C3.ai delivered a notable uptick in trading activity following its latest quarterly report, registering a 2% gain over the prior session. The enterprise reported a 15% year-over-year increase in subscription billings, driven by strong demand for its suite of enterprise-scale AI applications in manufacturing and financial services. In the quarter, backlog rose to $185 million, up from $160 million one year earlier, reflecting new multi-year contracts with a leading global insurer and a Fortune 100 energy provider. Gross margin improved by 350 basis points to 72.5%, benefiting from improved software utilization and optimized cloud infrastructure costs. The company also expanded its partner ecosystem, announcing integrations with two major cloud hyperscalers and securing a partnership with a top five global systems integrator to co-develop AI-powered predictive maintenance solutions.

BigBear.ai’s latest guidance predicts a revenue decline of 11% to 21% in fiscal 2025, reflecting disruptions in key government contracts and a shrinking backlog that fell from $385 million in Q1 to $376 million in Q3. In the first nine months of fiscal 2025, gross margin contracted by 240 basis points to 22.8%, while adjusted EBITDA margin deteriorated sharply to negative 24.8%, up from negative 3.8% a year earlier. The company has undergone three CEO transitions since its SPAC merger and remains unprofitable. To bolster its AI portfolio, management closed a $250 million cash acquisition of Ask Sage, a generative AI tool provider, in December, but analysts warn that most revenue gains in 2026 will stem from that deal rather than organic growth. For 2026, consensus forecasts call for a 23% rebound in top-line to roughly $164 million, yet adjusted EBITDA is still expected to be negative, albeit improved. At an enterprise valuation of $2.4 billion, BigBear.ai trades at roughly 14 times projected fiscal 2026 sales, leaving investors questioning whether its core business can stabilize without further dilution or larger commercial wins.