- Sequential improvement to the balance sheet and record cash balance of $390.8 million, as of June 30, 2025, positioning the Company to accelerate growth.
- Company now projects 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 second quarter of 2025 and issued an investor presentation that has been posted to the Investor Relations section of the Company’s website.
“Our robust balance sheet allows us to make significant transformational investments to shape the future of BigBear.ai. Our capital raising activities this quarter coincide with the tremendous opportunities we see coming from the One Big Beautiful Bill, particularly in the Department of Homeland Security, and several of which are uniquely aligned to our core capabilities. This legislation will bring a generational investment and provides over $170 billion in supplemental funding to the Department of Homeland Security, and $150 billion to the Department of Defense for disruptive defense technology. This is not incremental funding for innovation – this is a transformative level of investment. As a Mission Ready AI company with a national and border security focus, it’s directly in our lane,” said Kevin McAleenan, CEO of BigBear.ai.
“Beyond the opportunities that we’re pursuing in the U.S., this quarter, we signed a transformative partnership with leading companies in the UAE under the IHC umbrella focused on accelerating the development and adoption of AI across several domains and applications. This is just the beginning of our international expansion and demonstrates the need for BigBear.ai’s technology and solutions across the globe,” he continued.
“While we are very optimistic with these significant investments and growth opportunities, we have also seen disruptions in federal contracts from efficiency efforts this quarter, most notably in programs that support the U.S. Army, as they seek to consolidate and modernize their data architecture and in turn, we have adjusted our full-year guidance this quarter to reflect these disruptions,” he concluded.
“Our record cash balance will enable us to make significant investments, both organically and inorganically, in an order of magnitude that was not possible before,” said Sean Ricker, CFO of BigBear.ai.
Financial Highlights
- Revenue decreased 18% to $32.5 million for the second quarter of 2025, compared to $39.8 million for the second quarter of 2024 primarily due to lower volume on certain Army programs.
- Gross margin was 25.0% in the second quarter of 2025, compared to 27.8% in the second quarter of 2024.
- Net loss in the second quarter of 2025 was $228.6 million, compared to a net loss of $14.4 million for the second quarter of 2024. The increase in net loss was primarily driven by non-cash changes in derivative liabilities of $135.8 million associated with changes in the fair value of the convertible features of the 2029 Notes and warrants, as well as a non-cash goodwill impairment charge of $70.6 million.
- Non-GAAP Adjusted EBITDA* of $(8.5) million for the second quarter of 2025 compared to $(3.7) million for the second quarter of 2024, primarily driven by decreased gross margin as well as an increase in research and development expenses.
- SG&A of $21.5 million for the second quarter of 2025 compared to $23.4 million for the second quarter of 2024. The year-over-year decrease was primarily driven by lower legal expenses ($1.7 million), and lower bonus expense ($1.1 million).
- Backlog of $380 million as of June 30, 2025.
Financial Outlook
For the year-ended December 31, 2025, the Company now projects:
- Revenue between $125 million and $140 million
Due to uncertainty on certain Army programs as well as new anticipated growth investment spending in the second half of the year, at this time, the Company is withdrawing its previously provided Adjusted EBITDA guidance for the year-ended December 31, 2025. The Company expects to provide updated Adjusted EBITDA guidance at a later date. 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 Second Quarter Ended |
|||||||||||||||
|
June 30, 2025 and June 30, 2024 |
|||||||||||||||
|
(Unaudited) |
|||||||||||||||
|
|
|||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
$ thousands (expect per share amounts) |
|
2025 |
|
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
|
Revenues |
$ |
32,472 |
|
|
$ |
39,783 |
|
|
$ |
67,229 |
|
|
$ |
72,904 |
|
|
Cost of revenues |
|
24,359 |
|
|
|
28,720 |
|
|
|
51,728 |
|
|
|
54,855 |
|
|
Gross margin |
|
8,113 |
|
|
|
11,063 |
|
|
|
15,501 |
|
|
|
18,049 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
|
Selling, general and administrative |
|
21,487 |
|
|
|
23,364 |
|
|
|
44,219 |
|
|
|
40,312 |
|
|
Research and development |
|
4,393 |
|
|
|
3,565 |
|
|
|
8,559 |
|
|
|
4,709 |
|
|
Restructuring charges |
|
1,899 |
|
|
|
457 |
|
|
|
3,597 |
|
|
|
1,317 |
|
|
Transaction expenses |
|
— |
|
|
|
347 |
|
|
|
— |
|
|
|
1,450 |
|
|
Goodwill impairment |
|
70,636 |
|
|
|
— |
|
|
|
70,636 |
|
|
|
85,000 |
|
|
Operating loss |
|
(90,302 |
) |
|
|
(16,670 |
) |
|
|
(111,510 |
) |
|
|
(114,739 |
) |
|
Interest expense |
|
4,419 |
|
|
|
6,452 |
|
|
|
9,535 |
|
|
|
12,837 |
|
|
Net increase (decrease) in fair value of derivatives |
|
135,751 |
|
|
|
(8,081 |
) |
|
|
169,087 |
|
|
|
15,726 |
|
|
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
2,577 |
|
|
|
— |
|
|
Other income, net |
|
(1,867 |
) |
|
|
(617 |
) |
|
|
(2,143 |
) |
|
|
(1,072 |
) |
|
Loss before taxes |
|
(228,605 |
) |
|
|
(14,424 |
) |
|
|
(290,566 |
) |
|
|
(142,230 |
) |
|
Income tax expense |
|
14 |
|
|
|
15 |
|
|
|
39 |
|
|
|
1 |
|
|
Net loss |
$ |
(228,619 |
) |
|
$ |
(14,439 |
) |
|
$ |
(290,605 |
) |
|
$ |
(142,231 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Basic and diluted net loss per share |
$ |
(0.71 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.97 |
) |
|
$ |
(0.66 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
||||||||
|
Basic |
|
320,591,204 |
|
|
|
246,303,139 |
|
|
|
299,666,133 |
|
|
|
216,754,082 |
|
|
Diluted |
|
320,591,204 |
|
|
|
246,303,139 |
|
|
|
299,666,133 |
|
|
|
216,754,082 |
|
|
Consolidated Balance Sheets as of |
|||||||
|
June 30, 2025 and December 31, 2024 |
|||||||
|
(Unaudited) |
|||||||
|
|
|
|
|
||||
|
$ in thousands (except per share amounts) |
June 30, |
|
December 31, |
||||
|
Assets |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
390,845 |
|
|
$ |
50,141 |
|
|
Accounts receivable, less allowance for credit losses |
|
28,342 |
|
|
|
38,953 |
|
|
Contract assets |
|
701 |
|
|
|
895 |
|
|
Prepaid expenses and other current assets |
|
4,395 |
|
|
|
3,768 |
|
|
Total current assets |
|
424,283 |
|
|
|
93,757 |
|
|
Non-current assets: |
|
|
|
||||
|
Property and equipment, net |
|
1,425 |
|
|
|
1,566 |
|
|
Goodwill |
|
48,446 |
|
|
|
119,081 |
|
|
Intangible assets, net |
|
115,621 |
|
|
|
119,119 |
|
|
Right-of-use assets |
|
8,639 |
|
|
|
9,263 |
|
|
Other non-current assets |
|
958 |
|
|
|
990 |
|
|
Total assets |
$ |
599,372 |
|
|
$ |
343,776 |
|
|
|
|
|
|
||||
|
Liabilities and stockholders’ equity (deficit) |
|
|
|
||||
|
Current liabilities: |
|
|
|
||||
|
Accounts payable |
$ |
3,440 |
|
|
$ |
8,455 |
|
|
Short-term debt, including current portion of long-term debt |
|
367 |
|
|
|
818 |
|
|
Accrued liabilities |
|
16,555 |
|
|
|
19,496 |
|
|
Contract liabilities |
|
4,466 |
|
|
|
2,541 |
|
|
Current portion of long-term lease liability |
|
1,096 |
|
|
|
1,068 |
|
|
Derivative liabilities |
|
193,199 |
|
|
|
170,515 |
|
|
Other current liabilities |
|
2,522 |
|
|
|
73 |
|
|
Total current liabilities |
|
221,645 |
|
|
|
202,966 |
|
|
Non-current liabilities: |
|
|
|
||||
|
Long-term debt, net |
|
102,683 |
|
|
|
135,404 |
|
|
Long-term lease liability |
|
8,494 |
|
|
|
9,120 |
|
|
Total liabilities |
|
332,822 |
|
|
|
347,490 |
|
|
Stockholders’ equity (deficit) |
|
|
|
||||
|
Common stock, par value $0.0001; 500,000,000 shares authorized and 369,171,608 shares issued and outstanding at June 30, 2025 and 251,554,378 shares issued and outstanding at December 31, 2024 |
|
39 |
|
|
|
26 |
|
|
Additional paid-in capital |
|
1,186,256 |
|
|
|
625,130 |
|
|
Treasury stock, at cost 9,952,803 shares at June 30, 2025 and December 31, 2024 |
|
(57,350 |
) |
|
|
(57,350 |
) |
|
Accumulated deficit |
|
(862,246 |
) |
|
|
(571,641 |
) |
|
Accumulated other comprehensive (loss) income |
|
(149 |
) |
|
|
121 |
|
|
Total stockholders’ equity (deficit) |
|
266,550 |
|
|
|
(3,714 |
) |
|
Total liabilities and stockholders’ equity (deficit) |
$ |
599,372 |
|
|
$ |
343,776 |
|
|
Consolidated Statements of Cash Flows for the Six Months Ended |
|||||||||||||||
|
June 30, 2025 and June 30, 2024 |
|||||||||||||||
|
(Unaudited) |
|||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
$ in thousands |
|
2025 |
|
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
||||||||
|
Net loss |
$ |
(228,619 |
) |
|
$ |
(14,439 |
) |
|
$ |
(290,605 |
) |
|
$ |
(142,231 |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
||||||||
|
Depreciation and amortization expense |
|
3,451 |
|
|
|
2,907 |
|
|
|
6,921 |
|
|
|
5,346 |
|
|
Amortization of debt issuance costs and discount |
|
2,026 |
|
|
|
3,407 |
|
|
|
4,790 |
|
|
|
6,743 |
|
|
Equity-based compensation expense |
|
4,319 |
|
|
|
5,749 |
|
|
|
11,719 |
|
|
|
10,906 |
|
|
Goodwill impairment |
|
70,636 |
|
|
|
— |
|
|
|
70,636 |
|
|
|
85,000 |
|
|
Non-cash lease expense |
|
254 |
|
|
|
269 |
|
|
|
624 |
|
|
|
363 |
|
|
Provision for doubtful accounts |
|
311 |
|
|
|
5 |
|
|
|
351 |
|
|
|
176 |
|
|
Deferred income tax benefit |
|
— |
|
|
|
(14 |
) |
|
|
— |
|
|
|
(37 |
) |
|
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
2,577 |
|
|
|
— |
|
|
Net increase (decrease) in fair value of derivatives |
|
135,751 |
|
|
|
(8,081 |
) |
|
|
169,087 |
|
|
|
15,726 |
|
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
||||||||
|
Decrease (increase) in accounts receivable |
|
5,919 |
|
|
|
2,725 |
|
|
|
10,267 |
|
|
|
(6,232 |
) |
|
(Increase) decrease in contract assets |
|
(189 |
) |
|
|
1,338 |
|
|
|
194 |
|
|
|
3,781 |
|
|
Decrease (increase) in prepaid expenses and other assets |
|
1,203 |
|
|
|
293 |
|
|
|
(592 |
) |
|
|
1,243 |
|
|
(Decrease) increase in accounts payable |
|
(876 |
) |
|
|
913 |
|
|
|
(5,039 |
) |
|
|
(5,047 |
) |
|
Increase (decrease) in accrued expenses |
|
319 |
|
|
|
(947 |
) |
|
|
4,765 |
|
|
|
1,652 |
|
|
Increase (decrease) in contract liabilities |
|
1,449 |
|
|
|
(357 |
) |
|
|
1,925 |
|
|
|
1,469 |
|
|
Increase (decrease) in other liabilities |
|
178 |
|
|
|
(826 |
) |
|
|
1,848 |
|
|
|
(275 |
) |
|
Net cash used in operating activities |
|
(3,868 |
) |
|
|
(7,058 |
) |
|
|
(10,532 |
) |
|
|
(21,417 |
) |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
||||||||
|
Acquisition of business, net of cash acquired |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
13,935 |
|
|
Purchases of property and equipment |
|
(5 |
) |
|
|
(129 |
) |
|
|
(85 |
) |
|
|
(167 |
) |
|
Capitalized software development costs |
|
(1,159 |
) |
|
|
(1,582 |
) |
|
|
(2,699 |
) |
|
|
(3,225 |
) |
|
Net cash (used in) provided by investing activities |
|
(1,164 |
) |
|
|
(1,711 |
) |
|
|
(2,784 |
) |
|
|
10,543 |
|
|
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 offering |
|
293,431 |
|
|
|
— |
|
|
|
300,000 |
|
|
|
— |
|
|
Payment of transaction costs for at-the-market offering |
|
(5,135 |
) |
|
|
— |
|
|
|
(5,250 |
) |
|
|
— |
|
|
Repayment of short-term borrowings |
|
(85 |
) |
|
|
(409 |
) |
|
|
(451 |
) |
|
|
(812 |
) |
|
Payment of debt issuance costs to third parties |
|
(337 |
) |
|
|
— |
|
|
|
(4,679 |
) |
|
|
— |
|
|
Proceeds from exercise of options |
|
240 |
|
|
|
33 |
|
|
|
1,633 |
|
|
|
119 |
|
|
Issuance of common stock upon ESPP purchase |
|
1,069 |
|
|
|
607 |
|
|
|
1,069 |
|
|
|
607 |
|
|
Payments of tax withholding from the issuance of common stock |
|
(361 |
) |
|
|
(608 |
) |
|
|
(1,679 |
) |
|
|
(3,140 |
) |
|
Net cash provided by (used in) financing activities |
|
288,822 |
|
|
|
(377 |
) |
|
|
354,765 |
|
|
|
50,583 |
|
|
Effect of foreign currency rate changes on cash and cash equivalents |
|
(555 |
) |
|
|
— |
|
|
|
(745 |
) |
|
|
— |
|
|
Net increase (decrease) in cash and cash equivalents |
|
283,235 |
|
|
|
(9,146 |
) |
|
|
340,704 |
|
|
|
39,709 |
|
|
Cash and cash equivalents at the beginning of period |
|
107,610 |
|
|
|
81,412 |
|
|
|
50,141 |
|
|
|
32,557 |
|
|
Cash and cash equivalents at the end of the period |
$ |
390,845 |
|
|
$ |
72,266 |
|
|
$ |
390,845 |
|
|
$ |
72,266 |
|
|
EBITDA* and Adjusted EBITDA* for the Second Quarter Ended |
|||||||||||||||
|
June 30, 2025 and June 30, 2024 |
|||||||||||||||
|
(Unaudited) |
|||||||||||||||
|
|
|
|
|
||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
$ thousands |
|
2025 |
|
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
|
Net loss |
$ |
(228,619 |
) |
|
$ |
(14,439 |
) |
|
$ |
(290,605 |
) |
|
$ |
(142,231 |
) |
|
Interest expense |
|
4,419 |
|
|
|
6,452 |
|
|
|
9,535 |
|
|
|
12,837 |
|
|
Interest income |
|
(1,704 |
) |
|
|
(725 |
) |
|
|
(2,260 |
) |
|
|
(1,172 |
) |
|
Income tax expense |
|
14 |
|
|
|
15 |
|
|
|
39 |
|
|
|
1 |
|
|
Depreciation and amortization |
|
3,451 |
|
|
|
2,907 |
|
|
|
6,921 |
|
|
|
5,346 |
|
|
EBITDA |
|
(222,439 |
) |
|
|
(5,790 |
) |
|
|
(276,370 |
) |
|
|
(125,219 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
|
Equity-based compensation |
|
4,319 |
|
|
|
5,749 |
|
|
|
11,719 |
|
|
|
10,906 |
|
|
Employer payroll taxes related to equity-based compensation(1) |
|
611 |
|
|
|
48 |
|
|
|
1,626 |
|
|
|
712 |
|
|
Loss on extinguishment of debt(9) |
|
— |
|
|
|
— |
|
|
|
2,577 |
|
|
|
— |
|
|
Net increase (decrease) in fair value of derivatives(2) |
|
135,751 |
|
|
|
(8,081 |
) |
|
|
169,087 |
|
|
|
15,726 |
|
|
Restructuring charges(3) |
|
1,899 |
|
|
|
457 |
|
|
|
3,597 |
|
|
|
1,317 |
|
|
Non-recurring strategic initiatives(4) |
|
717 |
|
|
|
2,040 |
|
|
|
1,611 |
|
|
|
3,374 |
|
|
Non-recurring litigation(5) |
|
8 |
|
|
|
666 |
|
|
|
30 |
|
|
|
545 |
|
|
Transaction expenses(6) |
|
— |
|
|
|
347 |
|
|
|
— |
|
|
|
1,450 |
|
|
Non-recurring integration costs(7) |
|
— |
|
|
|
883 |
|
|
|
— |
|
|
|
883 |
|
|
Goodwill impairment(8) |
|
70,636 |
|
|
|
— |
|
|
|
70,636 |
|
|
|
85,000 |
|
|
Adjusted EBITDA |
$ |
(8,498 |
) |
|
$ |
(3,681 |
) |
|
$ |
(15,487 |
) |
|
$ |
(5,306 |
) |
|
(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 June 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 six months ended June 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 six months ended June 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 an offsetting gain related to the fair market value adjustment on the 2025 warrants and the private warrants of $2.6 million. Additionally, there was an loss of $7.0 million fair market value adjustment of the 2026 and 2029 Notes Conversion Option, during the six months ended June 30, 2025.
The decrease in fair value of derivatives during the three months ended June 30, 2024 relates to remeasurement of the 2024 Warrants and IPO Warrant’s fair value. The increase in fair value of derivatives during the six months ended June 30, 2024, relates to the $42.3 million loss recorded upon the exercise of the 2023 RDO and 2023 PIPE Warrants (the “2023 Warrants”) in connection with the warrant exercise agreements entered into on February 27, 2024 and March 4, 2024. This loss was offset by gains of $10.6 million, net of cash proceeds received, related to the issuance of warrants in 2024 (the “2024 Warrants”). In addition, an $18.3 million reduction in fair value was recorded on the 2024 Warrants issued in connection with the warrant exercise agreements as the fair value decreased from the issue date to quarter end. |
|
(3) |
During the three and six months ended June 30, 2025 and June 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 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 quarter 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 Second Quarter Ended |
|||||||||||||||
|
June 30, 2025 and June 30, 2024 |
|||||||||||||||
|
(Unaudited) |
|||||||||||||||
|
|
|
|
|
||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
$ in thousands |
|
2025 |
|
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
|
Revenue |
$ |
32,472 |
|
|
$ |
39,783 |
|
|
$ |
67,229 |
|
|
$ |
72,904 |
|
|
Net loss |
|
(228,619 |
) |
|
|
(14,439 |
) |
|
|
(290,605 |
) |
|
|
(142,231 |
) |
|
Interest expense |
|
4,419 |
|
|
|
6,452 |
|
|
|
9,535 |
|
|
|
12,837 |
|
|
Interest income |
|
(1,704 |
) |
|
|
(725 |
) |
|
|
(2,260 |
) |
|
|
(1,172 |
) |
|
Income tax expense |
|
14 |
|
|
|
15 |
|
|
|
39 |
|
|
|
1 |
|
|
Depreciation and amortization |
|
3,451 |
|
|
|
2,907 |
|
|
|
6,921 |
|
|
|
5,346 |
|
|
EBITDA* |
$ |
(222,439 |
) |
|
$ |
(5,790 |
) |
|
$ |
(276,370 |
) |
|
$ |
(125,219 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
|
Equity-based compensation |
|
4,319 |
|
|
|
5,749 |
|
|
|
11,719 |
|
|
|
10,906 |
|
|
Employer payroll taxes related to equity-based compensation(1) |
|
611 |
|
|
|
48 |
|
|
|
1,626 |
|
|
|
712 |
|
|
Net increase in fair value of derivatives(2) |
|
135,751 |
|
|
|
(8,081 |
) |
|
|
169,087 |
|
|
|
15,726 |
|
|
Restructuring charges(3) |
|
1,899 |
|
|
|
457 |
|
|
|
3,597 |
|
|
|
1,317 |
|
|
Non-recurring strategic initiatives(4) |
|
717 |
|
|
|
2,040 |
|
|
|
1,611 |
|
|
|
3,374 |
|
|
Non-recurring litigation(5) |
|
8 |
|
|
|
666 |
|
|
|
30 |
|
|
|
545 |
|
|
Transaction expenses(6) |
|
— |
|
|
|
347 |
|
|
|
— |
|
|
|
1,450 |
|
|
Non-recurring integration costs(7) |
|
— |
|
|
|
883 |
|
|
|
— |
|
|
|
883 |
|
|
Goodwill impairment(8) |
|
70,636 |
|
|
|
— |
|
|
|
70,636 |
|
|
|
85,000 |
|
|
Loss on extinguishment of debt(9) |
|
— |
|
|
|
— |
|
|
|
2,577 |
|
|
|
— |
|
|
Adjusted EBITDA* |
$ |
(8,498 |
) |
|
$ |
(3,681 |
) |
|
$ |
(18,064 |
) |
|
$ |
(5,306 |
) |
|
Gross Margin |
|
25.0 |
% |
|
|
27.8 |
% |
|
|
23.1 |
% |
|
|
24.8 |
% |
|
Net Loss Margin |
|
(704.0 |
)% |
|
|
(36.3 |
)% |
|
|
(432.3 |
)% |
|
|
(195.1 |
)% |
|
Adjusted EBITDA* Margin |
|
(26.2 |
)% |
|
|
(9.3 |
)% |
|
|
(26.9 |
)% |
|
|
(7.3 |
)% |
|
(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 June 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 six months ended June 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 six months ended June 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 an offsetting gain related to the fair market value adjustment on the 2025 warrants and the private warrants of $2.6 million. Additionally, there was an loss of $7.0 million fair market value adjustment of the 2026 and 2029 Notes Conversion Option, during the six months ended June 30, 2025.
The decrease in fair value of derivatives during the three months ended June 30, 2024 relates to remeasurement of the 2024 Warrants and IPO Warrant’s fair value. The increase in fair value of derivatives during the six months ended June 30, 2024, relates to the $42.3 million loss recorded upon the exercise of the 2023 RDO and 2023 PIPE Warrants (the “2023 Warrants”) in connection with the warrant exercise agreements entered into on February 27, 2024 and March 4, 2024. This loss was offset by gains of $10.6 million, net of cash proceeds received, related to the issuance of warrants in 2024 (the “2024 Warrants”). In addition, an $18.3 million reduction in fair value was recorded on the 2024 Warrants issued in connection with the warrant exercise agreements as the fair value decreased from the issue date to quarter end. |
|
(3) |
During the three and six months ended June 30, 2025 and June 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 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 quarter 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. |
|
Forward-Looking Statements
This release contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 (the “Securities Act”), the Securities Exchange Act of 1934 (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,” “project,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding our industry, future events, and other statements that are not historical facts.
Contacts
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