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BWX Technologies, Inc. (BWXT)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered double-digit organic revenue growth and strong cash generation: revenue $0.866B (+29% y/y), GAAP EPS $0.89 (+17% y/y), non-GAAP EPS $1.00 (+20% y/y), adjusted EBITDA $151.1M (+19% y/y), and free cash flow $94.9M; backlog reached a record $7.4B (+119% y/y) driven by multi-year special materials wins .
  • BWXT raised 2025 guidance: non-GAAP EPS to $3.75–$3.80 (from $3.65–$3.75), adjusted EBITDA to ~$570M (midpoint of prior $565–$575M), revenue “$3,100+” and free cash flow to ~$285M .
  • Against S&P Global consensus, BWXT posted a clear beat: Q3 EPS $1.00 vs. $0.875 consensus; revenue $866.3M vs. $804.0M consensus; EBITDA was above consensus on an adjusted basis but below on GAAP EBITDA; management highlighted seasonality and timing of large material procurements as drivers of the beat and Q4 sequential moderation . Values retrieved from S&P Global.
  • Catalysts: newly awarded national security contracts (defense fuels centrifuge pilot and 10-year HPDU plant), nuclear power OEM partnerships (Rolls-Royce SMR steam generator design + MoU), and medical isotope capacity expansion (EMIS units at Kinectrics) bolster 2026 growth visibility, albeit with early-phase mix pressure on margins for customer-funded special materials programs .

What Went Well and What Went Wrong

What Went Well

  • Robust bookings lifted backlog to $7.389B (+119% y/y), with Government Operations bookings of $2.086B and Commercial $159M in Q3; CEO: “robust bookings… large, multi-year special materials contracts” .
  • Commercial Ops strength: revenue +122% y/y (reported), +38% organic; adjusted EBITDA up 163% to $35.5M driven by nuclear components, field services, fuels, and medical isotopes; management: “medical revenue grew double digits… outlook remains favorable” .
  • Strategic wins: 10-year $1.6B HPDU award (Jonesborough plant, up to 300 MT/year), new Rolls-Royce SMR steam generator design and MoU for future manufacturing, and $174M Naval reactor fuel contract; these expand long-term revenue visibility in defense and clean energy .

What Went Wrong

  • Government Ops operating income dipped modestly y/y ($97.4M vs. $101.6M), reflecting fewer favorable contract adjustments vs. prior year; adjusted EBITDA up only +1% y/y to $118.3M .
  • Mix pressures and timing dynamics imply Q4 sequential moderation after Q3 beat; CFO cited earlier-than-expected long-lead material procurements shifting revenue and margin cadence, and lower initial margins on customer-funded special materials phases in 2026 .
  • Microreactor volumes were lower y/y; DRACO transitioned to NASA’s SENTRY with uncertain near-term funding, contributing to the microreactor softness despite progress on Project Pele (delivery now 2027) .

Financial Results

Consolidated Performance (Quarterly)

MetricQ1 2025Q2 2025Q3 2025
Revenues ($USD Millions)$682.3 $764.0 $866.3
Operating Income ($USD Millions)$96.6 $102.4 $113.3
Net Income ($USD Millions)$75.5 $78.5 $82.2
Diluted GAAP EPS ($USD)$0.82 $0.85 $0.89
Non-GAAP EPS ($USD)$0.91 $1.02 $1.00
Adjusted EBITDA ($USD Millions)$129.8 $145.9 $151.1

Margins (Quarterly; SPGI)

MetricQ1 2025Q2 2025Q3 2025
EBITDA ($USD Millions)$101.2*$113.2*$123.0*
EBITDA Margin (%)14.84%*14.81%*14.20%*
EBIT Margin (%)11.33%*11.24%*10.91%*
Net Income Margin (%)11.06%*10.26%*9.48%*

Values retrieved from S&P Global.

Segment Breakdown (Q3 2024 vs. Q3 2025)

MetricQ3 2024Q3 2025
Government Operations Revenues ($USD Millions)$560.1 $616.7
Commercial Operations Revenues ($USD Millions)$113.1 $251.0
Government Ops Operating Income ($USD Millions)$101.6 $97.4
Commercial Ops Operating Income ($USD Millions)$6.7 $24.0
Government Ops Adjusted EBITDA ($USD Millions)$117.0 $118.3
Commercial Ops Adjusted EBITDA ($USD Millions)$13.5 $35.5

KPIs and Cash

KPIQ3 2024Q3 2025
Operating Cash Flow ($USD Millions)$32.6 $143.2
Capital Expenditures ($USD Millions)$40.3 $48.3
Free Cash Flow ($USD Millions)($7.7) $94.9
Dividends Paid ($USD Millions)$22.0 $22.9
Total Backlog ($USD Millions)$3,380.7 $7,389.1
Bookings ($USD Millions)$518.4 $2,245.4

Q3 2025 vs. Consensus (S&P Global)

MetricConsensusActualSurprise
Primary EPS ($USD)0.87491.00 +0.1251 (Beat)
Revenue ($USD Millions)804.0866.3 +62.3 (Beat)
EBITDA ($USD Millions)142.6123.0*-19.6 (Miss on GAAP EBITDA; Adjusted EBITDA $151.1 was above consensus)

Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Billions)FY 2025~$3.100 $3.100+ Raised language
Adjusted EBITDA ($USD Millions)FY 2025~$565–$575 ~$570 (midpoint of prior range) Narrowed to midpoint
Non-GAAP EPS ($USD)FY 2025~$3.65–$3.75 $3.75–$3.80 Raised
Free Cash Flow ($USD Millions)FY 2025$275–$285 ~$285 Raised to high end
Dividend ($/share)Q4 2025—$0.25 declared, payable Dec 10, 2025 Maintained

Management also introduced a preliminary FY 2026 outlook: low-double-digit to low-teens adjusted EBITDA growth and high-single-digit to low-double-digit non-GAAP EPS growth .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2025)Previous Mentions (Q1 2025)Current Period (Q3 2025)Trend
AI/automation in manufacturingFocus on OpEx, plant efficiency; favorable mix and contract performance in special materials Operational excellence and utilization improvements in naval propulsion Expanding use of AI and advanced manufacturing to improve quality control, workflow, productivity and margins Increasing emphasis
Supply chain/materialsZirconium inflation pressuring H1 margins; contractual recovery in H2 Hedging and pass-through mechanisms; largely domestic supply chains Seasonality/timing of long-lead procurements drove Q3 beat; Q4 moderation expected Stable, timing-driven
Government nuclear programsPricing agreement $2.6B; backlog strength; favorable special materials EAC Defense enrichment pilot path; SPR M&O win; Pele core manufacturing start Defense fuels centrifuge pilot and $1.6B HPDU 10-year award; modest early margins; 2026 growth led by special materials Accelerating
Commercial nuclear power (CANDU/AP1000/SMR)Record backlog incl. Pickering; bidding AP1000; SMR milestones (TVA BWRX-300) Canada large new build pipeline; Cambridge capacity expansion Rolls-Royce SMR steam generator design + MoU; evaluating localization; tracking international CANDU and AP1000 opportunities Broadening
Microreactors/space nuclearPele core manufacturing; DoD reactor acceleration ANPI down-selection; DRACO under NASA SENTRY Pele delivery now 2027; JANUS program competition planned; DRACO funding uncertain near term Mixed: timing pushout
Medical isotopesDouble-digit growth; CNSC approval for Y-176/Lu-177 irradiation; Tech-99 scale-up ongoing 20%+ growth outlook; Tech-99 late-stage FDA work; Actinium-225 leadership Kinectrics EMIS capacity to >500g/year of Yb-176; therapeutic isotope production ramp; favorable diagnostic trend Positive

Management Commentary

  • CEO: “We delivered strong financial results… double-digit organic revenue growth and healthy free cash flow… robust bookings, driven by large, multi-year special materials contracts…” .
  • CEO on 2026 outlook: “low-double-digit to low-teens adjusted EBITDA growth… position us to meet or exceed our medium-term financial targets” .
  • CFO: Government Ops adjusted EBITDA margin ~20.5% for 2025; Q3 FCF $95M; CapEx ~6% of sales in 2025, 5.5–6% in 2026 to support growth initiatives .
  • CEO on AI/automation: BWXT is “increasing the use of industrial automation and artificial intelligence to optimize cost structure, product quality and cash generation” .
  • CEO on commercial power and SMR: BWXT engaged across geographies with leading OEMs; signed Rolls-Royce SMR steam generator design and MoU .

Q&A Highlights

  • Beat dynamics and Q4 cadence: Analysts noted “one of the bigger revenue beats”; CFO attributed limited direct revenue from new contracts in Q3 and earlier material procurements shifting Q4 seasonality .
  • JANUS program: BWXT will compete aggressively, forming appropriate teams given contractor-operated model; BWXT typically does not operate reactors directly .
  • Special materials revenue/margin cadence: Fixed-price, early phases with below-average margins; improvement expected after ~25% completion via positive EACs .
  • Project Pele timing: Delivery now 2027 due to evolving requirements; core assembly underway in Lynchburg; testing at INL planned .
  • Rolls-Royce SMR economics/localization: Steam generator content mid-$50–$100M range per unit; evaluating European localization to support deployment .
  • 2026 FCF: Flat to slightly up versus 2025 given milestone timing on large contracts and CapEx at 5.5–6% of sales; working capital improvements continue .

Estimates Context

  • Q3 2025 results beat Wall Street consensus: EPS $1.00 vs. $0.875; revenue $866.3M vs. $804.0M; adjusted EBITDA $151.1M exceeded consensus EBITDA, though GAAP EBITDA $123.0M trailed . Values retrieved from S&P Global.
  • Near-term (Q4 2025) consensus implies EPS ~$0.877 and revenue ~$833.2M; management guides sequential moderation tied to timing/seasonality . Values retrieved from S&P Global.
MetricQ3 2025 ConsensusQ3 2025 ActualQ4 2025 Consensus
Primary EPS ($USD)0.87491.00 0.8765
Revenue ($USD Millions)804.0866.3 833.2
EBITDA ($USD Millions)142.6123.0*143.7

Values retrieved from S&P Global.

Implications: Upward estimate revisions for FY EPS and adjusted EBITDA are warranted; however, model GAAP EBITDA carefully due to non-GAAP adjustments and early-phase special materials mix effects .

Key Takeaways for Investors

  • The quarter was a clean top-line/EPS beat with strong free cash flow and a material guidance raise; narrative support came from bookings/backlog quality and multi-year national security awards—positive for sentiment and potential multiple support .
  • Expect Q4 sequential moderation due to timing of procurements; avoid extrapolating Q3 run-rate; watch H1 2026 for mix headwinds as customer-funded special materials phases ramp before margin improvement through EACs .
  • Commercial power momentum is broadening: CANDU life extensions (Pickering steam generators), AP1000 bidding, and SMR partnerships (Rolls-Royce, GE Hitachi, TerraPower) position BWXT as a “super merchant supplier” with capacity expansion underway—supportive of medium-term revenue growth .
  • Medical isotopes remain a secular growth lever: double-digit diagnostic trends, therapeutic pipeline (Lu-177), and EMIS capacity additions at Kinectrics enhance revenue visibility; Tech-99 remains a 2026 swing factor pending FDA timeline .
  • Watch government program execution milestones: defense fuels centrifuge pilot and HPDU plant build in Tennessee; early margins will underwhelm, but program scale and customer-funded CapEx de-risk revenue while laying groundwork for later margin uplift .
  • Capital allocation remains balanced: CapEx at 5.5–6% of sales to support growth; dividend steady at $0.25/share; strong cash generation (~$285M FY25 FCF guide) supports optionality for M&A aligned with nuclear strategy .
  • Trading setup: Near-term, the stock may react positively to beat/raise and backlog quality; medium-term thesis hinges on executing special materials build-out, commercial nuclear awards conversion, and maintaining margin progress amid mix shifts .
Notes:
- All consensus/estimate figures and SPGI fundamentals marked with * are values retrieved from S&P Global.