Q3 FY2026
Filed Nov 9, 2026Q3 2026 revenue of $290.8 million, up 109% year over year, with GAAP net income of $93.9 million helped by a $85.1 million change in fair value of customer warrants; full year 2027 Adjusted EBITDA target of $125 million to $140 million issued
Revenue, bookings, backlog and Adjusted EBITDA all rose sharply from the prior-year quarter, and the company issued a 2027 Adjusted EBITDA target range. Offsetting this, GAAP net income depends on a non-cash warrant revaluation, adjusted net income fell to $4.8 million from $35.1 million, operating cash flow for the nine months was negative $130.3 million, and receivables and payables rose sharply on the balance sheet.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenues, Q3 2026 (three months ended September 30)GAAP | $290.8M | – | 109% |
| Cost of operations, Q3 2026GAAP | $245.9M | – | – |
| Selling, general and administrative expenses, Q3 2026GAAP | $30.5M | – | – |
| Research and development costs, Q3 2026GAAP | $600K | – | – |
| Operating income, Q3 2026GAAP | $13.8M | – | – |
| Interest expense, Q3 2026GAAP | −$4.1M | – | – |
| Interest income, Q3 2026GAAP | $1.3M | – | – |
| Change in fair value of customer warrants, Q3 2026GAAP | $85.1M | – | – |
| Total other income (expense), net, Q3 2026GAAP | $81.1M | – | – |
| Income tax expense, Q3 2026GAAP | $1.4M | – | – |
| Income from continuing operations, Q3 2026GAAP | $93.5M | – | – |
| Income from discontinued operations, net of tax, Q3 2026GAAP | $400K | – | – |
| Net income attributable to stockholders, Q3 2026GAAP | $93.9M | – | – |
| Net income attributable to stockholders of common stock, Q3 2026 (after Series A Preferred dividend of $3.7 million)GAAP | $90.2M | – | – |
| Basic earnings per share, Q3 2026GAAP | $0.61 | – | – |
| Diluted earnings per share, Q3 2026GAAP | $0.02 | – | – |
| Adjusted Net Income, Q3 2026non-GAAP | $4.8M | – | – |
| Adjusted EBITDA, Q3 2026non-GAAP | $17.7M | – | 88% |
| Bookings, Q3 2026other | $228M | – | 112% |
| Backlog, end of Q3 2026other | $2.5B | – | 571% |
| Revenues, nine months ended September 30, 2026GAAP | $824.9M | – | – |
| Cost of operations, nine months ended September 30, 2026GAAP | $690M | – | – |
| Selling, general and administrative expenses, nine months ended September 30, 2026GAAP | $108.6M | – | – |
| Operating income, nine months ended September 30, 2026GAAP | $23.9M | – | – |
| Interest expense, nine months ended September 30, 2026GAAP | −$13.5M | – | – |
| Net income attributable to stockholders, nine months ended September 30, 2026GAAP | $31.2M | – | – |
| Basic earnings per share, nine months ended September 30, 2026GAAP | $0.14 | – | – |
| Diluted earnings per share, nine months ended September 30, 2026GAAP | $(0.03) | – | – |
| Adjusted Net Income, nine months ended September 30, 2026non-GAAP | $18.3M | – | – |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | $55.5M | – | – |
| Net cash used in operating activities, nine months ended September 30, 2026GAAP | −$130.3M | – | – |
| Purchase of property, plant and equipment, nine months ended September 30, 2026GAAP | −$18.6M | – | – |
| Cash, cash equivalents and restricted cash, end of period (September 30, 2026)GAAP | $128.9M | – | – |
FY2026 (reiterated) and FY2027 (issued) outlook
- NoteFull year 2026 Adjusted EBITDA target range of $80.0 million to $105.0 million, reiterated
- NoteFull year 2027 Adjusted EBITDA target range of $125 million to $140 million, issued
- NoteThe release states these targets are not intended as guidance regarding how the Company believes the business will perform, and that they cannot be reconciled to GAAP counterparts without unreasonable effort and expense
Capital returns
- Repurchased $38 million in shares during the third quarter under a share repurchase program authorized earlier in 2026
- Repurchase of common stock of $(42.9) million in the nine months ended September 30, 2026 per the cash flow statement
- Payment of Preferred Stock dividends of $(11.1) million in the nine months ended September 30, 2026; Series A Preferred dividend of $3.7 million in Q3 2026 deducted in the net income to common line
- Completed full redemption of the $61.8 million in outstanding 6.5% bonds due in December 2026 during the third quarter (the headline states $62 million)
- Buyback of Senior Notes due 2026 of $(84.8) million in the nine months ended September 30, 2026 per the cash flow statement
What drove it
- Company states revenue increase was primarily driven by an increase in large project volume, including $77.8 million from Base Electron
- Company states net income improvement was driven by the improvement in operating income, and that it benefited from a reduction to interest expense of $4.4 million and a change in fair value of customer warrants of $85.1 million
- Company states Adjusted EBITDA rose on the same comparison; the Adjusted EBITDA reconciliation adds back the $(85.1) million customer warrant change and $2.5 million of customer warrant amortization in Q3 2026
- Company states bookings were strong, especially in its projects and core parts and services groups
- Company states the data center pipeline now exceeds 6 gigawatts and the total global pipeline exceeds $16 billion including 6 gigawatts of new incremental power
- Company states its data center project in North Dakota remains on track, with manufacturing of boilers, steam turbines and long-lead-time components progressing rapidly and nearly all permit applications submitted
- Company states an increase in power demand has caused a shortfall in skilled labor, which increased construction costs and affected productivity
Concerns
- GAAP net income of $93.9 million includes an $85.1 million change in fair value of customer warrants; the company's adjusted net income excludes $(89.1) million of non-cash warrant and other stock-related items and was $4.8 million
- Adjusted Net Income was $4.8 million in Q3 2026 against $35.1 million in Q3 2025, and the prior-year figure equals GAAP net income that included $41.2 million from discontinued operations
- Diluted EPS for Q3 2026 is printed as $0.02, while the headline EPS of $0.61 is the basic figure; diluted weighted shares rose to 158.7 million from 103.0 million
- Net cash used in operating activities was $(130.3) million for the nine months; accounts receivable rose to $260.0 million from $118.4 million at December 31, 2025
- Company states that in certain instances costs increased, and that labor constraints increased construction costs and affected productivity; it says these conditions may adversely impact future project execution and operating results
- Company states it has increased working capital from time to time to support growth
- Cash, cash equivalents and restricted cash declined to $128.9 million from $201.4 million at the beginning of the nine-month period as printed in the cash flow statement
- Forward-looking risk language cites the potential for future conditions that could raise substantial doubt about the ability to continue as a going concern, which the release says has occurred in the past
What to watch
- Conversion of the $2.5 billion backlog and the stated $228 million of Q3 bookings into revenue in coming periods
- Progress of the North Dakota data center project, including permitting and manufacturing of long-lead-time components
- Delivery against the 2027 Adjusted EBITDA target range of $125 million to $140 million and the reiterated 2026 range of $80.0 million to $105.0 million
- Operating cash flow after the nine-month outflow of $(130.3) million, and the level of receivables and advance billings
- Changes in the customer warrant liability ($51.8 million at September 30, 2026) and its effect on GAAP net income
- Use of the share repurchase program ($38 million in Q3) relative to cash of $128.9 million
- Labor availability and its effect on construction costs and project productivity
Balance sheet and cash flow
- Secured debt and bonds of $166.4 million at September 30, 2026; no prior-period comparative printed for this figure
- Cash, cash equivalents and restricted cash of $128.9 million at September 30, 2026, compared with $201.1 million at September 30, 2025 per the cash flow statement
- Total assets of $844.7 million at September 30, 2026 versus $662.9 million at December 31, 2025
- Total stockholders' equity of $109.6 million at September 30, 2026 versus stockholders' deficit of $(131.5) million at December 31, 2025
- Accounts receivable, trade, net of $260.0 million at September 30, 2026 versus $118.4 million at December 31, 2025
- Accounts payable of $162.9 million at September 30, 2026 versus $69.2 million at December 31, 2025
- Advance billings on contracts of $58.8 million at September 30, 2026 versus $112.0 million at December 31, 2025
- Customer warrants liability of $51.8 million at September 30, 2026 versus $8.3 million at December 31, 2025
- Customer contract asset noncurrent of $52.4 million at September 30, 2026 versus nil at December 31, 2025 as printed
- Current borrowings of $0.3 million and borrowings, net of current portion, of $55.6 million at September 30, 2026
- Senior Notes due 2030 of $146.6 million at September 30, 2026
- Net cash used in operating activities of $(130.3) million for the nine months ended September 30, 2026, compared with $(65.9) million in the prior-year period
- Net cash provided by financing activities of $73.2 million for the nine months ended September 30, 2026, including issuance of common stock, net, of $259.6 million
- Diluted weighted average shares of 158.7 million in Q3 2026 versus 103.0 million in Q3 2025; basic 147.3 million versus 103.0 million
Analysis
Babcock & Wilcox reported third quarter 2026 revenue of $290.8 million, against $139.2 million a year earlier, and the release attributes the increase primarily to larger project volume, including $77.8 million from Base Electron. Operating income rose to $13.8 million from $3.4 million, and cost of operations rose to $245.9 million from $105.9 million, while SG&A moved only to $30.5 million from $29.1 million. Gross margin is not printed in the filing, so the operating leverage implied by these lines is left for the reader to assess. Bookings of $228 million and backlog of $2.5 billion are reported with year-over-year changes of 112% and 571%, and the company states a total pipeline above $16 billion. These are the company's own measures, and the release notes that bookings and backlog can vary significantly from period to period.
GAAP net income of $93.9 million and basic EPS of $0.61 are materially above the prior year's $35.1 million and $0.30, but the filing attributes this to the operating improvement together with a $4.4 million lower interest expense and an $85.1 million change in fair value of customer warrants. Excluding non-cash warrant and other stock-related items, the company reports adjusted net income of $4.8 million, against $35.1 million in the prior-year quarter, and that prior-year figure equals GAAP net income which included $41.2 million from discontinued operations. Diluted EPS is printed as $0.02 for the quarter, so the headline $0.61 is the basic measure. Adjusted EBITDA of $17.7 million rose 88% from $9.4 million, and the company states that revenue and Adjusted EBITDA exceeded consensus street expectations, although no consensus figures appear in the filing.
For the nine months, revenue was $824.9 million against $426.7 million, operating income was $23.9 million against $8.5 million, and Adjusted EBITDA was $55.5 million against $27.3 million. Net income for the nine months was $31.2 million, compared with a loss of $(45.4) million, and diluted EPS was $(0.03). Operating cash flow was negative $(130.3) million for the period, compared with $(65.9) million, with accounts receivable rising to $260.0 million from $118.4 million at December 31, 2025 and accounts payable rising to $162.9 million from $69.2 million. Cash, cash equivalents and restricted cash ended at $128.9 million.
On capital allocation, the company repurchased $38 million of shares in the quarter under a program authorized earlier in 2026, and fully redeemed the 6.5% bonds due December 2026, which the release describes as leaving the lowest company debt levels in recent history. Secured debt and bonds stood at $166.4 million at quarter end. The company issued a 2027 Adjusted EBITDA target range of $125 million to $140 million and reiterated its 2026 range of $80.0 million to $105.0 million. The release states that these are targets and not guidance. Management also states that labor shortages have raised construction costs and affected productivity, which the filing says may adversely affect future project execution. Compared with the prior period, the largest changes are the scale of revenue growth, the warrant-driven swing in GAAP earnings, and the increase in working capital.
Management, verbatim
B&W maintained its strong performance in the third quarter of 2026, reflecting continued demand across all of our businesses and sustained operational momentum,
Kenneth Young, Chairman and Chief Executive Officer
Our current data center project in North Dakota remains on track, as manufacturing of the boilers, steam turbines and other long-lead-time components is progressing rapidly.
Kenneth Young, Chairman and Chief Executive Officer
Backed by strong industry tailwinds, limited company debt and active project discussions, we are optimistic about the path ahead for B&W, which gives us the confidence to issue a full year 2027 Adjusted EBITDA target range of $125 million to $140 million.
Kenneth Young, Chairman and Chief Executive Officer
Not in the filing
stated, not guessed- Gross margin for Q3 2026 and Q3 2025 (not printed as a figure)
- Prior-quarter (Q2 2026) comparatives for all income statement lines
- Year-over-year percentage changes for operating income, net income, EPS, cost of operations, SG&A and R&D (not printed)
- Nine-month year-over-year percentage changes (not printed)
- Segment or business-line revenue breakdown (not printed; the release gives only the Base Electron amount as a driver)
- Prior-year comparative for secured debt and bonds of $166.4 million
- Prior-quarter bookings and backlog figures; the prior-year backlog base is not printed
- Free cash flow for the quarter and nine months (not printed as a figure)
- Quarterly operating cash flow for Q3 2026 (only the nine-month figure is printed)
- Total debt as a single printed figure (individual debt lines are printed separately)
- Consensus or analyst expectations (referenced qualitatively only; no figures printed)
- Share price reaction (not in the documents)
- Gain or loss on asset disposals for Q3 2026 is printed as a dash, so no amount is reported
- Explicit gross margin or margin guidance for 2026 or 2027
- Revenue guidance for 2026 or 2027
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.