Executive Summary

Q2 2025 delivered a broad-based beat: revenue $764.0M (+12% YoY) and non-GAAP EPS $1.02 (+24% YoY), driven by strong Government Operations execution and pacing of material procurements; adjusted EBITDA rose to $145.9M (+16% YoY) .
Record backlog reached $6.015B (+70% YoY), aided by a new U.S. Naval Nuclear Propulsion pricing agreement totaling ~$2.6B with ~$1.0B booked in Q2; bookings totaled $1.64B in the quarter .
Guidance raised: FY25 revenue to ~$3.1B, adjusted EBITDA to $565–$575M, non-GAAP EPS to $3.65–$3.75, and FCF to $275–$285M, reflecting stronger margin performance, lower tax, and better pension/other income; Commercial margin tempered near term on mix/growth investment .
Near-term catalysts: accelerated defense and nuclear demand (naval components, special materials, microreactors), Canadian and U.S. SMR progress (Darlington BWRX‑300, TVA permit acceptance), and expanding medical isotope portfolio (CNSC approvals), all supporting estimate revisions and narrative momentum .

What Went Well and What Went Wrong

What Went Well

Government Operations outperformed: revenue +9% and adjusted EBITDA +23% YoY; margin uplift from favorable mix and strong special materials contract performance, plus timing of material procurements .
Strategic wins and visibility: $2.6B naval reactor components pricing agreement with 6–8 year deliveries; ~$1.0B booked in Q2, validating supply chain pacing within the Navy’s long-term plan .
Cash generation and backlog: FCF $126.3M (+256% YoY) on working capital management; consolidated backlog $6.015B (+70% YoY) with $1.64B quarterly bookings .

Management quotes:

“We had exceptionally strong second quarter 2025 financial results driven by solid operational performance and pacing of work, particularly in Government Operations…” — Rex D. Geveden, CEO .
“We now expect adjusted EBITDA of $565 million to $575 million, adjusted EPS of $3.65 to $3.75, and free cash flow of $275 million to $285 million.” — Rex D. Geveden, CEO .

What Went Wrong

Commercial Operations margin pressure: adjusted EBITDA fell to $16.2M (from $22.5M), with field services mix down to just over 10% of segment revenue versus >35% last year; growth investments also weighed on near-term margins .
EBITDA vs Street definition mismatch can obscure performance: company adjusted EBITDA was $145.9M, but S&P “EBITDA” shows lower actual (definition differences), requiring care in estimate comparisons .
Zirconium price spike impacted Q1 and modestly Q2 timing under percentage-of-completion, though largely passed through and stabilizing; underscores materials volatility exposure in reporting cadence .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$746.3	$682.3	$764.0
Diluted GAAP EPS ($)	$0.77	$0.82	$0.85
Non-GAAP EPS ($)	$0.92	$0.91	$1.02
Operating Income ($USD Millions)	$92.3	$96.6	$102.4
Net Income ($USD Millions)	$71.1	$75.5	$78.5
Adjusted EBITDA ($USD Millions)	$130.3	$129.8	$145.9
Operating Cash Flow ($USD Millions)	$276.9	$50.7	$159.0
Free Cash Flow ($USD Millions)	$224.4	$17.3	$126.3

Segment breakdown

Segment	Metric	Q4 2024	Q1 2025	Q2 2025
Government Operations	Revenue ($USD Millions)	$595.0	$555.3	$589.0
Government Operations	Operating Income ($USD Millions)	$98.1	$97.7	$109.4
Government Operations	Adjusted EBITDA ($USD Millions)	$116.7	$116.9	$133.0
Commercial Operations	Revenue ($USD Millions)	$152.3	$128.3	$176.1
Commercial Operations	Operating Income ($USD Millions)	$14.9	$6.5	$6.9
Commercial Operations	Adjusted EBITDA ($USD Millions)	$23.7	$14.0	$16.2

KPIs and backlog/booking cadence

KPI	Q4 2024	Q1 2025	Q2 2025
Backlog (Total, $USD Millions)	$4,842.5	$4,878.7	$6,015.2
Bookings (Total, $USD Millions)	$2,208.7	$719.8	$1,640.5
Dividends Paid ($USD Millions)	$22.0	$23.7	$23.1
Dividend per Share ($)	$0.24	$0.25	$0.25 (declared for Sep 5 payment)
Capital Expenditures ($USD Millions)	$52.5	$33.4	$32.7

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Billions)	FY 2025	~$3.0B	~$3.1B	Raised
Adjusted EBITDA ($USD Millions)	FY 2025	$550–$570	$565–$575	Raised
Non-GAAP EPS ($)	FY 2025	$3.40–$3.55	$3.65–$3.75	Raised
Free Cash Flow ($USD Millions)	FY 2025	$265–$285	$275–$285	Raised (low end)
Government Operations adj. EBITDA margin (%)	FY 2025	Not specified in PR	~20.5%	Raised vs prior expectation
Commercial Operations adj. EBITDA margin (%)	FY 2025	14–15%	13.5–14%	Lowered
Capex (% of sales)	FY 2025	Not specified in PR	5.5–6%	Increased vs earlier view
Effective tax rate (%)	FY 2025	Not specified in PR	~21% full-year; 2H ~22.5%	Updated lower full-year rate
Dividend per share ($)	Q3 2025	$0.25 (Q1)	$0.25 declared (payable Sept 5)	Maintained

Why changes: stronger Government Operations margin performance (special materials EAC and pacing of material procurement), slightly higher Commercial revenue, lower tax rate, and better pension/other income; Commercial margin lowered on growth investment and mix (field services timing) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024)	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
Naval nuclear contracts & visibility	Robust bookings in Government Operations; component production momentum	Reaffirmed outlook; land purchase for domestic enrichment (NNSA)	~$2.6B pricing agreement signed; ~$1.0B booked in Q2; 6–8 year deliveries	Strengthening
Special materials & enrichment	Higher special materials revenue YoY	Domestic enrichment program readiness	$29M favorable EAC on special materials contract; responding to sole-source RFP for pilot plant	Improving
Microreactors (Project Pele)	Microreactors volume cited	Continued progress implied	Core manufacturing started; DoD procurement strategy may place reactors at multiple sites; target ops by 2028	Accelerating
SMRs (BWRX‑300, AP1000)	Commercial bookings for SMR components	Cambridge expansion to support commercial nuclear	NRC accepted TVA BWRX‑300 permit; BWXT making RPV for Darlington; AP1000 MOU for components	Positive regulatory momentum
Medical isotopes	Better profitability in medical	Higher medical sales	Double-digit growth; CNSC approvals to irradiate Y‑90 and Lu‑177 targets; Tech‑99 product timing pushed beyond 2025	Expanding portfolio (near-term timing adjustments)
Supply chain/commodities	Commodity and labor pressures in 2024 context	Zirconium spike impacted Q1	Zirconium impact minor in Q2 and stabilizing; contractual pass-throughs mitigate pricing risk	Easing

Management Commentary

“Backlog grew to $6,000,000,000 up 23% quarter over quarter and 70% year over year… Organic book to bill was 2.2 in the quarter” — Rex D. Geveden, CEO .
“Adjusted EPS were $1.02 up 24%, driven by strong operating performance, complemented by a lower tax rate, foreign currency gains and higher pension income” — Mike Fitzgerald, CFO .
“We signed the next pricing agreement for naval nuclear reactor components… valued at $2,600,000,000 over the next eight years” — Rex D. Geveden, CEO .
“We now expect our full year tax rate to be approximately 21%… second half ~22.5%” — Mike Fitzgerald, CFO .

Q&A Highlights

Special materials uplift: CFO confirmed ~$29M favorable EAC on a special materials contract, partially contemplated in original guide, contributing to margin outperformance .
Commercial margin drivers: Field services mix fell to just over 10% of segment revenue vs >35% last year; growth investments and SG&A absorption reduced margins; expecting second-half mix improvement .
Naval contracts cadence: Pricing agreement “on time” with serial ordering; supports view of fixing shipyard bottlenecks while keeping supply chain on pace; deliveries tied to 30-year shipbuilding plan .
Microreactor/space nuclear roadmap: Pele progressing toward assembly; NASA proceeding with nuclear thermal propulsion (DRACO), with appropriations indications; BWXT sees roles across multiple programs .
Materials risk: Zirconium price variability passed through to customers; impact primarily timing-related in percentage-of-completion accounting; pressures stabilizing .

Estimates Context

Results vs S&P Global consensus (Q2 2025):

Metric	Consensus	Actual
Revenue ($USD Millions)	$710.8M*	$764.0M
Primary EPS ($)	$0.793*	$1.02

Values retrieved from S&P Global.*
Implications: clear top-line and EPS beat should drive upward estimate revisions for FY25 EPS given raised guidance and margin confidence in Government Operations, tempered by Commercial margin investment/mix near term .

Key Takeaways for Investors

Strong beat and guide-up: Revenue and EPS exceeded consensus, with FY25 revenue/EBITDA/EPS all raised; upside driven by Government Operations margin and lower tax/pension/other income tailwinds .
Backlog and bookings de-risk 2H: Record $6.015B backlog and $1.64B quarterly bookings, including ~$1.0B tied to the new $2.6B naval pricing agreement, improve visibility into revenue and cash conversion .
Watch Commercial mix normalization: Field services mix recovery expected in 2H to lift segment margins; near-term guidance reflects growth investments and Kinectrics contribution mix .
Special materials drives margin: ~$29M favorable EAC and pipeline in depleted uranium/high-purity materials underpin Government Operations margin guide (~20.5%) .
Cash and capex: Q2 FCF $126.3M and full-year FCF raised; capex stepping to 5.5–6% of sales for Cambridge expansion and defense fuels infrastructure, but no “super-cycle” expected .
Regulatory momentum supports SMR narrative: NRC acceptance for TVA BWRX‑300, Darlington reactor components underway, and AP1000 component opportunities via Westinghouse MOU expand medium-term growth runway .
Dividend continuity: $0.25/share quarterly dividend declared; consistent capital return while funding growth .

Appendix: Additional Data and Disclosures

Non-GAAP reconciliations cover restructuring/transformation and acquisition-related costs and amortization; adjusted EBITDA constructed from non-GAAP net income plus taxes, interest, D&A .
Segment adjusted EBITDA (Q2 2025): Government $133.0M; Commercial $16.2M; Corporate $(3.3)M .
Conference call and press release detail forward-looking risks including budget uncertainty, regulatory approvals, and supply chain dynamics .

BWX Technologies, Inc. (BWXT)·Q2 2025 Earnings Summary