BigBear.ai Holdings, Inc. (NYSE: BBAI) is showing early signs of a shift toward higher-quality revenue, with generative AI products becoming a more meaningful driver of growth.
Second-quarter 2026 revenues rose 13% year over year to $36.7 million, with growth primarily attributed to Ask Sage’s generative AI platforms and products.
Gross margin expanded sharply to 32.8% from 25% a year earlier, reflecting increased volume from higher-margin generative AI offerings rather than traditional project-based work.
The Ask Sage platform is gaining traction in secure government environments, including a second-quarter contract win with Naval Air Systems Command, and has been expanded into connected and air-gapped environments.
CargoSeer, another company product, secured a five-year commercial deployment in El Salvador following a successful pilot, pointing to international growth opportunities in AI-driven trade and border-security solutions.
Demand visibility also appears to be strengthening, with BigBear.ai winning more than 20 contracts during the quarter and backlog growing 9% from the end of 2025 to $269.6 million.
Despite the improving revenue mix, the company’s bottom line moved in the wrong direction, with adjusted EBITDA loss widening to $11.6 million from $8.5 million as spending on sales, marketing, and growth increased.
BigBear.ai’s push toward higher-margin AI platforms puts it in more direct competition with Palantir Technologies (NASDAQ: PLTR) and C3.ai (NYSE: AI), both of which generate a larger share of revenue from software-led offerings.
Palantir’s model remains significantly more mature, posting a second-quarter 2026 gross margin of 85% and demonstrating strong growth across both government and commercial customers, underscoring the scalability BigBear.ai is pursuing.
C3.ai presents another useful benchmark, with subscription revenues representing 94% of its fiscal first-quarter 2027 revenues, offering greater recurring-revenue exposure despite ongoing profitability pressures of its own.
BBAI shares have fallen 23.9% over the past six months, underperforming the Zacks Computers – IT Services industry, and the stock currently trades at a forward 12-month price-to-sales ratio of 8.56.
The Zacks Consensus Estimate for BBAI’s 2026 loss per share has widened over the past 60 days, though the projected figure still represents an improvement over the year-ago loss of 82 cents per share.
BigBear.ai currently carries a Zacks Rank of 4, which translates to a Sell rating, reflecting the ongoing gap between its early-stage product momentum and measurable financial improvement.
Sustained product revenue growth and better operating leverage will ultimately determine whether BigBear.ai’s revenue quality shift represents a structural improvement or remains an early-stage transition without a clear profitability timeline.
