BigBear.ai Holdings, Inc. ended its third quarter of 2025 with a revenue figure of US$33.1 million, representing a roughly 20 % drop year-over-year from US$41.5 million in the same period the prior year.
At the same time, the company announced a definitive agreement to acquire Ask Sage, Inc. for US$250 million, a move that stands out given the weaker quarter and shifting market dynamics.
The question becomes: why now and at this price? The timing, valuation, and execution risk all demand scrutiny.
A high-valuation deal in a weak quarter
Ask Sage is projected to deliver approximately US$25 million in annual recurring revenue (ARR) in 2025, representing about a six-fold increase over its 2024 ARR.
With BigBear.ai paying US$250 million, this implies a multiple of about 10× ARR, signalling strong confidence in Ask Sage’s trajectory and strategic fit.
Meanwhile, BigBear.ai is facing margin pressure. For Q3 2025 it reported a gross margin of 22.4 %, down from 25.9 % a year earlier.
The opportunity BigBear.ai is chasing spans far beyond its niche. According to recent estimates, the global agentic AI marketwas valued at around US$7.29 billion in 2025, and is projected to surge to roughly US$88.35 billion by 2032, implying a CAGR of ~42.8%.
At the same time, the broader AI in aerospace and defence market alone was estimated at US$27.91 billion in 2025, with expectations of reaching about US$42.67 billion by 2030. This dual tail-wind, agentic AI growth plus mission-critical defence AI spending, gives BigBear.ai a large runway, but also places it amid a crush of competitors angling for the same space.
Adjusted EBITDA for the quarter was a negative US$9.4 million, falling from a positive US$0.9 million in Q3 2024.
Despite the headwinds, BigBear.ai’s cash pile remains strong, with about US$456.6 million in cash and equivalents as of 30 September 2025.
The company continues to project full-year 2025 revenue of US$125-140 million, unchanged even after the acquisition announcement (which is not expected to materially impact 2025 results).
From an investor-perspective, paying 10× ARR for Ask Sage while your own business is under pressure suggests BigBear.ai is betting heavily on this acquisition being the turning point. The premium multiple reflects belief in Ask Sage’s growth, but also means high expectations for execution.
Betting on secure agentic AI, and the integration risks
Strategically, the deal makes sense: Ask Sage is built for secure, regulated, mission-critical environments, including defense and national-security agencies.
According to BigBear.ai’s CEO Kevin McAleenan, “By integrating Ask Sage with BigBear.ai, we are creating what the market has been asking for: a secure, integrated AI platform that connects software, data, and mission services in one place.”
Ask Sage reportedly supports more than 100,000 users across 16,000 government teams and “hundreds of commercial companies.”
But the risks are real. Integration of Ask Sage’s technology, customer base, compliance credentials and culture into BigBear.ai’s existing decision-intelligence business will demand flawless execution.
Plus, BigBear.ai has previously flagged dependencies on U.S. government contract timing. for instance, revenue softness due to delayed Army programs.
And although BigBear.ai’s cash position is healthy, the scale of this investment (~10 % of its market cap) adds pressure to ensure this becomes a growth engine.
The motivation appears to be doubling-down on agentic AI. By bringing Ask Sage into its fold, BigBear.ai signals its intent to become a full-stack provider in that space.
BigBear.ai isn’t alone in this race. Established players like Palantir Technologies are already entrenched in defence/AI contracts and reported a price-to-sales multiple of ~11× prior to BigBear’s recent deal. Plus, Palantir recently inked an Army agreement worth up to US$10 billion over 10 years, underscoring how large and committed the defence-AI contracts can be.
BigBear.ai’s acquisition of Ask Sage is bold given the backdrop of flat to declining revenue and margin pressure. But it also is pivot into higher-value, higher-barrier segments of the AI market. If BigBear.ai can integrate effectively and leverage Ask Sage’s traction, it may position itself as a leader in secure, mission-critical agentic AI.
The question for stakeholders now is whether this investment proves transformative, or whether the high multiple, delayed benefits and execution risk turn this into a cautionary story of overreach.
