v3.26.1
Fair Value of Financial Instruments
3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
Cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable, short-term debt, accrued liabilities and other current liabilities are reflected on the condensed consolidated balance sheets at amounts that approximate fair value because of the short-term nature of these financial assets and liabilities.

Certain warrants that were issued at BigBear.ai’s initial public offering (“IPO Private Warrants”), warrants issued in BigBear.ai’s 2023 and 2024 private placement warrants (“PIPE Warrants”), and warrants issued in BigBear.ai’s 2023, 2024 and 2025 registered direct offering warrants (“RDO Warrants”) are valued using a modified Black-Scholes option pricing model (“OPM”). The conversion options of the 2026 Convertible Notes (“2026 Notes Conversion Option”) and 2029 Convertible Notes (“2029 Notes Conversion Option”) are valued using a binomial lattice convertible bond model and discounted cash flow method,
considering the traded price of the 2026 Convertible Notes and 2029 Convertible Notes, respectively, and other unobservable input assumptions. The 2026 Notes Conversion Option, 2029 Notes Conversion Option, IPO Private Warrants, PIPE Warrants and RDO Warrants are considered to be Level 3 fair value measurements. See Note 17—Derivatives for information on the Level 3 inputs used to value the IPO Private Warrants, PIPE Warrants, RDO Warrants, 2026 Notes Conversion Option, and the 2029 Notes Conversion Option.

Valuations of available for sale investments are provided by independent pricing service providers who have experience in valuing these securities and are compared to the average of quoted market prices obtained from independent brokers. These fair value measurements based on quoted prices in markets that are not active or for which all significant inputs are observable, directly or indirectly, and are considered to be Level 2 fair value measurements.

The table below presents the financial assets and liabilities measured at fair value:
March 31, 2026
Balance Sheet Caption
Level 1
Level 2Level 3Total
Recurring fair value measurements:
Available for sale investmentsAvailable for sale investments$— $330,748 $— $330,748 
2025 RDO WarrantsDerivative liabilities— — 9,612 9,612 
IPO Private WarrantsDerivative liabilities— — 37 37 
2026 Notes Conversion OptionDerivative liabilities— — 333 333 
2029 Notes Conversion OptionDerivative liabilities— — — — 
Total recurring fair value measurements:$— $330,748 $9,982 $340,730 
Nonrecurring fair value measurement:
Goodwill
Goodwill $— $— $238,737 $238,737 
December 31, 2025
Balance Sheet CaptionLevel 1Level 2Level 3Total
Recurring fair value measurements:
Available for sale investmentsAvailable for sale investments$— $374,410 $— $374,410 
2025 RDO WarrantsDerivative liabilities— — 16,437 16,437 
IPO Private WarrantsDerivative liabilities— — 128 128 
2026 Notes Conversion OptionDerivative liabilities— — 1,585 1,585 
2029 Notes Conversion OptionDerivative liabilities— — 98,756 98,756 
Total recurring fair value measurements:
$— $374,410 $116,906 $491,316 
Nonrecurring fair value measurement:
Goodwill
Goodwill $— $— $241,100 $241,100 
The changes in the fair value of the Level 3 liabilities are as follows:

2025 RDO warrantsIPO private warrants2026 Notes Conversion Option2029 Notes Conversion Option
December 31, 2025$16,437 $128 $1,585 $98,756 
Additions— — — — 
Changes in fair value(6,825)(91)(1,252)28,293 
Settlements— — — (127,049)
March 31, 2026$9,612 $37 $333 $—