Explaining a bad exam result at my annual review
I see two possibilities. One is that the exam was just more difficult than it was intended to be and that others are in the same situation and so it won't really affect you much. Sometimes questions on exams are misstated and lead students astray, for example.
My advice it that sort of situation, in general but too late to implement now, is to say something sensible for every question if possible, rather than just leaving things blank. That might be helpful in future.
The other possibility is that you were expected to know/do things that you weren't prepared for. In that situation, there isn't really much to say other than that you weren't prepared and intend to do better it future.
But in this situation, you can also ask for advice from faculty about what sort of actions you might have taken to avoid the problem. They might have some actual advice and know both you and the topic.
And a single failure on a single exam (other than a qualifying exam) isn't disqualifying for most. It happens. You may just have to move on.