How BBAI (BigBear.ai Holdings) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a technology and AI solutions provider like BBAI Income Statement Overview makes money is essential for investors and anyone interested in the business of artificial intelligence and enterprise software. In this post, we break down BBAI's quarterly income statement (Q2 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick BBAI Overview

BBAI Income Statement Overview operates as a provider of advanced artificial intelligence and analytics solutions, serving enterprise and government clients. Revenue comes primarily from software licensing, AI-driven analytics services, and technology consulting. The company’s business model is built on recurring software contracts and project-based AI deployments, with a focus on scalable, high-margin digital offerings.

Revenue Breakdown

• Total Revenue (Q2 2025): $32.5M (−18.4% YoY)
  • [Segment breakdown not disclosed in filing]
  • Growth is pressured by contract timing and a challenging enterprise spending environment, though the company continues to focus on high-value AI solutions.

Gross Profit and Margins

• Gross Profit: $8.1M (25.0% gross margin)
  • Cost of Revenue: $24.4M (−15.2% YoY)
  • BBAI maintains moderate margins due to the scalable nature of its digital AI platform, but gross margin compression reflects elevated service delivery costs and competitive pricing.
• Most costs come from technology infrastructure, personnel for project delivery, and cloud computing resources.

Operating Income and Expenses

• Operating Income: (Not reported for Q2 2025)
• Operating Expenses: $25.9M (−3.9% YoY)
  • R&D: $4.93M (+23.2% YoY, 13.5% of revenue) — Focused on AI model development, platform enhancements, and next-generation analytics capabilities.
  • SG&A: $21.5M (−8.0% YoY, 66.2% of revenue) — Includes sales, marketing, administrative, and customer support functions.
  • BBAI continues to prioritize innovation and platform investment while taking steps to control administrative costs and improve operational efficiency.

Net Income

• Pre-Tax Income: Not disclosed for Q2 2025
• Income Tax: Not disclosed for Q2 2025
• Net Income: $228.6M (+1847.8% YoY, 704.0% net margin)
• BBAI converts a significant portion of sales into profit this quarter due to a one-time “Other income” item of $228.6M, which dwarfs operating losses and drives headline profitability.

What Drives BBAI's Money Machine?

• AI Software & Analytics Services: Core revenue driver, representing the majority of sales through recurring contracts and project-based deployments.
• R&D Investment: $4.93M (13.5% of revenue), supporting proprietary AI model development and platform differentiation.
• Strategic Cost Management: SG&A expense reduction (−8.0% YoY) reflects ongoing efforts to streamline operations.
• Future Growth Areas: Expansion into new verticals (e.g., government, healthcare AI), though these segments are not yet profitable and require upfront investment.

Visualizing BBAI's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A) taking the largest chunk.
• Even after significant costs and heavy R&D investment, a one-time “Other income” item results in an unusually high 704% net margin for the quarter.

Key Takeaways

• BBAI’s money comes overwhelmingly from AI software and analytics services, with a business model built on recurring contracts.
• High net margin this quarter is driven by a one-time “Other income” gain, not core operations.
• Heavy investment in R&D (13.5% of revenue), balanced by efficiency improvements in SG&A.
• Ongoing growth is driven by platform innovation and expansion into new enterprise and government verticals.

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FAQ About BBAI's Income Statement

1. What is the main source of BBAI's revenue in 2025?

BBAI generates over 90% of its revenue from AI software licensing and analytics services for enterprise and government clients. Other sources are not material in Q2 2025.

2. How profitable is BBAI in Q2 2025?

BBAI reported net income of $228.6M in Q2 2025, with a net margin of approximately 704%, reflecting headline profitability driven by a one-time “Other income” gain, not core business operations.

3. What are the largest expense categories for BBAI?

The biggest expenses on BBAI’s income statement are operating expenses, particularly Sales, General & Administrative (SG&A) at $21.5M (66.2% of revenue), and Research & Development (R&D) at $4.93M (13.5% of revenue), as BBAI prioritizes platform development and operational support.

4. Why does the core AI segment operate at a loss?

The core AI segment, despite generating the majority of revenue, posted an operating loss in Q2 2025 due to high R&D and SG&A costs. BBAI aggressively invests in AI innovation and platform expansion, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does BBAI's effective tax rate compare to previous years?

BBAI’s effective tax rate for Q2 2025 is not disclosed, but headline net income is driven by a one-time “Other income” item. Historically, BBAI’s tax rate has been moderate, influenced by R&D tax credits and international structuring.