BigBear.ai (BBAI) Stock: Why Shares Tumbled 6% in Monday’s Brutal Sell-Off

TLDR

• BigBear.ai stock dropped 6.3% on Monday, closing at $5.975 after trading as low as $5.78
• Q3 2025 revenue fell 20% year-over-year to $33.1 million, missing expectations
• Adjusted EBITDA turned negative at $9.4 million loss versus $0.9 million profit a year earlier
• Company raised $293 million through stock offerings in 2025, raising dilution concerns
• Board doubled authorized shares from 500 million to 1 billion in December

BigBear.ai Holdings, Inc. saw its stock price take a beating on Monday, falling 6.3% in a tough trading session. Shares hit a low of $5.78 before closing at $5.975.

BigBear.ai Holdings, Inc., BBAI

The decline came after the company reported disappointing third-quarter results that spooked investors. Revenue dropped 20% year-over-year to just $33.1 million.

The revenue miss was driven primarily by lower volumes on Army programs. These government contracts have been a key part of BigBear.ai’s business model.

Gross margins also compressed during the quarter. They fell to 22.4% from 25.9% in the same period last year.

But the real concern for investors was the profitability picture. Adjusted EBITDA turned negative at a loss of $9.4 million, compared to a positive $0.9 million a year earlier.

The stock trades with a beta of 3.2, meaning it moves about three times faster than the broader market. When AI stocks face pressure, BBAI tends to feel it harder than most.

Dilution Worries Mount

Beyond the weak quarterly results, investors are increasingly worried about share dilution. BigBear.ai raised approximately $293 million through at-the-market equity offerings in 2025.

That massive capital raise helped the company build a cash balance of $456.6 million as of September 30. The company needs this cash to fund its $250 million acquisition of Ask Sage.

But all that money came at a cost to existing shareholders. In December, the board took things a step further.

They increased authorized common shares from 500 million to 1 billion. That move effectively doubled the company’s capacity to issue new stock without needing another shareholder vote.

Market watchers see this as a clear signal that more dilution is likely coming. If the Ask Sage deal requires additional funding or government contracts don’t deliver as expected, the company could tap equity markets again.

Government Backlog Provides Some Hope

Not everything in the earnings report was gloomy. The company’s backlog expanded to $376 million as of September 30.

This backlog suggests potential future revenue if BigBear.ai can convert government bookings into actual orders. The company maintained its full-year 2025 revenue outlook of $125 million to $140 million.

Analyst coverage on the stock remains mixed. Some firms maintain “Strong Buy” ratings, pointing to the company’s growth potential in AI and government contracts.

Others have issued hold ratings and expressed caution about slowing revenue growth. Execution risk remains a key concern among the more bearish analysts.

The broader AI sector also faced headwinds on Monday. The S&P 500 slipped 0.3% as investors rotated away from expensive technology names.

Companies like Broadcom and Oracle led the retreat after issuing disappointing guidance last week. Sentiment around AI infrastructure spending has turned more cautious in recent weeks.

As of September 30, BigBear.ai held $456.6 million in cash and reaffirmed its full-year revenue guidance of $125 million to $140 million despite the third-quarter miss.

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