BigBear.ai Holdings, Inc. BBAI appears to be making early progress in shifting its business toward higher-margin AI platforms and products, a trend that could support stronger profitability in 2026. While first-quarter 2026 revenues were nearly flat year over year at $34.4 million, the company delivered a major improvement in gross margin, highlighting the impact of its evolving revenue mix.
Gross margin expanded sharply to 34% in the first quarter from 21.3% a year ago, driven largely by increased contributions from generative AI platforms and products tied to the Ask Sage acquisition completed at the end of 2025. Management noted that the company is increasingly shifting from lower-margin services work toward technology-oriented contracts, particularly in national security and trade-and-travel markets.
The momentum in Ask Sage is particularly encouraging. During the quarter, BigBear.ai secured new generative AI-related wins with NASA, the Army Intelligence and Security Command and the Naval Research Lab. The company also launched a broader commercial version of Ask Sage, expanding beyond government customers into critical infrastructure and defense-industry markets.
At the same time, BigBear.ai’s backlog rose 14% sequentially to $281.9 million, supported by a $53 million classified intelligence contract and multiple airport and shipyard-related AI deals.
However, profitability challenges remain. Adjusted EBITDA loss widened year over year due to higher R&D and go-to-market investments. Still, if BigBear.ai continues increasing the share of software, GenAI and platform revenues, margin expansion could become a much bigger part of the company’s growth story in 2026.