BWX Technologies Q3 Earnings Call Highlights

Key Points

• BWXT delivered strong Q3 results: Revenue rose 10% to $953 million, adjusted EBITDA increased 19% to $180 million, and adjusted EPS climbed 26% to $1.26. Free cash flow reached $151 million, prompting the company to raise the low end of its 2026 outlook to $350 million.
• Government and advanced nuclear businesses gained momentum: Government-segment EBITDA rose 22%, supported by special materials and naval nuclear operations. BWXT also advanced its HPDU facility, Project Pele, Army microreactor work, BANR projects and TRISO fuel agreements.
• Commercial expansion supports long-term growth: Commercial revenue grew 25%, while the Cambridge expansion increased heavy-component capacity by about 50%. Management maintained its 2030 targets of $5.5 billion–$6 billion in revenue and $1.1 billion–$1.2 billion in adjusted EBITDA.

BWX Technologies NYSE: BWXT reported third-quarter 2026 revenue growth of 10% and adjusted EBITDA growth of 19%, citing higher manufacturing volume, operational improvements and continued demand across government and commercial nuclear markets.

Revenue for the quarter totaled $953 million, including 7% organic growth, while adjusted EBITDA rose to $180 million. Adjusted earnings per share increased 26% year over year to $1.26. Free cash flow was $151 million, supported by earnings, favorable advance billings and working-capital management.

Chief Executive Officer Rex Geveden said the quarter reinforced the company’s long-term targets, which call for $5.5 billion to $6 billion in revenue and $1.1 billion to $1.2 billion in adjusted EBITDA by 2030. He pointed to government investment in strategic deterrence and energy resilience, as well as commercial customers’ investments in sustaining and expanding nuclear generation fleets.

Government Operations Margin Expands

Government operations revenue rose 4% in the quarter, led by special materials and advanced nuclear activity. Growth was partly offset by modestly lower naval propulsion revenue, which the company attributed to reduced materials procurement compared with a strong prior-year period.

Adjusted EBITDA in the segment increased 22% to $144 million, producing a 22.6% margin. Chief Financial Officer Mike Fitzgerald said the result reflected productivity gains and more efficient execution in the company’s core naval nuclear business, along with higher technical-services equity income.

In naval propulsion, BWXT booked its annual fuel contract valued at $189 million and is negotiating its next multiyear pricing agreement. Within special materials, the company said defense-fuels enrichment and high-purity depleted uranium, or HPDU, programs drove most of the government segment’s quarterly revenue growth.

BWXT is designing a high-enriched uranium enrichment facility in Erwin, Tennessee, and is industrializing centrifuge technology at its Oak Ridge facility. Geveden said the company remains on track to test a prototype centrifuge by the end of 2026.

The company also started construction of a large-scale HPDU facility in Jonesborough, Tennessee. The site supports BWXT’s $1.6 billion contract to produce 300 metric tons of HPDU annually and is expected to contribute meaningfully to revenue beginning in the fourth quarter and continuing through 2027.

Advanced Nuclear Awards and Fuel Production

BWXT completed the core barrel assembly for Project Pele and expects to deliver the reactor to Idaho National Laboratory in 2027. The company also secured selections for its BWXT Advanced Nuclear Reactor, or BANR, platform.

• BWXT was selected for the U.S. Army’s Janus program, which aims to deploy more than 20 microreactors of varying sizes across five military bases. Initial work includes site selection at Fort Campbell, regulatory activities and TRISO fuel production.
• Prodigy Clean Energy selected BANR for a transportable nuclear power plant project in Belledune, New Brunswick, marking BWXT’s first international microreactor win.
• BWXT signed a multiyear agreement to provide an initial allocation of one metric ton of TRISO fuel to Antares, its first large-scale commercial fuel customer.

Geveden said BWXT’s Lynchburg TRISO fuel line currently can produce a couple hundred kilograms annually, with capacity expected to increase at least fourfold through technology changes, capacity additions and operational improvements. A larger greenfield fuel investment would require more concrete demand, including potential needs from Kairos’ Hermes reactor and additional BANR orders, as well as commercial availability of high-assay low-enriched uranium.

Geveden also said BANR has a 22-megawatt electrical output and can be transported by rail, positioning it for applications including large military bases and industrial heat needs.

Commercial Growth and Manufacturing Expansion

Commercial operations revenue increased 25%, including 15% organic growth, driven by commercial power, Kinectrics and medical businesses, as well as the contribution from the PCG acquisition completed in early July. Segment adjusted EBITDA increased 17% to $41 million, while adjusted EBITDA margin was 13.2%.

The company completed an expansion of its Cambridge, Ontario, facility, increasing heavy-component manufacturing capacity by about 50%. BWXT said the expansion supports its backlog of CANDU life-extension work, small modular reactor projects and other awards.

In the U.S., BWXT is finalizing design details for a new commercial manufacturing facility for large steam generators and reactor pressure vessels. Geveden said the company intends to make a final investment decision by year-end and will proceed with the facility regardless of firm orders.

The PCG acquisition added nearly $500 million of backlog, according to Fitzgerald. He said about 75% to 80% of the acquired business remains related to naval work, while the company sees an opportunity to use underutilized capacity for commercial work. Management said PCG integration is progressing well and that it is identifying cost opportunities, though it did not provide specific synergy targets.

Guidance Maintained, Cash Flow Range Raised

BWXT raised the low end of its 2026 free-cash-flow outlook to a range of $350 million to $360 million. It maintained expectations for approximately $667 million in adjusted EBITDA and adjusted earnings per share of $4.72 to $4.77 at the midpoint of its prior guidance ranges.

For 2027, the company expects high-single-digit to low-double-digit growth in adjusted EBITDA and adjusted EPS. Government operations are expected to deliver high-single-digit to low-double-digit revenue and adjusted EBITDA growth, supported by special materials, naval propulsion and advanced nuclear activity.

Commercial operations are expected to generate high-single-digit organic revenue growth but low-single-digit total revenue growth because of the planned medical-business divestiture, which BWXT expects to close later in 2026. The company expects commercial adjusted EBITDA margins to improve by 50 to 100 basis points in 2027.

Fitzgerald said 2027 free cash flow is expected to be flat to slightly higher than 2026, as earnings growth is partly offset by working-capital investments, capital expenditures and approximately $10 million of higher pension contributions. BWXT expects capital expenditures of roughly 6% of revenue in both 2026 and 2027 as it expands manufacturing and fuel-production capabilities.

About BWX Technologies (NYSE:BWXT)

BWX Technologies, Inc NYSE: BWXT is a specialty manufacturer and services provider focused on nuclear technology. The company designs and manufactures nuclear reactors, reactor components, nuclear fuel and related equipment, with a major emphasis on highly engineered systems used in naval and commercial applications.

BWXT is a key supplier to the U.S. government, supporting the U.S. Navy's nuclear-powered aircraft carriers and submarines through reactor design, component manufacturing, fuel production, maintenance and life-cycle services.

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