Greetings, and welcome to the BigBear.ai Holdings Incorporated First Quarter ‘25 Earnings Call and Webcast. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce David Cronlow. Thank you, David. You may begin.

Thank you all for joining today for our first quarter 2025 Earnings Call. I'm joined today by our CEO, Kevin McAleenan and our CFO, Julie Peffer. During the call today, we may make certain forward-looking statements. Business cautions not to put undue reliance on forward-looking statements, and Big Bear specifically disclaims any obligation to update the forward-looking statements that may be discussed during this call. Many factors could cause actual events to differ materially from those forward-looking statements, statements that are based on current expectations and assumptions, and as a result are subject to risk and uncertainty. For more information about these risks and uncertainties, please refer to the forward-looking statements section of the earnings press release, which is due today on our SEC filings. We will also discuss some non-GAAP financial measures during the call today. These non-GAAP financial measures should not be considered a replacement for and should be read together with GAAP results. You can find the GAAP and non-GAAP reconciliations within our earnings release. Let me now turn it over to Kevin.

Thank you, David, and good afternoon, everyone. It's a privilege to be speaking with you for the first time as CEO of BigBear.ai. I'm honored to be leading this company at such a pivotal time and excited to share with you how we are positioning BigBear.ai for sustainable growth and long-term performance, and value. Today, I'll start by introducing myself and sharing my perspective on the market and our company. I'll walk through our strategic priorities for 2025 and I'll highlight our progress so far this year, both in terms of growth and key operational improvements. Julie will then review our financial results for the first quarter and I'll provide some brief closing thoughts. Before we begin, a note on our new format for our earnings process. As we begin this next chapter in BigBear.ai's growth, you will notice an evolution in the way we communicate. We are committed to providing more context, greater transparency and a sharper focus on aligning with all of our stakeholders, our shareholders, our employees, our customers and our partners. This approach reflects our sense of accountability to the missions we serve, our excitement to share how we are tackling opportunities and our desire to involve our stakeholders in the path to the long-term success of BigBear.ai. Let me start by sharing a bit about my background and how it shapes my leadership philosophy at BigBear.ai. During my time leading operational government organizations at U.S. Customs and Border Protection and later the Department of Homeland Security, I saw firsthand the power of equipping teams with the right tools and technology, clear direction, and strong support to succeed in complex high stakes environments. Those experiences taught me that technological innovation is critical, but alone, it is not enough. Success comes when technology is fused with operational…

Thank you, Kevin. Now let's turn to our first quarter results. As we have stated in the past, it's important to reemphasize that our revenue can be lumpy and can fluctuate meaningfully depending on the quarter in which contracts are awarded, milestones achieved or contracts complete. Revenue for the quarter was $34.8 million up 5% year-on-year compared to $33.1 million in the first quarter of 2024. This is primarily driven by additional revenue from the Department of Homeland Security and digital identity awards including products such as veriScan and Trueface. Gross profit for the quarter is up 6% from $7 billion in first quarter of 2024 to $7.4 million in the first quarter of 2025. Gross margin was 21.3% this quarter, which is a slight improvement from 21.1% in Q1 2024. Lower reported gross margin in both periods are impacted by higher annual incentive compensation that was settled in the form of stock awards issued in the first quarter, resulting in higher stock-based compensation noncash expense. If you look at adjusted gross margin, which removes the impact of equity compensation, it shows 28.6% in the first quarter of 2025 versus 29.1% in Q1 of 2024. Year-over-year, our R&D spend is up $3 million as we continue to invest in innovation and technology as you have seen over the last few quarters. We have recently progressed some R&D projects into general availability. Therefore, we have fewer projects being capitalized as part of the development cycle in Q1 of 2025. Net loss in the first quarter of 2025 was $62 million compared to the net loss of $127.8 million in the first quarter of 2024. The primary drivers of change in net loss were all non-cash items. In the first quarter of 2024, we booked goodwill impairment charges of $85 million, and…

Thank you, Julie. As we've shown today, we are positioning BigBear for the long-term, and as we reaffirm our guidance for the full year, I'd like to remind everyone of three key building blocks of the business today. I'd like to highlight our financial foundation as we did in last quarter's CEO letter. We closed the quarter with $108 million in cash and cash equivalents. This is a result of deliberate steps taken to strengthen our balance sheet, enhance liquidity and preserve the strategic flexibility we need to navigate near-term uncertainty while still investing decisively in our future growth. This strong financial footing allows us to be selective, patient, and opportunistic. Second, our backlog and pipeline remain healthy, closing the first quarter with a backlog of $385 million. We're taking a long view with our backlog and pipeline and focusing on building a portfolio of large multiyear programs and deep commercial relationships that provide stable compounding value over time. Third, innovation remains at the core of our identity. We are continuing to blend internal R&D with customer-funded development, while expanding our innovation ecosystem through partnerships that allow us to access cutting-edge technologies and talent across sectors. At BigBear.ai, we are building a durable, high-impact company at the forefront of AI-enabled national security and critical infrastructure modernization. We are doing so with focus, with urgency, and with a foundation that is designed to deliver lasting value for our customers, our partners, our employees, and our shareholders. Thank you for your time today on our first quarter call.