Babcock & Wilcox ((BW)) has held its Q3 earnings call. Read on for the main highlights of the call.
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In the recent earnings call, Babcock & Wilcox showcased a robust performance with notable achievements in adjusted EBITDA, operating income, and backlog growth. The company has made significant strides in debt reduction and secured a pivotal project in the AI data center sector, suggesting a promising trajectory. Despite reporting a net loss from continuing operations, the overall sentiment remains optimistic, with substantial growth anticipated by 2026.
Significant Increase in Adjusted EBITDA and Operating Income
Babcock & Wilcox reported a remarkable 58% increase in adjusted EBITDA compared to the third quarter of 2024. Operating income saw an even more impressive rise of 315% from the same period last year. These figures underscore the company’s effective financial strategies and operational improvements.
Record Backlog Growth
The company experienced a record 56% quarter-over-quarter growth in backlog, reaching over $393 million. This surge was primarily driven by heightened demand for power generation projects, highlighting Babcock & Wilcox’s strong market position and ability to capitalize on industry trends.
Successful Debt Reduction Strategy
Babcock & Wilcox has effectively reduced its debt through asset dispositions and equity raises. The company has outlined plans to pay down its February 2026 notes by the end of 2025, demonstrating a proactive approach to financial management and debt reduction.
Major AI Data Center Project
A significant development for Babcock & Wilcox is the signing of a limited notice to proceed with Applied Digital for a $1.5 billion AI data center project. This venture is expected to add between $3 billion and $5 billion in pipeline opportunities, marking a strategic entry into the burgeoning AI data center market.
Positive Outlook for 2026
Looking ahead, Babcock & Wilcox projects an adjusted EBITDA of $70 million to $85 million for 2026, representing an 80% growth year-over-year from 2025. This optimistic forecast reflects the company’s confidence in its strategic initiatives and market opportunities.
Net Loss from Continuing Operations
Despite the positive developments, Babcock & Wilcox reported a net loss from continuing operations of $2.3 million in the third quarter of 2025. While this presents a challenge, the company’s overall financial health and strategic direction remain strong.
In summary, Babcock & Wilcox’s earnings call highlighted a strong performance with significant improvements in key financial metrics and strategic initiatives. The company’s proactive debt reduction, entry into the AI data center market, and positive growth outlook for 2026 paint a promising picture for its future trajectory.