(NYSE: BBAI) Announces Fourth Quarter and Full Year 2021 Financial Results

  • Revenue of $145.6 million for the year ended December 31, 2021
  • Gross margin of 23% for the year ended December 31, 2021
  • Analytics segment adjusted gross margin of 45% for the year ended December 31, 2021
  • Nine new prime contracts won; ending total backlog of $465 million for the year
  • Successful completion of business combination with GigCapital4, Inc.
  • Added four seasoned key executives with deep industry expertise
  • 2022 financial outlook provided

COLUMBIA, Md., March 17, 2022— Holdings, Inc. (NYSE: BBAI) (“” or the “Company“), a leading provider of AI-powered analytics and cyber engineering solutions, today announced financial results for the fourth quarter and full year ended December 31, 2021.

“The growth of our federal Analytics business and new commercial opportunities are fueling our move toward more scalable, high growth, technology-first solutions and products,” said CEO Dr. Reggie Brothers. “We have a deep bench of top-tier talent with domain expertise across our product, engineering, and sales & marketing functions, and we are well positioned to execute our commercial SaaS strategy in 2022. Our government business continues to thrive, providing a solid foundation for R&D innovation in areas that resonate with the public and private sectors. 2021 was a milestone year for, and we are looking forward to even more exciting growth opportunities in 2022.”

Financial Highlights

  • Revenue of $33.5 million in the fourth quarter and $145.6 million for the year ended 2021
  • Gross margin of 11% in the fourth quarter, largely due to transaction-related stock-based compensation, and 23% for the year ended 2021
  • Non-GAAP adjusted gross margin of 34% for the Analytics segment and 28% for the Cyber & Engineering segment in the fourth quarter and 45% and 23% for the year ended 2021, respectively
  • Net loss of $114.8 million in the fourth quarter and $123.6 million for the year ended 2021, reflective of $61 million of stock-based compensation expense from vesting that occurred upon the merger
  • Non-GAAP adjusted EBITDA* of $(2.3) million in the fourth quarter and $4.9 million for the year ended 2021
  • Ending backlog of $465 million
  • Cash and cash equivalents of $68.9 million as of December 31, 2021

“Our aggressive investment strategy has put us in a remarkable position to capture new growth opportunities, while also growing our core business among federal customers,” said CFO Josh Kinley. “We added new contracts and customers throughout the year, resulting in a backlog of $465 million, which is three times the size of our entire revenue for 2021. Delayed government contract awards and the Continuing Resolution pushed some revenue into future periods, and this depressed near-term EBITDA, but our investments throughout the year have positioned the company for growth in 2022. The company continues to be EBITDA positive on an adjusted basis, and we are already seeing the results of our investments.”

Dr. Brothers continued, “We will continue to rely on our strong services business as a predictable source of revenue as we ramp up our commercial business toward the latter half of the year. The geopolitical climate today is increasing demand for technical solutions, operational support, and expert guidance among our federal customers. Our significant backlog, which is 14% higher than last year, multiple new customer wins, and 100% customer retention rate provide strong momentum for the entire business in 2022.”

Financial Outlook

The following information 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. For additional factors that may impact the Company’s actual results, refer to the “Forward-Looking Statements” section in this release.

For the year-ended December 31, 2022, the Company is projecting:

  • Revenue between $175 million and $205 million, including approximately $20 million of commercial revenue
  • Positive Adjusted EBITDA*

“We will leverage our history of strong organic growth and strategic M&A to make 2022 a transformational year for the company,” Dr. Brothers continued. “We expect to grow revenue substantially among commercial customers, positioning the company for sustainable, highly-profitable revenue in a growing addressable market.”

The Company notes that 2022 projections reflect known impacts from the COVID-19 pandemic based on the Company’s understanding at the time of this news release and its experience to date. Internal analysis of federal solicitations in the Company’s market showed that the time between solicitation and contract award increased from 290 days to more than 600 days between 2019 and 2021. COVID led to delays in government contract awards in 2020 and 2021, and the Company cannot predict how the pandemic will evolve or what impact it will continue to have.

Although the Company does provide guidance for adjusted EBITDA* (which is a non-GAAP financial measure), it is not able to forecast the most directly comparable measure calculated and presented in accordance with GAAP without unreasonable effort. Certain elements of the composition of the GAAP amounts are not predictable, making it impracticable for the Company to forecast. As a result, no GAAP guidance or reconciliation of the Company’s adjusted EBITDA* guidance is provided. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a potentially significant impact on its future GAAP financial results. The outlook is based on certain assumptions that are subject to the risk factors discussed in the Company’s filings with the Securities and Exchange Commission (“SEC“).

*Refer to the “Non-GAAP Financial Measures and Related Information” section in this press release.

Summary of Results for the Quarter and Year Ended December 31, 2021
$ thousands (expect per share amounts)Quarter Ended
December 31, 20211
Year Ended
December 31, 20211
Cost of revenues229,651111,510
Gross margin3,82734,068
Operating expenses:
Selling, general and administrative273,950106,507
Research and development1,8756,033
Operating (loss) income(71,998)(78,472)
Net increase in fair value of derivatives33,35333,353
Loss on extinguishment of debt2,8812,881
Interest expense2,1837,762
Other income, net1
(Loss) income before taxes(110,416)(122,468)
Income tax (benefit) expense4,3781,084
Net (loss) income$(114,794)$(123,552)
Basic and diluted (loss) income per share($1.02)($1.15)

1 Amounts presented are unaudited.

2 In the fourth quarter of 2021 the Company recognized stock-based compensation expense of $60.3 million, of which $6.9 million was recognized in cost of revenues and $53.4 million was recognized in selling, general and administrative expenses, related to legacy equity awards that vested upon the consummation of the Merger.

EBITDA* and Adjusted EBITDA* for the Quarter and Year Ended December 31, 2021
$ thousandsQuarter Ended
December 31,
Year Ended
December 31,
Net (loss) income$(114,794)$(123,552)
Interest expense2,1837,762
Income tax (benefit) expense4,3781,084
Depreciation and amortization1,8307,262
Equity-based compensation260,52960,615
Net increase in fair value of derivatives333,35333,353
Loss on debt extinguishment42,8812,881
Transaction bonuses51,0891,089
Capital market advisory fees62,9616,917
Termination of legacy benefits71571,639
Management fees83181,001
Non-recurring integration costs95381,783
Commercial start-up costs102,2453,018
Adjusted EBITDA$(2,332)$4,852

1 Amounts presented are unaudited.

2 Equity-based compensation includes approximately $60.34 million related to legacy equity compensation plans, including Tranches that vested upon the successful consummation of the Business Combination.

3 The increase in fair value of derivatives primarily relates to the changes in the fair value of certain Forward Purchase Agreements that were entered into prior to the closing of the Business Combination.

4 Loss on extinguishment of debt consists of the derecognition of the remaining unamortized debt issuance costs related to the Antares Capital Credit Facility upon its settlement.

5 Bonuses paid to certain employees related to the closing of the Business Combination.

6 The Company incurred capital market and advisory fees related to advisors assisting with preparation for the Business Combination.

7 In the third quarter of 2021, the Company elected to terminate certain legacy employee incentive benefits with final payments made in the fourth quarter of 2021.

8 Management and other related consulting fees paid to AE Partners. These fees will no longer be accrued or paid subsequent to the Business Combination.

Non-recurring internal integration costs related to the Business Combination.

10 Commercial start-up costs includes certain non-recurring expenses that are not capitalized associated with tailoring the Company’s software products for commercial customers and use cases.

Consolidated Balance Sheet as of December 31, 2021
$ thousandsDecember 31,
Current assets
Cash and cash equivalents$68,900
Restricted cash101,021
Accounts receivable, less allowance for doubtful accounts28,605
Contract assets628
Prepaid expenses and other current assets7,028
Total current assets206,182
Non-current assets
Property and equipment, net1,078
Intangible assets, net83,646
Other non-current assets780
Total assets$383,322
Liabilities and equity
Current liabilities
Accounts payable$5,475
Short-term debt, including current portion of long-term debt4,233
Accrued liabilities10,735
Contract liabilities4,207
Derivative liabilities44,827
Other current liabilities541
Total current liabilities70,018
Non-current liabilities
Long-term debt, net190,364
Deferred tax liabilities248
Other non-current liabilities324
Total liabilities260,954
Common stock14
Additional paid-in capital253,744
Accumulated deficit(131,390)
Total equity122,368
Total liabilities and equity$383,322

1 Amounts presented are unaudited.

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