BigBear.ai announced the addition of two new C-suite executives this week as the public company continues to push toward profitability.
The Columbia artificial intelligence company hired Norm Laudermilch as chief operating officer and promoted Vice President of Strategic Growth Greg Goldwater to chief growth officer, BigBear.ai said in a release Tuesday reporting its first quarter earnings. The duo will build off their more than 30 years of combined industry experience to work with CEO Amanda "Mandy" Long to move the company closer to a positive cash flow after rounds of layoffs and office closures.
Laudermilch will be compensated if BigBear.ai (NYSE: BBAI) is successful as his contract includes several performance-based bonuses, according to an offer letter BigBear.ai filed with the U.S. Securities and Exchange Commission. Laudermilch, who previously served as chief technology officer and chief cyber officer at Reston, Virginia-based LookingGlass Cyber Solutions, will earn a base salary of $425,000 annually. He will also be eligible for an annual bonus of 50% of his salary based on performance objectives.
Laudermilch will also receive various stock options as part of his compensation. That includes an initial award of $1.5 million in stock and a performance-based stock award of $500,000 on Dec. 31, based on a successful brand relaunch and execution plan and his ability to organize BigBear.ai within its budget. He'll also receive a recurring annual grant of 50% of his base salary in the form of stock.
BigBear.ai saw its stock skyrocket earlier this year after winning part of a $900 million contract, with shares rising 260% in a single day on Jan. 12. The stock price has come down dramatically since then, falling from a high of $6.11 a share in February to close at $2.51 on Thursday.
Terms of Goldwater’s promotion were not disclosed.
The two are joining a company that is making some steps toward profitability but is still struggling with cash burn. In the first quarter of 2023, BigBear.ai saw revenue of $42.2 million up 16% compared to $36.4 million in the first quarter of 2022. The company’s operating expenses were also 15% lower this year compared to the first quarter of 2022 after Long launched a major cost-cutting effort that included shutting down offices across the country.
Despite the higher revenue and decline in operating expenses, the company recorded a loss of $26.2 million or 19 cents a share, compared to $18.8 million, or 14 cents a share, in the prior-year quarter. BigBear.ai had $21.8 million in cash and cash equivalents on hand at the end of the quarter, an increase from the $12.6 million it had at the end of the year, but down from $60 million in the first quarter of 2022.
The company plans to be cash flow positive toward the end of 2023, Long said during the earnings call.
BigBear.ai is seeing growth in its private sector customers who are mostly drawn to the company's simulation software, Long said. The company signed several recent contracts with hospitals such as the Children’s Hospital of Colorado and Thomas Jefferson University Hospital in Philadelphia, winning over clients by offering software they can use to evaluate long-term staffing needs during a time when companies are facing hiring challenges.
"If you're an organization that's dealing with macroeconomic pressures, and you're looking for opportunities to deploy capital as efficiently as possible, to scale and optimize the work that you do, either from a manufacturing standpoint, or a distribution standpoint, or even how you're running your warehouses," Long said. "Our tools fit right into that."
The company is also making some progress on the federal contracting side of its business, the main revenue generator for the Columbia firm. BigBear.ai launched a partnership with L3Harris, one of the largest defense contractors in the country, Long announced on Tuesday. The U.S. Navy’s continued pursuit of unmanned systems also gives BigBear.ai a large possible market that could help the company gain profitability.
