Babcock NYSE: BW reported a sharply stronger first quarter of 2026, with management pointing to rising demand for power generation from utilities, industrial customers and AI data centers as a key driver of growth.
Chairman and CEO Kenneth Young said on the company’s earnings call that the quarter was “one of the strongest first quarter performances in recent company history.” Revenue and adjusted EBITDA both increased substantially from the prior-year period, while bookings and backlog expanded as B&W continued work tied to its Base Electron project in North Dakota and pursued additional data center-related opportunities.
Revenue and Adjusted EBITDA Rise
Chief Financial Officer Cameron Frymyer said consolidated revenue for the first quarter was $214.4 million, up from $148.6 million in the first quarter of 2025. He said the increase was primarily driven by large project volume, including $31 million from Base Electron, as well as increased electricity needs tied to fossil-fuel generation, AI data centers and expanding economies.
Young said revenue rose 44% year over year, while adjusted EBITDA from continuing operations was $16.1 million, up 296% from the first quarter of 2025. Frymyer said adjusted EBITDA compared with $4 million in the year-ago quarter.
The company reported an operating loss of $1.7 million, roughly flat with an operating loss of $1.8 million a year earlier. Net loss from continuing operations was $79.6 million, compared with a net loss of $15.6 million in the first quarter of 2025.
Management attributed the larger net loss to $81.8 million of non-cash warrant and other stock-related costs recorded during the quarter due to B&W’s stock performance. Excluding those items, the company reported adjusted net income from continuing operations of $2.2 million.
Bookings, Backlog and Pipeline Expand
Young said B&W’s total pipeline grew by more than 17% to over $14 billion during the quarter, including new AI data center opportunities. He said bookings reached $2.5 billion, an increase of more than 1,900% compared with the first quarter of 2025, while backlog was $2.7 billion, up 483% year over year.
Young said the company added more than $2 billion in additional AI data center opportunities from hyperscalers and utility customers. He also said B&W remains in active discussions with multiple AI data center customers regarding potential 2026 bookings.
During the Q&A portion of the call, Young said the pipeline increase is being driven significantly by data centers, but also by opportunities in coal-to-natural-gas conversions, large coal generation plant upgrades and environmental upgrades. He said some prospective data center-related projects are in the 300-megawatt to 500-megawatt range, while others could be in the 1-gigawatt to 2-gigawatt range.
Young added that B&W’s pipeline includes projects the company believes could close within the next three years, though not necessarily all with B&W. He said there are additional discussions around projects that are farther out and therefore not included in the stated pipeline.
Core Parts and Services Benefit From Baseload Demand
Management said B&W’s core parts and services business continues to benefit from increased use of baseload generation assets. Frymyer said the business delivered the strongest first-quarter revenue in recent history.
Young said rising electricity demand from consumers, industrial users and AI data centers is prompting utilities to recondition and recommission coal-fired generation assets. He said existing U.S. coal plants are operating at capacity factors of around 50%, leaving underutilized capacity available to support demand growth.
In response to an analyst question, Young said the company has “pretty good visibility” into outages expected later in the year, including work related to broader upgrades and environmental needs at coal plants. He said more utilities and customers are investing in coal plants because they are running longer and are needed for baseload generation.
Base Electron Project Advances
Young said the Base Electron project in North Dakota is progressing, with boiler manufacturing and steam turbine work moving forward. Siemens Energy continues turbine fabrication, while long-lead items such as boiler pressure parts are advancing as planned, he said.
Most construction activity, including civil and mechanical work, is scheduled for 2027 to 2028. Young said B&W will recognize more revenue from Base Electron this year as manufacturing and site-preparation milestones are completed, but the largest revenue ramp is expected next year when construction activity increases.
Asked whether B&W can support multiple large projects at once, Young said the company feels good about its current supply chain and has worked to establish capacity around the Base Electron project that could support other data center projects. He said the company is coordinating with manufacturers as it pursues opportunities involving different boiler and turbine sizes.
Debt Reduction and BrightLoop Initiatives
B&W also continued to reduce debt during the quarter. Young said the company paid off $15 million in outstanding bonds due in December 2026 and expects to fully pay off the remaining $69 million in those bonds “in a timely fashion.” He said secured debt and unsecured bonds were reduced by 87% in the first quarter, bringing net debt below 1 times trailing 12-month adjusted EBITDA.
Frymyer said total debt on the balance sheet at March 31, 2026, was $275.9 million, including unamortized fees and gains from a 2025 bond swap. Excluding those items and leases, secured debt and senior notes totaled $237.2 million, of which $69.1 million was current. Cash, cash equivalents and restricted cash totaled $194.8 million, resulting in net debt of $42.4 million against secured debt and senior notes.
Young said B&W is continuing work on its BrightLoop initiatives, including commercial development and efforts to improve operational effectiveness for producing low-cost hydrogen or steam. He said a commercial-scale demonstration of BrightLoop at the company’s Massillon, Ohio, project remains a key priority.
On guidance, Young said B&W kept its current outlook unchanged while it evaluates how much project activity can move into construction or manufacturing this year. He said there is “definitely potential for upside” to current guidance, but added that if some activity does not occur this year, it would move into next year.
About Babcock NYSE: BW
Babcock & Wilcox Enterprises, Inc NYSE: BW is a specialized provider of energy and environmental technologies and services serving power generation and heavy industrial markets. The company designs, manufactures and maintains critical components and systems that support the safe and efficient operation of both fossil-fuel and renewable power facilities. Its core offerings include industrial and utility boilers, environmental control systems for emissions reduction, and aftermarket support services ranging from inspection and maintenance to spare parts management.
In addition to its boiler and emissions control portfolio, Babcock & Wilcox Enterprises delivers lifecycle solutions aimed at enhancing plant performance and compliance.
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