BigBear.ai announced that it has closed a $250 million cash transaction to acquire Ask Sage, a generative‑AI platform that specializes in secure model deployment for defense and intelligence agencies. The deal was finalized on December 31 2025, giving BigBear.ai a proven generative‑AI capability that complements its existing edge‑AI decision‑intelligence suite and positions the company to meet the Pentagon’s growing demand for classified AI model distribution and orchestration.
Ask Sage, founded in 2023 and headquartered in Arlington, Virginia, has FedRAMP High accreditation and serves more than 100,000 users across 16,000 government teams and hundreds of commercial organizations. By integrating Ask Sage’s secure, compliant platform, BigBear.ai can offer a fully integrated AI stack that meets the stringent security requirements of U.S. government customers, thereby deepening its foothold in the defense‑AI market and creating a new revenue stream that is less sensitive to the cyclical nature of defense contracting.
The acquisition is expected to add approximately $25 million in non‑GAAP annual recurring revenue (ARR) in 2025, a six‑fold increase from Ask Sage’s 2024 ARR. BigBear.ai’s cash balance of $456.6 million as of September 30 2025 provided the liquidity to fund the purchase, but the outlay, combined with a 20 % year‑over‑year decline in Q3 2025 revenue, raises concerns about short‑term liquidity and execution risk. The company’s Q3 2025 revenue of $33.1 million fell 20 % from $41.5 million in Q3 2024, largely due to lower volumes on certain Army programs, while net income improved to $2.5 million from a $15.1 million loss the prior year, driven by non‑cash derivative adjustments.
Management highlighted that the Ask Sage acquisition accelerates BigBear.ai’s transition from a services‑heavy model to a recurring‑software business. CEO Kevin McAleenan said the deal “marks a significant milestone” and “accelerates our vision of delivering mission‑ready AI that customers can deploy with confidence.” The company maintains its full‑year 2025 revenue guidance of $125 million to $140 million, reflecting confidence in the combined platform’s ability to capture new government and commercial opportunities while managing the integration of Ask Sage’s technology and customer base.
Investors have responded cautiously, weighing the strategic upside of a secure AI platform against the company’s recent revenue contraction and the cash outlay required for the acquisition. Analysts note that while the deal positions BigBear.ai to compete more effectively in a rapidly expanding defense‑AI market, the integration risk and liquidity considerations remain key headwinds that could temper near‑term performance.
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