BigBear.ai, Inc.

Thank you for joining the Big Bear AI fourth quarter and full year 2022 conference call. This call is being recorded. At this time, all participants are in a listen-only mode, and a question-and-answer session will follow the presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. I will now turn the call over to Shane Karp, Vice President, Marketing and Communications. Please go ahead, Mr. Karp.

Good afternoon, everyone, and welcome to Big Bear AI's 2022 fourth quarter and full year earnings conference call. I'm joined by Mandy Long, our chief executive officer, and Julie Pfeffer, our chief financial officer. During the call today, we may make certain forward-looking statements. Listeners are cautioned not to put undue reliance on the forward-looking statements, and Big Bear AI specifically disclaims any obligation to update the forward-looking statements that may be discussed during the call. Many factors could cause actual events to differ materially from the forward-looking statements made on the call. These statements are based on current expectations and assumptions, and as a result, are subject to risks and uncertainties. For more information about these risks and uncertainties, please refer to the forward-looking statements section on the earnings press release issued today and our SEC filing. 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. Now, I'd like to turn the call over to Mandy.

Thank you, Shane, and thank you all for joining today's call. In the fourth quarter, we achieved our 2022 financial outlook and took significant steps to bolster our fundamentals, and set the stage for long-term growth. As discussed in previous calls, we have continued to take material steps forward in reducing our recurring operating expenses and improving our liquidity position. Less than six months into my role as CEO, we are much healthier. We've cleaned up our operating structure, funded the company in a very tough market, and completed a comprehensive technology assessment to baseline our portfolio. We now have a clearer understanding of our capabilities and how they can be applied to the markets that we service. I see 2023 as a critical foundational year for us as we support some of the challenging things that are happening in the world right now and strive to deliver clarity for the world's most complex decisions. We are in the midst of an unprecedented wave of excitement around artificial intelligence. Key decision makers and leaders across government and industry are recognizing the necessity of at-scale production grade adoption of AI-powered decision support. Big Bear's capabilities and decades-long heritage in this field gives us a competitive advantage in delivering a higher form of reliable, scalable decision intelligence solutions. We're seeing an explosion of interest in what we provide, and we are continuing to foster our innovation pipeline to adapt and extend our capabilities to serve our markets. We will continue to focus on delivering solutions in three core markets, complex global supply chains and logistics, autonomous systems, and cyber. We anticipate the government investment in AI solutions will continue to grow. In November 2022, the U.S. Department of Defense released its National Defense Strategy, which stated that the government would continue to invest in AI and aggressively seek to fill technology gaps in its AI specialization. In December 2022, the U.S. National Defense Spending Bill was passed, allotting over $800 billion in funding to our national security and recommending boosted spending on AI solutions to protect our nation from increasingly sophisticated cyber threats. And just last week, President Biden put forward his 2024 defense budget proposal, which included a record amount of $145 billion for research and development. At Big Bear AI, we are uniquely positioned and view the unfolding global market dynamics as an opportunity for us to be a catalyst. There will be millions of models that might play a role in the orchestra of how we'll achieve true augmented decision intelligence in high stakes environments. And there will not be a single company that provides all of these models. An organization needs to step up for production grade AI adoption to happen at scale. In other words, this orchestra will need a conductor. That is the role that we will play. We will be the conductor. We have been a trusted partner to critical government agencies for decades. Throughout 2022, we deepened these relationships and see examples of this in selections such as the $900 million 10-year multiple award Air Force IDIQ contract vehicle, where we will have the opportunity to compete for task orders. With the integration of our legacy companies, we have the capabilities to compete in a more substantial contracting space and have a seat at the table as an established prime contractor for innovative government and defense work. We are showcasing our strengths in complex global supply chains and logistics through our Global Force Information Management, or GFIM, phase two work, where our solutions are empowering senior leaders and combatant commanders to man, equip, train, ready, and resource the Army more effectively by transitioning 14 legacy systems into a single solution to provide real-time, holistic data for 160,000 users. This phase two work is significant in that it builds on our successful GFRIM prototype efforts during phase one and accelerated what was supposed to be a $2 million award for a second prototype into a $14.8 million award to deliver a minimum viable product. Additionally, the phase two award accelerates the program timeline while naming Big Bear as the sole prime contractor to deliver this critical capability and puts us in a strong position to receive the Phase III Production Award. We are continuing to demonstrate our expertise in autonomous systems through our participation in the Digital Horizon Event Series, which supports the Navy's efforts to integrate AI technologies in unmanned surface vessels. We look forward to showcasing our threat intelligence and situational awareness capabilities at IMX 23 the largest maritime exercise in the Middle East. Our experience and lessons learned through these events sets us up to be a premier partner with the Department of Defense as they tackle their broader JADC2 strategy, a multi-billion dollar effort to use AI, ML, and predictive analytics to better sense, make sense, and act at the speed of relevance. We are also providing cyber solutions across sectors, Our SpaceCrest partnership with Redwire is delivering a suite of space cybersecurity solutions to Mineric in the development of an advanced satellite communications program sponsored by DARPA. Our specialized reverse engineering capabilities provide critical insights to our customers as they look to manage the increasingly complex and threat-heavy environment of cybersecurity. We are continuing to build our pipeline in the complex manufacturing, shipping, and shipbuilding industries, and we are making significant progress. Our process simulation and modeling solutions help companies manage massive and complex physical and information environments, delivering clarity on facility equipment and personnel systems, forecasting requirements, and simulating real-world situations. Another focus area for us in the back half of 2022 was the implementation of the cost savings initiative we discussed on our last two calls and began implementing in the third quarter. The fourth quarter was our first full quarter to benefit from our restructuring, and we are pleased to have delivered on our revenue and adjusted EBITDA targets despite a continued challenging macro environment. We continued our cost reduction actions in Q4 and Q1 23, taking additional steps to reduce our overhead spend and improve our financial position. Additionally, in the first quarter of 2023, we closed a private placement for $25 million in a very challenging market, bolstering our balance sheet and providing us with sufficient liquidity to execute on our strategy in 2023. We are in a solid position and will continue to keep an open eye towards opportunities to grow our portfolio inorganically, in the coming quarters as well. With that, I will turn the call to Julie for a detailed review of our financials.