results from Pangiam from the acquisition date of February 29, 2024 to December 31, 2024.
Financial Outlook
For the year-ended December 31, 2025, the Company projects:
- Revenue between $160 million and $180 million
- Adjusted EBITDA* — negative single digit millions
In the event that some form of US Government shutdown was to take place in 2025, or a substantial shift in government national security priorities, BigBear.ai would review its guidance as part of prudent financial planning and its efforts to build a long-term sustainable business.
The above information on 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.
|
_______________________________________ |
|
|
1 |
Net Debt is defined as principal outstanding on convertible notes, less cash and cash equivalents. |
|
2 |
Debt-to-Cash Ratio is defined as principal outstanding on convertible notes divided by cash and cash equivalents. |
|
*Adjusted EBITDA is a non-GAAP financial measure. See the “Non-GAAP Financial Measures” section in this press release for additional information and a reconciliation. |
|
Summary of Results for the Fourth Quarter and Year Ended |
|||||||||||||||
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
$ thousands (expect per share amounts) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Revenues |
$ |
43,827 |
|
|
$ |
40,563 |
|
|
$ |
158,236 |
|
|
$ |
155,164 |
|
|
Cost of revenues |
|
27,422 |
|
|
|
27,547 |
|
|
|
113,016 |
|
|
|
114,563 |
|
|
Gross margin |
|
16,405 |
|
|
|
13,016 |
|
|
|
45,220 |
|
|
|
40,601 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
|
Selling, general and administrative |
|
22,243 |
|
|
|
18,232 |
|
|
|
80,040 |
|
|
|
71,057 |
|
|
Research and development |
|
2,334 |
|
|
|
2,031 |
|
|
|
10,863 |
|
|
|
5,035 |
|
|
Restructuring charges |
|
(30 |
) |
|
|
42 |
|
|
|
1,287 |
|
|
|
822 |
|
|
Transaction expenses |
|
— |
|
|
|
1,284 |
|
|
|
1,450 |
|
|
|
2,721 |
|
|
Goodwill impairment |
|
— |
|
|
|
— |
|
|
|
85,000 |
|
|
|
— |
|
|
Operating loss |
|
(8,142 |
) |
|
|
(8,573 |
) |
|
|
(133,420 |
) |
|
|
(39,034 |
) |
|
Interest expense |
|
3,597 |
|
|
|
3,544 |
|
|
|
14,244 |
|
|
|
14,200 |
|
|
Net increase in fair value of derivatives |
|
93,317 |
|
|
|
9,395 |
|
|
|
108,149 |
|
|
|
7,424 |
|
|
Loss on extinguishment of debt |
|
3,440 |
|
|
|
— |
|
|
|
3,440 |
|
|
|
— |
|
|
Other (income) expense |
|
(475 |
) |
|
|
(306 |
) |
|
|
(2,194 |
) |
|
|
(393 |
) |
|
Loss before taxes |
|
(108,021 |
) |
|
|
(21,206 |
) |
|
|
(257,059 |
) |
|
|
(60,265 |
) |
|
Income tax expense |
|
13 |
|
|
|
50 |
|
|
|
35 |
|
|
|
101 |
|
|
Net loss |
$ |
(108,034 |
) |
|
$ |
(21,256 |
) |
|
$ |
(257,094 |
) |
|
$ |
(60,366 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Basic and diluted net loss per share |
$ |
(0.43 |
) |
|
$ |
(0.14 |
) |
|
$ |
(1.10 |
) |
|
$ |
(0.40 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
||||||||
|
Basic |
|
250,575,733 |
|
|
|
156,818,532 |
|
|
|
233,604,500 |
|
|
|
149,234,917 |
|
|
Diluted |
|
250,575,733 |
|
|
|
156,818,532 |
|
|
|
233,604,500 |
|
|
|
149,234,917 |
|
|
Consolidated Balance Sheets as of |
|||||||
|
|
|
|
|
||||
|
$ in thousands |
December 31, 2024 |
|
December 31, 2023 |
||||
|
Assets |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
50,141 |
|
|
$ |
32,557 |
|
|
Accounts receivable, less allowance for credit losses |
|
38,953 |
|
|
|
21,949 |
|
|
Contract assets |
|
895 |
|
|
|
4,822 |
|
|
Prepaid expenses and other current assets |
|
3,768 |
|
|
|
4,449 |
|
|
Total current assets |
|
93,757 |
|
|
|
63,777 |
|
|
Non-current assets: |
|
|
|
||||
|
Property and equipment, net |
|
1,566 |
|
|
|
997 |
|
|
Goodwill |
|
119,081 |
|
|
|
48,683 |
|
|
Intangible assets, net |
|
119,119 |
|
|
|
82,040 |
|
|
Right-of-use assets |
|
9,263 |
|
|
|
4,041 |
|
|
Other non-current assets |
|
990 |
|
|
|
372 |
|
|
Total assets |
$ |
343,776 |
|
|
$ |
199,910 |
|
|
|
|
|
|
||||
|
Liabilities and stockholders’ equity (deficit) |
|
|
|
||||
|
Current liabilities: |
|
|
|
||||
|
Accounts payable |
$ |
8,455 |
|
|
$ |
11,038 |
|
|
Short-term debt, including current portion of long-term debt |
|
818 |
|
|
|
1,229 |
|
|
Accrued liabilities |
|
19,496 |
|
|
|
16,233 |
|
|
Contract liabilities |
|
2,541 |
|
|
|
879 |
|
|
Current portion of long-term lease liability |
|
1,068 |
|
|
|
779 |
|
|
Derivative liabilities |
|
170,515 |
|
|
|
37,862 |
|
|
Other current liabilities |
|
73 |
|
|
|
602 |
|
|
Total current liabilities |
|
202,966 |
|
|
|
68,622 |
|
|
Non-current liabilities: |
|
|
|
||||
|
Long-term debt, net |
|
134,287 |
|
|
|
194,273 |
|
|
Long-term lease liability |
|
9,120 |
|
|
|
4,313 |
|
|
Deferred tax liabilities |
|
— |
|
|
|
37 |
|
|
Total liabilities |
|
346,373 |
|
|
|
267,245 |
|
|
Stockholders’ equity (deficit): |
|
|
|
||||
|
Common stock, par value $0.0001; 500,000,000 shares authorized and 251,554,378 shares issued and outstanding at December 31, 2024 and 157,287,522 shares issued and outstanding at December 31, 2023 |
|
26 |
|
|
|
17 |
|
|
Additional paid-in capital |
|
625,130 |
|
|
|
303,428 |
|
|
Treasury stock, at cost 9,952,803 shares at December 31, 2024 and December 31, 2023 |
|
(57,350 |
) |
|
|
(57,350 |
) |
|
Accumulated deficit |
|
(570,524 |
) |
|
|
(313,430 |
) |
|
Accumulated other comprehensive income |
|
121 |
|
|
|
— |
|
|
Total stockholders’ equity (deficit) |
|
(2,597 |
) |
|
|
(67,335 |
) |
|
Total liabilities and stockholders’ equity (deficit) |
$ |
343,776 |
|
|
$ |
199,910 |
|
|
Consolidated Statements of Cash Flows for the Year Ended |
|||||||||||||||
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
$ in thousands |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
||||||||
|
Net loss |
$ |
(108,034 |
) |
|
$ |
(21,256 |
) |
|
$ |
(257,094 |
) |
|
$ |
(60,366 |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
||||||||
|
Depreciation and amortization expense |
|
3,133 |
|
|
|
1,965 |
|
|
|
11,873 |
|
|
|
7,901 |
|
|
Amortization of debt issuance costs |
|
508 |
|
|
|
506 |
|
|
|
2,025 |
|
|
|
2,018 |
|
|
Equity-based compensation expense |
|
5,053 |
|
|
|
6,079 |
|
|
|
21,127 |
|
|
|
18,671 |
|
|
Goodwill impairment |
|
— |
|
|
|
— |
|
|
|
85,000 |
|
|
|
— |
|
|
Non-cash lease expense |
|
167 |
|
|
|
147 |
|
|
|
720 |
|
|
|
597 |
|
|
Provision for doubtful accounts |
|
8 |
|
|
|
132 |
|
|
|
228 |
|
|
|
1,739 |
|
|
Deferred income tax (benefit) expense |
|
— |
|
|
|
35 |
|
|
|
(37 |
) |
|
|
88 |
|
|
Loss on extinguishment of debt |
|
3,440 |
|
|
|
— |
|
|
|
3,440 |
|
|
|
— |
|
|
Net increase (decrease) in fair value of derivatives |
|
93,317 |
|
|
|
9,395 |
|
|
|
108,149 |
|
|
|
7,424 |
|
|
Loss on sale of property and equipment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10 |
|
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
||||||||
|
(Increase) decrease in accounts receivable |
|
(6,357 |
) |
|
|
6,949 |
|
|
|
(11,753 |
) |
|
|
6,403 |
|
|
Decrease (increase) in contract assets |
|
849 |
|
|
|
(4,370 |
) |
|
|
3,927 |
|
|
|
(3,510 |
) |
|
Decrease (increase) in prepaid expenses and other assets |
|
536 |
|
|
|
(282 |
) |
|
|
2,076 |
|
|
|
5,899 |
|
|
(Decrease) increase in accounts payable |
|
4,197 |
|
|
|
1,962 |
|
|
|
(4,027 |
) |
|
|
(4,384 |
) |
|
(Decrease) increase in accrued liabilities |
|
(10,483 |
) |
|
|
602 |
|
|
|
(2,873 |
) |
|
|
2,637 |
|
|
Increase (decrease) in contract liabilities |
|
28 |
|
|
|
(1,441 |
) |
|
|
514 |
|
|
|
(1,143 |
) |
|
(Decrease) increase in other liabilities |
|
(1,168 |
) |
|
|
(497 |
) |
|
|
(1,414 |
) |
|
|
(2,291 |
) |
|
Net cash used in operating activities |
|
(14,806 |
) |
|
|
(74 |
) |
|
|
(38,119 |
) |
|
|
(18,307 |
) |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
||||||||
|
Acquisition of business, net of cash acquired |
|
— |
|
|
|
— |
|
|
|
13,935 |
|
|
|
— |
|
|
Purchases of property and equipment |
|
(180 |
) |
|
|
— |
|
|
|
(484 |
) |
|
|
(2 |
) |
|
Capitalized software development costs |
|
(3,234 |
) |
|
|
(1,084 |
) |
|
|
(10,630 |
) |
|
|
(3,828 |
) |
|
Net cash provided by (used in) investing activities |
|
(3,414 |
) |
|
|
(1,084 |
) |
|
|
2,821 |
|
|
|
(3,830 |
) |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
||||||||
|
Proceeds from issuance of shares for exercised RDO and PIPE warrants |
|
— |
|
|
|
— |
|
|
|
53,809 |
|
|
|
— |
|
|
Proceeds from issuance of Private Placement and Registered Direct Offering shares |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
50,000 |
|
|
Payment of Private Placement and Registered Direct Offering transaction costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,724 |
) |
|
Proceeds from short-term borrowings |
|
817 |
|
|
|
1,229 |
|
|
|
817 |
|
|
|
1,229 |
|
|
Repayment of short-term borrowings |
|
— |
|
|
|
— |
|
|
|
(1,229 |
) |
|
|
(2,059 |
) |
|
Payment of debt issuance costs to third parties |
|
(349 |
) |
|
|
— |
|
|
|
(349 |
) |
|
|
— |
|
|
Proceeds from exercise of options |
|
302 |
|
|
|
— |
|
|
|
421 |
|
|
|
— |
|
|
Issuance of common stock upon ESPP purchase |
|
760 |
|
|
|
645 |
|
|
|
1,367 |
|
|
|
1,176 |
|
|
Payments of tax withholding from the issuance of common stock |
|
765 |
|
|
|
(343 |
) |
|
|
(2,378 |
) |
|
|
(2,560 |
) |
|
Net cash provided by financing activities |
|
2,295 |
|
|
|
1,531 |
|
|
|
52,458 |
|
|
|
42,062 |
|
|
Effect of foreign currency rate changes on cash and cash equivalents |
|
482 |
|
|
|
— |
|
|
|
424 |
|
|
|
— |
|
|
Net increase (decrease) in cash and cash equivalents |
|
(15,443 |
) |
|
|
373 |
|
|
|
17,584 |
|
|
|
19,925 |
|
|
Cash and cash equivalents at the beginning of period |
|
65,584 |
|
|
|
32,184 |
|
|
|
32,557 |
|
|
|
12,632 |
|
|
Cash and cash equivalents at the end of the period |
$ |
50,141 |
|
|
$ |
32,557 |
|
|
$ |
50,141 |
|
|
$ |
32,557 |
|
|
EBITDA* and Adjusted EBITDA* for the Fourth Quarter and Year Ended |
|||||||||||||||
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
$ thousands |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Net loss |
$ |
(108,034 |
) |
|
$ |
(21,256 |
) |
|
$ |
(257,094 |
) |
|
$ |
(60,366 |
) |
|
Interest expense |
|
3,597 |
|
|
|
3,544 |
|
|
|
14,244 |
|
|
|
14,200 |
|
|
Interest income |
|
(486 |
) |
|
|
(306 |
) |
|
|
(2,293 |
) |
|
|
(392 |
) |
|
Income tax expense (benefit) |
|
13 |
|
|
|
50 |
|
|
|
35 |
|
|
|
101 |
|
|
Depreciation and amortization |
|
3,132 |
|
|
|
1,965 |
|
|
|
11,872 |
|
|
|
7,901 |
|
|
EBITDA |
|
(101,778 |
) |
|
|
(16,003 |
) |
|
|
(233,236 |
) |
|
|
(38,556 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
|
Equity-based compensation |
|
5,053 |
|
|
|
6,079 |
|
|
|
21,127 |
|
|
|
18,671 |
|
|
Employer payroll taxes related to equity-based compensation(1) |
|
244 |
|
|
|
75 |
|
|
|
985 |
|
|
|
440 |
|
|
Net increase in fair value of derivatives(2) |
|
93,317 |
|
|
|
9,395 |
|
|
|
108,149 |
|
|
|
7,424 |
|
|
Restructuring charges(3) |
|
(30 |
) |
|
|
42 |
|
|
|
1,287 |
|
|
|
822 |
|
|
Non-recurring strategic initiatives(4) |
|
1,517 |
|
|
|
545 |
|
|
|
6,459 |
|
|
|
3,025 |
|
|
Non-recurring litigation(5) |
|
23 |
|
|
|
2,250 |
|
|
|
1,142 |
|
|
|
2,250 |
|
|
Transaction expenses(6) |
|
— |
|
|
|
1,284 |
|
|
|
1,450 |
|
|
|
2,721 |
|
|
Non-recurring integration costs(7) |
|
175 |
|
|
|
— |
|
|
|
1,800 |
|
|
|
— |
|
|
Goodwill impairment(8) |
|
— |
|
|
|
— |
|
|
|
85,000 |
|
|
|
— |
|
|
Loss on extinguishment of debt(9) |
|
3,440 |
|
|
|
— |
|
|
|
3,440 |
|
|
|
— |
|
|
Adjusted EBITDA |
$ |
1,961 |
|
|
$ |
3,667 |
|
|
$ |
(2,397 |
) |
|
$ |
(3,203 |
) |
|
(1) |
Includes employer payroll taxes due upon the vesting of equity awards granted to employees. |
|
(2) |
The increase in fair value of derivatives during the year ended December 31, 2024, relates to the $42.3 million loss recorded upon the exercise of the 2023 RDO and 2023 PIPE Warrants (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. The additional loss relates to $(11.4) million fair market value adjustment of the 2024 Warrants and IPO Warrants during the year ended December 31, 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 $(11.4) million upon remeasurement of the 2024 Warrants and IPO Warrants’ fair value during the year ended December 31, 2024. Additionally, for the year-ended December 31, 2024, $54.4 million is related to derivative liabilities in connection with the 2029 Convertible Notes. The increase in fair value of derivatives during the year ended December 31, 2023 primarily relates to changes in the fair value of PIPE warrant and RDO warrants issued during the first and second quarters of 2023. |
|
(3) |
During the year ended December 31, 2024 and the year ended December 31, 2023, 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 related to the execution of certain strategic initiatives of the Company. |
|
(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 year ended December 31, 2024 and December 31, 2023 consist primarily of diligence, legal and other related expenses incurred associated with the Pangiam acquisition. Transaction costs incurred in 2022 are primarily related to our acquisition of ProModel Corporation as well as costs associated with evaluating other acquisition opportunities. |
|
(7) |
Non-recurring internal integration costs related to the Pangiam acquisition. |
|
(8) |
During the year ended December 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. |
|
(9) |
Loss on extinguishment of debt is related to the exchange of the 6.00% convertible senior notes due in 2026 for 6.00% convertible senior secured notes due in 2029. |
| *EBITDA and Adjusted EBITDA are non-GAAP financial measures. See the “Non-GAAP Financial Measures” section in this press release for additional information and a reconciliation. |
|
Adjusted EBITDA Reconciliation* for the Fourth Quarter and Year Ended |
|||||||||||||||
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
$ in thousands |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Revenue |
$ |
43,827 |
|
|
$ |
40,563 |
|
|
$ |
158,236 |
|
|
$ |
155,164 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net loss |
|
(108,034 |
) |
|
|
(21,256 |
) |
|
|
(257,094 |
) |
|
|
(60,366 |
) |
|
Interest expense |
|
3,597 |
|
|
|
3,544 |
|
|
|
14,244 |
|
|
|
14,200 |
|
|
Interest income |
|
(486 |
) |
|
|
(306 |
) |
|
|
(2,293 |
) |
|
|
(392 |
) |
|
Income tax expense |
|
13 |
|
|
|
50 |
|
|
|
35 |
|
|
|
101 |
|
|
Depreciation & amortization |
|
3,132 |
|
|
|
1,965 |
|
|
|
11,872 |
|
|
|
7,901 |
|
|
EBITDA |
$ |
(101,778 |
) |
|
$ |
(16,003 |
) |
|
$ |
(233,236 |
) |
|
$ |
(38,556 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
|
Equity-based compensation |
|
5,053 |
|
|
|
6,079 |
|
|
|
21,127 |
|
|
|
18,671 |
|
|
Employer payroll taxes related to equity-based compensation(1) |
|
244 |
|
|
|
75 |
|
|
|
985 |
|
|
|
440 |
|
|
Net increase in fair value of derivatives(2) |
|
93,317 |
|
|
|
9,395 |
|
|
|
108,149 |
|
|
|
7,424 |
|
|
Restructuring charges(3) |
|
(30 |
) |
|
|
42 |
|
|
|
1,287 |
|
|
|
822 |
|
|
Non-recurring integration costs and strategic initiatives(4)(7) |
|
1,692 |
|
|
|
545 |
|
|
|
8,259 |
|
|
|
3,025 |
|
|
Non-recurring litigation(5) |
|
23 |
|
|
|
2,250 |
|
|
|
1,142 |
|
|
|
2,250 |
|
|
Transaction expenses(6) |
|
— |
|
|
|
1,284 |
|
|
|
1,450 |
|
|
|
2,721 |
|
|
Goodwill impairment(8) |
|
— |
|
|
|
— |
|
|
|
85,000 |
|
|
|
— |
|
|
Loss on extinguishment of debt(9) |
|
3,440 |
|
|
|
— |
|
|
|
3,440 |
|
|
|
— |
|
|
Adjusted EBITDA |
$ |
1,961 |
|
|
$ |
3,667 |
|
|
$ |
(2,397 |
) |
|
$ |
(3,203 |
) |
|
Gross Margin |
|
37.4 |
% |
|
|
32.1 |
% |
|
|
28.6 |
% |
|
|
26.2 |
% |
|
Net Loss Margin |
|
(246.5 |
)% |
|
|
(52.4 |
)% |
|
|
(162.5 |
)% |
|
|
(38.9 |
)% |
|
Adjusted EBITDA Margin |
|
4.5 |
% |
|
|
9.0 |
% |
|
|
(1.5 |
)% |
|
|
(2.1 |
)% |
|
(1) |
Includes employer payroll taxes due upon the vesting of equity awards granted to employees. |
|
(2) |
The increase in fair value of derivatives during the year ended December 31, 2024, relates to the $42.3 million loss recorded upon the exercise of the 2023 RDO and 2023 PIPE Warrants (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. The additional loss relates to $(11.4) million fair market value adjustment of the 2024 Warrants and IPO Warrants during the year ended December 31, 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 $(11.4) million upon remeasurement of the 2024 Warrants and IPO Warrants’ fair value during the year ended December 31, 2024. Additionally, for the year-ended December 31, 2024, $54.4 million is related to derivative liabilities in connection with the 2029 Convertible Notes. The increase in fair value of derivatives during the year ended December 31, 2023 primarily relates to changes in the fair value of PIPE warrant and RDO warrants issued during the first and second quarters of 2023. |
|
(3) |
During the year ended December 31, 2024 and the year ended December 31, 2023, 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 related to the execution of certain strategic initiatives of the Company. |
|
(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 year ended December 31, 2024 and December 31, 2023 consist primarily of diligence, legal and other related expenses incurred associated with the Pangiam acquisition. Transaction costs incurred in 2022 are primarily related to our acquisition of ProModel Corporation as well as costs associated with evaluating other acquisition opportunities. |
|
(7) |
Non-recurring internal integration costs related to the Pangiam acquisition. |
|
(8) |
During the year ended December 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. |
|
(9) |
Loss on extinguishment of debt is related to the exchange of the 6.00% convertible senior notes due in 2026 for 6.00% convertible senior secured notes due in 2029. |
|
*EBITDA and Adjusted EBITDA are non-GAAP financial measures. See the “Non-GAAP Financial Measures” section in this press release for additional information and a reconciliation. |
|
Recurring SG&A Reconciliation* for the Fourth Quarter and Year Ended |
|||||||||||||||
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
$ in thousands |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Selling, general and administrative |
$ |
22,243 |
|
|
$ |
18,232 |
|
|
$ |
80,040 |
|
|
$ |
71,057 |
|
|
Equity-based compensation allocated to selling, general and administrative expense |
|
(2,907 |
) |
|
|
(3,156 |
) |
|
|
(12,087 |
) |
|
|
(11,349 |
) |
|
Non-recurring integration costs and strategic initiatives (1)(2) |
|
(1,692 |
) |
|
|
(545 |
) |
|
|
(8,259 |
) |
|
|
(3,025 |
) |
|
Non-recurring litigation (3) |
|
(23 |
) |
|
|
(2,250 |
) |
|
|
(1,142 |
) |
|
|
(2,250 |
) |
|
Virgin Orbit AR Reserve |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,475 |
) |
|
Adjusted (recurring) selling, general and administrative expense |
$ |
17,621 |
|
|
$ |
12,281 |
|
|
$ |
58,552 |
|
|
$ |
52,958 |
|
|
(1) |
Non-recurring professional fees related to the execution of certain strategic initiatives of the Company. |
|
(2) |
Non-recurring internal integration costs related to the Pangiam acquisition. |
|
(3) |
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. |
|
*EBITDA and Adjusted EBITDA are non-GAAP financial measures. See the “Non-GAAP Financial Measures” section in this press release for additional information and a reconciliation. |
||
Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters.
Contacts
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