BWX TECHNOLOGIES INC (BWXT) Q1 2026 Earnings Call Transcript
BWX Technologies, Inc. manufactures and sells nuclear components in the United States, Canada, and internationally. It operates through two segments, Government Operations and Commercial Operations. The company manufactures precision naval nuclear components, reactors, and nuclear fuel; close-tolerance and high-quality equipment for nuclear applications; critical nuclear components, fuels and assemblies for government and limited other uses; down blend government stockpiles of uranium; and fabricate fuel-bearing precision components. It also supplies proprietary and sole-source valves, manifolds, and fittings to naval and commercial shipping customers; research reactor fuel elements for colleges, universities, and national laboratories; and components for defense applications. In addition, the company manufactures commercial nuclear steam generators, nuclear fuel, fuel handling systems, pressure vessels, reactor components, heat exchangers, tooling delivery systems; and containers for the storage of nuclear fuel and other high-level nuclear waste. Further, it supplies nuclear fuel, fuel handling systems, tooling delivery systems, nuclear-grade materials and precisely machined components; and manufactures medical radioisotopes, radiopharmaceuticals, and medical devices. Additionally, it provides specialized engineering services that include structural component design, 3-D thermal-hydraulic engineering analysis, weld and robotic process development, electrical and controls engineering and metallurgy and materials engineering; in-plant inspection, maintenance and modification services; and non-destructive examination and tooling/repair solutions. It also offers nuclear power plant lifecycle support services. The company was formerly known as The Babcock & Wilcox Company and changed its name to BWX Technologies, Inc. in June 2015. BWX Technologies, Inc. was founded in 1867 and is headquartered in Lynchburg, Virginia.
BWXT delivered a record 2025 with strong organic/commercial momentum and provided 2026 guidance for double-digit growth and margin expansion across segments.
⭐ Key Highlights
✔Positive Signals
- 2025 revenue up 18%, adjusted EBITDA up 15%, and EPS up 20% versus guidance
- Backlog of $7.3 billion, +50% YoY, reflecting strong demand across segments
- Strategic acquisitions (AOT, Kinectrics) enabling large upcoming awards (HPDU, depleted uranium) and AP1000 ownership engineering role
- 2026 guidance implies high-teens revenue growth and double-digit EBITDA growth with improved mix
- Capital allocation flexibility via convertible debt, debt reduction, and the potential for additional M&A
✖Negative Signals
- Government operations segment expected margin decline in 2026 due to ramp of new programs with front-loaded costs
- First-quarter 2026 EBITDA likely flat to up slightly due to seasonality and ramping of new programs
- 2026 tax rate higher (~22%) due to international earnings mix
- Front-end margin pressure on new government programs before ramp and milestones improve profitability
- Tech 99 and FDA-related medical product issues create potential upside but not included in 2026 guidance
📊Financial Results
- Q4 revenue $886 million, up 19% YoY; organic revenue up 4%.
- Adjusted EBITDA $148 million, up 13% YoY; EBITDA margin impacted by segment mix but improved sequentially in Commercial Ops.
- Adjusted EPS $1.08, up 17%; tax rate 19.5% in Q4; full-year tax rate 20.4% due to R&D credits, expected to ~22% in 2026.
- Full-year free cash flow $295 million, up 16%; 2025 CapEx $185 million (5.8% of sales).
- Convertible debt offering of $1.25 billion completed; improved liquidity to $1.7 billion; debt cost reduced and facility terms expanded.
🔮Future Guidance
- 2026 revenue guidance of approximately $3.75 billion, up high-teens year over year (in line with prior November outlook).
- Adjusted EBITDA guidance of $645–$660 million, up low-to-mid teens; government margins expected to be slightly lower due to new program ramp, commercial margins to rebound toward historical levels.
- First quarter 2026: solid year-over-year organic revenue growth; EBITDA expected to be flat to slightly higher due to seasonality and mix.
- Free cash flow guidance of $305–$320 million for 2026, reflecting low-to-mid-teens operating cash flow growth.
💡Interesting Insights
- Rex Geveden outlined a three-phase internal AI strategy (phase 1: manufacturing process improvements with sensors, phase 2: large language models for functional efficiencies, phase 3: factory automation with digital twins and digitized quality records), highlighting a clear path to digitizing the supply chain and manufacturing footprint.
Detailed Analysis
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