Babcock & Wilcox Enterprises, I

What they do

B&W provides steam generation equipment, including package boilers, watertube and firetube waste heat boilers, plus aftermarket parts, construction, maintenance, engineered upgrades and field services for its own installed base and that of other original equipment manufacturers. Its technologies use coal, natural gas, hydrogen, waste and biomass and include environmental solutions and carbon capture systems. Customers are industrial, electrical utility, municipal, data center and oil and gas operators; manufacturing facilities are in Canada, Mexico and the United States.

Revenue drivers

• Aftermarket parts and services — Revenue comes from parts, construction, maintenance, engineered upgrades and field services on a large global installed base of steam generation equipment, including for other OEMs; management describes Global Parts and Services as higher-margin.
• New steam generation and large projects — Revenue from complete steam generation systems and large project volume, including the Base Electron data center project, which contributed $100.7 million of the second quarter 2026 revenue increase.
• Environmental and decarbonization technologies — Emissions control and carbon capture systems sold to utilities and industrial customers facing environmental compliance requirements, plus coal and natural gas technologies to produce steam or hydrogen with CO2 capture.

Recent performance

Q2 2026 revenue was $319.7 million, up 130% from $138.9 million in Q2 2025, driven by large project volume including $100.7 million from Base Electron. Net income was $14.3 million versus a $58.5 million net loss a year earlier, and EPS was $0.07 versus a $0.63 loss. Adjusted EBITDA was $21.8 million, up 57% from $13.9 million. Bookings were $151.0 million, up 38%, and backlog was $2.6 billion, up 533% year over year. Full year 2025 revenue was $587.7 million with a net loss of $32.8 million.

Strategy

The company completed a strategic shift to streamline the business, divesting Diamond Power ($177 million base price, $53.2 million gain), ASH ($29 million, $21.5 million gain), Vølund ($15.0 million base price, $36.8 million net loss including a $52.6 million CTA write-off) and abandoning B&W Solar as of December 31, 2025, leaving one reportable segment. It is pursuing data center and baseload power demand, ordering an additional 1 gigawatt of steam turbines from Siemens Energy for delivery in 12 to 15 months, and cites a total global pipeline above $14.0 billion. The Board authorized a share repurchase program of up to $50 million, and the company repurchased the remaining $61.8 million of bonds due December 2026 in August 2026.

Risks

• 6.50% Senior Notes maturity — The Credit Agreement requires B&W to repay, defease, satisfy or refinance the 6.50% Senior Notes due December 2026 by November 30, 2026, or extend maturity to on or after July 18, 2028, with $84.8 million outstanding at December 31, 2025.
• Fixed-price contract exposure — The company is subject to contractual pricing risk, including the risk that actual costs exceed estimates on fixed-price contracts.
• Skilled labor shortage — An increase in power demand has caused a nationwide boilermaker and other trade shortfall, raising construction costs and affecting productivity on certain projects.
• Macro and geopolitical pressures — Inflation, higher interest rates, foreign exchange volatility, tariff actions and geopolitical conflicts including Ukraine and the Middle East have caused cost increases and delays or disruptions.

Outlook

Management raised the full year 2026 Adjusted EBITDA target range to $80.0 million to $105.0 million, citing momentum across the business and confidence in additional opportunities. B&W continues active discussions on other AI data center opportunities and says the Base Electron project is progressing ahead of expectations and on budget. It also points to higher-margin Global Parts and Services and continued hiring in engineering, business development and skilled trades.