C3.ai Outshines BigBear.ai in Financial Stability and Growth Potential

The AI software sector is fraught with volatility, but not all players are created equal. Investors seeking a sustainable long-term bet must weigh financial discipline against growth ambition. When comparing BigBear.ai and C3.ai, the latter emerges as the safer, more compelling option due to its superior revenue trajectory, diversified customer base, and stronger balance sheet. Here's why.

Revenue Growth: C3.ai's Consistency vs. BigBear.ai's Stagnation

C3.ai has established itself as a revenue powerhouse, with 26% year-over-year quarterly growth in its fiscal Q4 2025 ($108.7 million vs. $86.6 million) and 25% annual growth to $389.1 million in fiscal 2025. This momentum is driven by its subscription model, which now accounts for 84% of annual revenue, and strategic partnerships with enterprises like Baker Hughes and the U.S. Air Force.

BigBear.ai, by contrast, reported only 5% year-over-year revenue growth in Q1 2025 ($34.8 million vs. $33.1 million). Its full-year 2024 revenue grew just 2% to $158.2 million from $155.1 million in 2023—a stark contrast to C3's 25% jump.

Cash Flow and Debt: C3.ai's Prudent Financial Position

C3.ai's financial health is underscored by its positive cash flow dynamics. With a focus on subscription revenue and a growing backlog of agreements (up 68% to 264 total in FY2025), C3 is scaling without excessive reliance on debt.

BigBear.ai, however, faces ongoing cash flow challenges. Despite reducing net debt from $150 million to $27 million in early 2025, its adjusted EBITDA remains negative (-$2.4 million in 2024), and it relies heavily on non-cash adjustments to manage losses. Its backlog of $418 million—a 148% jump from 2023—is a positive sign, but this pipeline depends largely on U.S. government contracts (e.g., Homeland Security), which could be vulnerable to budget cuts or shifting priorities.

Customer Diversification: C3.ai's Broad Base vs. BigBear.ai's Government Dependence

C3.ai's diversification is its strongest suit. It now serves 19 industries, with non-Oil & Gas revenue surging 48% in FY2025. Its Federal sector (20% of bookings) is balanced by explosive growth in State/Local Government (over 100% revenue growth) and commercial sectors like healthcare and manufacturing.

BigBear.ai, however, remains overly reliant on U.S. government contracts, including its $158.2 million FY2024 revenue tied to defense and homeland security. This concentration poses significant risk, as federal budgets are subject to political whims and sequestration threats.

Valuation: C3.ai Offers Better Value at Lower P/S Ratios

At current market caps (assuming C3 at ~$2.5B and BigBear at ~$0.4B), C3.ai's P/S ratio of ~6.4x (2025 revenue) is far more compelling than BigBear's P/S of ~2.5x. While BigBear's valuation appears cheaper, its stagnant growth and dependency on government funding make it riskier. C3's premium is justified by its predictable revenue streams and 25%+ annual growth trajectory, with FY2026 guidance projecting $447.5M–$484.5M in revenue.

Investment Recommendation

C3.ai is the safer, more sustainable bet for long-term investors. Its combination of:
- High revenue growth (25–26% annually),
- Diversified customer base,
- Strong balance sheet, and
- Attractive valuation

positions it to weather market volatility better than BigBear.ai, which remains tethered to government spending. While BigBear's backlog is a positive, its lack of consistent growth and reliance on a single customer segment make it a riskier proposition.

For conservative investors, C3.ai's enterprise software model and enterprise-grade contracts offer stability. For growth investors, its 22%+ compound annual growth rate (CAGR) in subscription revenue through 2025 provides a clear path to outperformance.

BigBear.ai may find short-term opportunities in defense contracts, but its valuation already reflects this, and its lack of a recurring revenue model leaves it exposed to macroeconomic headwinds.

Final Verdict: C3.ai (ticker: AI) is the superior investment for both stability and growth.

This analysis is based on publicly available financial data as of June 2025. Always consult a financial advisor before making investment decisions.