BigBear.ai, Inc.

Thank you for joining the Big Bear AI first quarter 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 2023 first quarter 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 this 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 statement section of 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. The results we posted in Q1 are a testament to our capabilities across autonomous systems, cybersecurity, and supply chains and logistics. Our 16% revenue growth year over year, despite a challenging macroeconomic environment, is a remarkable achievement for the entire team and speaks volumes to the value we are bringing to our clients. We're winning in complex markets, setting us apart in the industries we operate in, and positioning us for long-term growth. Our established position and ability to execute are evident in new partnerships, new wins, and extensions of our business with existing customers. As you may have seen in our recent press release, we are excited about our new strategic partnership with L3Harris. Big Bear AI is now their exclusive partner to deliver AI, ML-based forecasting, situational awareness analytics, and computer vision capabilities for L3Harris unmanned service vessels. This integrated and collaborative approach brings significant long-term opportunities, and our partnership with L3Harris is another proof point in our continued focus on execution and long-term growth. We are also continuing to bring our autonomous system software capabilities to market, like with the US Navy, where our analytics and computer vision capabilities continue to be assessed and demonstrated in live exercises, as shown most recently with Task Force 59 and IMX 2023. We are incredibly excited by the Navy's April announcement to continue to scale unmanned platforms, integrating unmanned systems into their fourth fleet in Central and South America, and operationalizing the concept Task Force 59 has worked tirelessly to develop. In addition, we believe the Navy's decision to scale unmanned platforms to the fourth fleet and their engagement with us through Task Force 59 underscores the importance of autonomous systems in future battlefields. Our advanced AI ML capabilities enable autonomous systems to operate with unparalleled efficiency and safety, supporting higher-risk missions, expanding operational reach, and most importantly, saving lives. As the battle space continues to evolve, autonomous systems will play an increasingly significant role. As a leader in providing AI, ML-based forecasting, situational awareness analytics, and computer vision capabilities for these autonomous systems, our opportunities to support this type of work are only just getting started. We're continuing to see more rapid adoption of AI and ML-based solutions and technologies throughout the entire Department of Defense. Innovative approaches to acquiring these AI-focused capabilities, such as the Chief Digital and Artificial Intelligence Office's Trade Win initiative, provide a marketplace for DoD leaders to rapidly source, fund, and develop solutions in the AIML, digital, and data analytics spaces. We are excited to announce the recent addition of two of our products to the Tradewind marketplace. Observe is our massive distributed data collection capability focused on capturing publicly available information at scale and has a proven track record of providing actionable decision intelligence for our customers for more than eight years. Additionally, our AIML-based forecasting, situational awareness analytics, and computer vision capabilities originally developed for autonomous systems will now be widely available for many other DoD use cases. We look forward to onboarding other portfolio solutions into the Tradewind marketplace in the coming weeks and months. This is all in the service of supporting the speed, efficacy, and accuracy of our customers' decision-making processes. We continue to operationalize artificial intelligence and machine learning at scale by creating order from complex data, identifying blind spots, and building predictive outcomes. And we're not just winning at the federal level and in defense. The pandemic and subsequent disruptions demonstrated the dramatic impact of uncertainties on supply chains, and establish the need for intelligent contingency plans to minimize the impact on operations. AI has the power to revolutionize the way we handle logistics, optimize production processes, and improve overall efficiency. Through decision intelligence algorithms, machine learning, and real-time data analytics, we can better forecast demand, minimize inventory costs, and ensure on-time delivery of products. AI can play a similarly impactful role in manufacturing, helping to detect quality issues early on, improve product design, automate repetitive tasks, and help free up valuable time and resources for higher level work. Ultimately, we're looking to provide a higher form of decision intelligence, empowering businesses to make smarter, data-driven decisions that streamline operations and help drive profitability. We have already been making a lot of progress. We recently extended our relationship with a global Fortune 500 food company that has been using Big Bear AI simulation tools since 2020. They work with us to extend discrete event simulation modeling to evaluate production of existing lines and also support design, test, and evaluation of potentially new production areas. In support of these solutions, we've integrated resources directly with the company to perform the project management and data collection responsibilities to ensure successful and on-time delivery of set objectives. The simulation solutions that are being created seek to identify bottlenecks and opportunities for process improvement, while also providing the confidence that any new design or build option is tested thoroughly before any major investments are made. We're enabling similar decision-making in a large diesel engine manufacturer that's looking to allocate capital to phase out old designs and drive extensive design work, capital equipment deployment, and plant modification. Given the capital and resource-intensive nature of this endeavor, extensive verification and validation efforts of the proposed changes must be executed. To unleash their success, we're building a comprehensive discrete event simulation model of their current and future state production systems enabling scenario analysis and experimentation in a digital twin. As a result, our customer will be able to deploy capital and effect change faster and with greater confidence in success. Our work in healthcare continues to pay off as we signed a number of new contracts with hospitals, such as the Children's Hospital Colorado and Thomas Jefferson University Hospitals for Future Flow RX and MedModel. For Thomas Jefferson, we designed a department-level simulation to support future state operations for observation, extended recovery patients, and to inform long-term staffing needs. This is incredibly important as the staffing crisis in healthcare continues and as the pressure on hospitals and health systems increases, with the aging population needing more care. While it's easy to focus on the headline wins, the foundational work we are doing to ensure our long-term success continues to be a part of the team's focus. During the quarter, we continued our move towards a streamlined approach with a simplified reporting framework and a sustained rigor on cost management. Our work this past quarter focused on improving our operating processes and tightly managing discretionary spending. Cost discipline will remain a priority as it forces rigor and prioritization around decision-making and unlocks growth opportunities by fueling the most impactful areas of our business while also putting us in a much better position to deliver meaningful shareholder returns over time. With much of our restructuring now behind us, our new operating model is positioned for positive operational cash flows in the back half of 2023. Bigger picture, AI continues to experience an unprecedented wave of excitement as the entire ecosystem of enterprise application looks for new ways to leverage this disruptive technology. Winners and losers will emerge from this period of rapid maturation, and those with the ability to grow and execute at scale will be well-positioned to take share across various end markets. The industry has received a lot of attention over the last year, and while the race is only getting going, Big Bear AI has a meaningful head start. It is with this head start that we've been able to make strategic hires, such as Norm Laudermilk, who will be taking over the role of Chief Operating Officer. Norm has 30 years of technical and executive level experience and has served in a number of roles, including Chief Operating Officer, Chief Technology Officer, and Chief Information Security Officer. He has experience in both startup and Fortune 50 companies across federal and commercial markets. We are also promoting Greg Goldwater to Chief Growth Officer, As Chief Growth Officer, Greg will continue to develop strategies to drive growth across the entire Big Bear AI business and identify new opportunities that align with our capabilities and our core mission to deliver clarity for the world's most complex decisions. Lastly, many of you have likely heard the recent calls for pausing AI development. My thoughts on this are simple. Powerful technology that has the ability to change the world does not come without risk. And pausing is the option that our adversaries would love for us to choose. As an organization who works every day to protect our nation and what it stands for, our role is to leverage these capabilities responsibly and ethically and put them to work where they can make a difference in our national security and in the other environments that we service. That is what we do. and it is why we are the company that our customers call when the hardest problems need to be solved. We have been a leader in providing a higher form of decision intelligence for more than 20 years. We are our customers' North Star in this AI-driven industrial revolution, and we are doing so with a strong foundation to ensure a lasting impact for the company and for our shareholders. We have a leaner, more nimble business today and we will hire and retain those who are here for the mission and can do things that others cannot. We are now stronger and more resilient than we were six months ago, and we are just getting started. With that, I will turn the call over to Julie for a detailed review of our financials.