BWX Technologies (NYSE:BWXT) released first-quarter financial results and hosted an earnings call on Monday. Read the complete transcript below.
This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.
The full earnings call is available at https://edge.media-server.com/mmc/p/7xp2ev8c/
Summary
BWX Technologies reported a strong start to 2026 with a 26% revenue increase, 11% of which was organic, a 14% rise in adjusted EBITDA, and a 22% growth in earnings per share, all surpassing expectations.
The company’s backlog reached $8.7 billion, up 77% year-over-year, supported by robust bookings in government and commercial sectors, providing clear visibility for future growth.
BWX Technologies announced the acquisition of Precision Components Group to expand its US commercial nuclear manufacturing capacity, with plans to establish a greenfield plant in Mount Vernon, Indiana.
Government operations saw a 4% revenue increase, driven by strong bookings and operational efficiencies, with a segment backlog approaching $7 billion.
Commercial operations exceeded expectations with a 121% revenue increase, driven by robust growth in commercial nuclear and medical sectors, and contributions from Connectrix.
The company increased its 2026 revenue guidance to at least $3.75 billion, with adjusted EBITDA guidance raised to $650 million to $665 million.
BWX Technologies plans to focus on margin expansion, cash generation, and capturing new high-value contracts across defense and commercial nuclear markets.
Management expressed confidence in meeting or exceeding medium-term financial targets and highlighted the importance of local manufacturing capacity in the US for future growth.
Full Transcript
OPERATOR
Ladies and gentlemen, welcome to BWX Technologies’ first-quarter 2026 earnings conference call. At this time, all participants are in listen only mode. Following the company’s prepared remarks, we will conduct a question and answer session and instructions will be given at that time. I would now like to turn the call over to our host, Chase Jacobson, BWXT’s vice president of Investor Relations. Please go ahead.
Chase Jacobson (Vice President of Investor Relations)
Thank you. Good evening and welcome to today’s call. Joining me are Rex Jebeden, President and CEO, and Mike Fitzgerald, Senior Vice President and CFO. On today’s call, we will reference the first quarter 2026 earnings presentation that is available on the Investors section of the BWXT website. We will also discuss certain matters that constitute forward looking statements. These statements involve risks and uncertainties including those described in the safe harbor provision found in the investor materials in the Company’s SEC filings. We will frequently discuss non GAAP financial measures which are reconciled to GAAP measures in the appendix of the earnings presentation that can be found on the Investors section of the BWXT website. I would now like to turn the call over to Rex.
Rex Jebeden (President and CEO)
Thank you Chase and good evening to all of you. We had a great start to 2026 with very strong first quarter results. Revenue grew 26%, 11% of which was organic adjusted, EBITDA grew 14% and earnings per share grew 22%, all ahead of expectations. Outperformance in the quarter was driven by improved throughput, favorable pacing of work and exceptional operational execution across our business lines. We ended the quarter with a backlog of 8.7 billion, up 77% year over year and 19% sequentially supported by robust bookings in government and consistent backlog and commercial, providing clear visibility to future growth. Demand for commercial nuclear power components and services continues to accelerate across the U.S. canada and Europe as projects launch. We believe that localized manufacturing capacity will increasingly differentiate bwxt, making the establishment of US Commercial manufacturing footprint to complement our Canadian operations a strategic priority. To that end, in April we announced the acquisition of Precision Components Group pcg, a U S based manufacturer of complex heat transfer components for the US naval and commercial nuclear markets. With two facilities in more than 400 highly skilled employees, PCG represents our first step toward building domestic US commercial nuclear manufacturing capacity. While most of PCG’s current revenue and backlog is related to cable programs, its facilities have immediately available capacity that we intend to utilize for the commercial market with products such as reactor internals, pressurizers, heat exchangers and reactor head assemblies. Beyond the PCG acquisition, we intend to expand our US Commercial manufacturing footprint, likely with a greenfield plant at our Mount Vernon, Indiana site on the Ohio River. This facility will be capable of producing larger heavy nuclear equipment including steam generators and reactor pressure vessels. Ultimately, our goal is to build scalable US Commercial nuclear manufacturing operations that can serve US and global SMR and large reactor projects. By adding domestic capacity, we are positioning BWXT to meet rising commercial demand while creating meaningful synergies with our existing US Operations. Beyond commercial power, we are making disciplined growth investments across the portfolio, supporting existing businesses, adding new technologies and capabilities, and pursuing opportunities in advanced nuclear and other national security applications. Turning to segment results and market outlook Government operations revenue was up 4% and adjusted EBITDA was up 1% in the quarter, slightly ahead of our expectations. We had strong bookings including 1.4 billion from the second portion of the pricing agreement for naval reactors awarded last year and long lead material procurement contracts for out year production. This led to segment backlog of nearly 7 billion, up 25% sequentially and 93% year over year. In naval propulsion. We are driving operational efficiencies in our plants which contributed to our good margin performance in the quarter. We anticipate continued revenue growth with a steady pace of Virginia class production, growth in the Columbia class and early work on the next board class ship set. The President’s FY27 budget request supports these programs and shipbuilding generally, further reinforcing our confidence in longer term growth rates and special materials. Our legacy programs delivered solid results and our Defense Fuels Enrichment and HPDU programs are progressing in line with early program schedules specific to Defense fuels enrichment. We completed construction of the Centrifuge Manufacturing Development facility earlier in the year and have begun prototyping the first units in April. We engaged with the NRC regarding our plans to build an H and U enrichment facility in Irwin, Tennessee. This engagement is an important milestone as it creates alignment with regulators in the NRC approval process for our new large HPDU contract. We are organizing the supply chain and preparing for construction of the new facility in Jonesboro, Tennessee. That program will ramp through 2026 and continue over the next several years before transitioning to commissioning and production. The growth potential in special materials is exciting and we continue to pursue new scopes with existing customers and evaluate entry points to new markets. Technical Services has delivered strong equity income growth over the past few years with multiple strategic wins. We are pursuing new opportunities in the DOE market and in other new markets with the next wave of contract awards expected over the next 12 to 18 months. Moving to Microreactors and advanced nuclear fuels. The market is evolving rapidly in land based defense, commercial and space markets. We continue to see strong demand across the board including for TRISO fuel for demonstration reactors and future commercial projects with multiple reactor developers. Of note, Kairos, with whom we have a collaboration agreement on TRISO, recently began construction of its Hermes 2 reactor for Google in Oak Ridge, Tennessee. Finally, we are continuing our close engagement with the army on the Janus program. Turning now to commercial operations Results in the quarter were well ahead of our expectations. Organic revenue grew 39% and total revenue rose 121% with robust double digit growth in commercial, nuclear and medical and contribution from Connectrix. While the outperformance was partially due to timing of outage work and progress on large component manufacturing. We also improved operational performance with accelerated throughput and reduced lead times following an 85% increase in backlog in 2025. Backlog was flat sequentially in the first quarter but still up 33% year over year, supporting our expectation for low teens organic growth in commercial power this year the outlook for new build nuclear projects remains very positive. Notably, the US and Japan announced plans to invest up to 40 billion to build up to 3 GW of GE Hitachi SMRs in the southeastern United States. Our role as the reactor vessel supplier on the first GE Hitachi BWRX300SMR in Canada puts us in a good competitive position for these future projects given BWX Technologies’ industrial scale and engineering and design capabilities. Customers are increasingly coming to BWXT to supply critical nuclear components for their current and future SMR and large scale nuclear projects which should lead to further backlog growth over the next 12 months. Connectrix continues to exceed the acquisition business case, having delivered another very strong quarter. A key highlight in the quarter was Conetrix being selected as the design and fabrication partner for a UK Tritium loop facility which will be the world’s largest and most advanced tritium fuel cycle facility. This presents an entry point for engineering, services and specialty equipment manufacturing in the exciting nuclear fusion market. With that, I will now turn the call over to Mike.
Mike Fitzgerald (Senior Vice President and CFO)
Thanks Rex and good evening everyone. I’ll begin with total company financial highlights on slide 4 of the earnings presentation. First quarter revenue was $860 million up 26% year over year with 11% organic growth. Strong performance in commercial operations was complemented by steady growth in government operations. Adjusted EBITDA was $148 million, up 14% year over year, driven by robust growth in commercial operations and modestly higher government operations. Partially offset by higher corporate expense relative to an unusually low level in last year’s first quarter. Adjusted earnings per share were $1.12, up 22% reflecting strong operating performance and approximately $0.08 of higher non operating contributions. Our adjusted effective tax rate for the quarter was 15.8%, benefiting from timing of stock compensation. Our updated full year tax rate guidance of less than 21.5% is modestly higher than last year’s rate, reflecting strong growth in international earnings, mainly from Canada. First quarter free cash flow was $50 million, a strong result for what is typically our seasonally weakest quarter. Reflecting solid earnings and effective working capital management, capital expenditures in the quarter were $43 million. We continue to expect our full year capital expenditures to be around 6% of sales. However, it is possible that CAPEX may exceed that level in future periods as we advance targeted growth investments including expansion of US Commercial nuclear manufacturing capacity and advanced nuclear and fuel capabilities. Given the significant business we expect to capture, we are carefully balancing these strategic investments with our financial return metrics as we evaluate the numerous growth initiatives across the business. Moving to the Segment Results on Slide 6 In government operations, first quarter revenue was up 4% with growth in special materials and naval propulsion offsetting lower microreactor volumes. Adjusted EBITDA in The segment was 118 million, up 1%, resulting in an adjusted EBITDA margin of 20.4% as better revenue, solid operating performance and timing of technical services income benefited margin. Given first quarter performance, we now expect government operations margins to exceed 19% for the year. Turning to commercial operations, revenue was up a robust 121%, including 39% organic growth, reflecting increases in both commercial power and medical and contribution from Connectrix. Growth exceeded expectations due to increased throughput on large commercial nuclear component projects mainly associated with a Pickering life extension and better than expected performance from Conetrix. Adjusted EBITDA in The segment was $36 million, up 162% from last year. Adjusted EBITDA margin in the quarter was 12.9%, with higher sales and strong execution offsetting the impact of growth investments as we continue to scale the business. Turning to our 2026 guidance on Slide 7 and 8 of the earnings presentation, which I will note does not include contribution from the recently announced PCG acquisition. We expect revenue of at least $3.75 billion, up high teens compared to 2025. In government operations, we expect low teens growth with over half coming from the defense fuels and HPDU contracts. In commercial operations, we increased our revenue growth expectation to approximately 30% driven by low teens growth in commercial power, high teens medical growth and a full year of contribution from Conetrix which as mentioned has outperformed our expectations to date. For adjusted EBITDA. We are increasing the guidance range by $5 million on each end resulting in revised adjusted ebitda guidance of $650 million to $665 million. Regarding the cadence of operating earnings, we continue to expect our full year results will be slightly more back half weighted than usual with about 55% of full year EBITDA anticipated in the second half and we expect second quarter EBITDA to be roughly in line with to slightly below first quarter levels. These assumptions lead to non GAAP earnings per share guidance of $4.60 to $4.75 with the increase driven by higher operating earnings. We expect free cash flow of $315 million to $330 million inclusive of mid to high teens operating cash flow growth supporting continued reinvestment and long term shareholder value creation. Regarding the recently announced acquisition of PCG, the business generated approximately $125 million of revenue with low double digit EBITDA margins in 2025 and we anticipate mid single digits revenue growth in 2026. The acquisition, which will be included in our commercial operations segment is expected to close in the second half of the year. As such, our annual financial guidance does not include contributions from PCG at this time. Overall, we’re off to a strong start in 2026. Our robust backlog provides us great visibility for the remainder of the year allowing us to focus on margin expansion, cash generation and capturing new high value contracts across the defense and commercial nuclear markets. With that, I will turn it back to Rex for closing remarks.
Rex Jebeden (President and CEO)
Thank you Mike. It is an exciting time at bwxt. We are delivering on our commitments to customers and shareholders and driving value through process optimization, technology adoption and disciplined growth investments. Our 2026 guidance supports meeting or exceeding the medium term financial targets we introduced at our Investor Day in February 2024. We look forward to providing an update at our next Investor Day this fall. As I wrote in a recent Washington Times op ed, BWXT is not betting on a horse, we are betting on the race. We participate across the nuclear value chain in defense and commercial markets and as a merchant supplier and a technology provider enabling us to win across a broad range of competitive outcomes. We have record backlog, unprecedented demand and the financial strength to continue investing for growth. We intend to build on our market leading position in nuclear solutions for defense and commercial nuclear markets, thereby Driving long term shareholder value. And with that, we look forward to your questions.
OPERATOR
We will now begin the question and answer session. Please limit yourself to one question and one follow up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one. Again, we ask that you pick up your handset for better sound quality when asking question to allow for optimum sound quality if you are muted locally. Please remember to unmute your device. Please stand by while we compile the Q&A roster. Our first question comes from Matt Akers from BNP Paribas. Please go ahead.
Matt Akers (Equity Analyst)
Hey, good afternoon guys. Thanks for the question. I may have missed this, but did you say how much you’re planning to pay for pcg? And then I guess another question on the sort of footprint build-out. As you mentioned, this is sort of the first step toward building out the footprint and sort of how should we think about the remaining steps? Is it more kind of …
This post was originally published here
