BWX Technologies (BWXT)·Q4 2025 Earnings Summary

BWXT Beats Q4 Estimates, Issues Strong 2026 Guidance as Backlog Hits $7.3B

February 23, 2026 · by Fintool AI Agent

BWX Technologies reported Q4 2025 results that beat Wall Street expectations on both revenue and earnings, capping a "monumental" year that saw the nuclear components manufacturer achieve record financial results and 50% backlog growth. The company initiated 2026 guidance calling for mid-to-high teens EPS growth as demand from U.S. Navy programs and commercial nuclear power markets remains "exceptionally strong."

Did BWXT Beat Earnings?

Yes — BWXT delivered a clear beat on both metrics:

The Q4 beat extends BWXT's streak of outperformance. Revenue grew 19% year-over-year with organic growth of 4%, while non-GAAP EPS rose 17% driven by higher operating income, other income, and lower interest expense.

For full year 2025, BWXT achieved record results:

• Revenue: $3.2B (+18% YoY)
• Adjusted EBITDA: $574M (+15% YoY)
• Free Cash Flow: $295M (+16% YoY)
• Non-GAAP EPS: $4.01 (+20% YoY)

What Did Management Guide?

BWXT initiated robust 2026 guidance that implies continued double-digit growth across key metrics:

Segment-Level Expectations for 2026

Government Operations (74% of 2025 revenue):

• Revenue: Low-to-mid teens growth driven by double-digit special materials growth and low-single-digit naval propulsion growth
• Adj. EBITDA Margin: ~19%

Commercial Operations (26% of 2025 revenue):

• Revenue: ~25% growth from low-double-digit organic growth plus Kinectrics contribution
• Adj. EBITDA Margin: ~14%

Quarterly Cadence & Q1 2026 Expectations

Management guided to a back-half weighted 2026, with ~55% of full-year EBITDA expected in H2:

• Q1 2026 EBITDA: Expected roughly flat YoY in both segments due to seasonality, mix impacts, and new program ramp-up
• Q1 2026 EPS: Expected relatively flat vs Q1 2025
• Tax Rate: Rising to ~22% in 2026 (vs 20.4% in 2025) due to greater international earnings from commercial power and Kinectrics

What Changed From Last Quarter?

Record Backlog Signals Multi-Year Visibility

The most significant development was backlog growth of 50% to $7.3B, providing unprecedented visibility into future revenues:

Key contract wins driving backlog growth:

• Naval reactor components pricing agreement signed Q2 2025
• Naval Fuel contract signed Q3 2025
• $1.5B IDIQ contract for NNSA Defense Fuels Program
• $1.6B contract with NNSA for High Purity Depleted Uranium manufacturing facility
• Strategic Petroleum Reserve and Canadian National Labs wins
• Commercial nuclear steam generators for Pickering life extension

Commercial Operations Inflection

Commercial Operations revenue nearly doubled (+95% YoY in Q4), transforming the segment mix:

Drivers included:

• Higher field services, fuel components, and medical sales
• Contribution from Kinectrics acquisition
• Commercial nuclear steam generators for refurbishment
• Owner's Engineer services for AP1000 project at Kozloduy Nuclear Power Plant

TRISO Fuel Milestone

BWXT delivered its first full core of TRISO nuclear fuel for Project PELE to Idaho National Laboratory in November 2025. The company is also manufacturing TRISO for Antares, targeting reactor criticality by July 4, 2026 in line with nuclear executive orders.

Strategic Facility Expansion

• Canadian Nuclear Laboratories: A BWXT-led team (including Kinectrics) assumed the M&O contract — the company's first international Technical Services Group project
• BWXT Innovation Campus: Grand opening held in 2025, serving as home for advanced nuclear and microreactor businesses
• BWXT Digital Center: Opened in Melbourne, FL in early 2026 as the hub for digital transformation and AI initiatives

Q&A Highlights

On Government Operations Margin Trajectory: When asked if margins would trough in 2026, CFO Mike Fitzgerald indicated no incremental pressure expected in 2027: "We feel really good about the current pricing agreement. If you look at our core naval propulsion business, we're actually performing really well. Efficiency and utilization are up at our best sites and our largest sites... We would expect a rebound in 2027."

On AI Strategy: CEO Rex Geveden outlined a three-phase AI approach:

1. Phase 1 (Complete): Machine learning for manufacturing processes — hyperspectral sensors on weld processes to detect out-of-spec conditions, reducing expensive rework
2. Phase 2 (Current): Democratizing access to LLMs (Databricks, ChatGPT) to improve functional efficiencies
3. Phase 3 (Upcoming): Factory automation — fully digitized quality records, automated inspection, digital twin representations of every manufactured component

"That's the phase that we're going into right now, and we're quite excited about that."

On U.S. Commercial Nuclear Expansion: Asked about siting a commercial facility at Mount Vernon, Geveden highlighted synergies: "There's some synergies between our government business there and the would-be commercial facility there... We have a 1,000 metric ton crane capacity to stevedore components right onto the Ohio River there. We would certainly jointly share those assets."

On Tariff Exposure: BWXT operates under the USMCA trade agreement with no tariffs on medical products or nuclear components. Geveden noted: "This last announcement, around 10 and then 15% tariffs across the board, does not apply to the USMCA agreement... I'm certainly hopeful that trade relations between the U.S. and Canada and Mexico remain normal."

On AP1000 Revenue Opportunity: Asked about revenue content per AP1000 project, Geveden estimated: "You could think of, you know, in the hundreds of millions of dollars, maybe in the low hundreds of millions of dollars. But that's a bit of guesswork... We're bidding on a lot of different things, and we'll just have to wait and see how that comes out."

On Tech 99 FDA Approval: Geveden acknowledged ongoing product quality challenges: "We have not submitted to the FDA yet... We did not contemplate Tech 99 revenue in 2026 in our guidance... It would be an upside for us if it did occur."

On Navy Shipyard Bottlenecks: Asked about improved supply chain commentary from shipbuilders, Geveden noted: "We're seeing pretty encouraging progress at the shipyards... Admiral McCoy, who'd been running our government operations business, was seconded into the Department of Defense to support the Navy for that specific purpose, the express purpose of improving throughput at the shipyards."

Key Management Quotes

Rex D. Geveden, President and CEO:

"We delivered a strong fourth quarter, and a record year for BWXT. In our tenth year as a standalone public company, 2025 was monumental for BWXT as we expanded our service and product offerings with two acquisitions and captured significant high-value awards across both Government and Commercial segments, driving 50% backlog growth."

"BWXT operates at the intersection of national security and commercial nuclear power markets, where demand for both remains exceptionally strong. Our strategy goes beyond capturing new awards; we are strengthening our competitive position through operational excellence and targeted investments to continue to expand our industrial scale and technical capabilities."

How Did the Stock React?

BWXT shares closed down 3.9% at $198.38 during the regular session, despite the earnings beat. However, shares recovered in aftermarket trading, rising to $210.05 (+5.9% from close).

The initial decline likely reflected:

1. Timing of cash flows — Q4 OCF was $127M vs $277M prior year due to timing throughout the year
2. Government Operations revenue down 1% YoY in Q4
3. Elevated capital expenditures ($70M in Q4, up 34% YoY) for growth investments

The aftermarket recovery suggests the market ultimately viewed the strong guidance and backlog growth favorably.

Capital Allocation & Balance Sheet

BWXT significantly restructured its balance sheet in 2025:

Key capital actions in 2025:

• Issued $1.25B convertible senior notes with 0% coupon; entered cap call transaction increasing conversion price to over $396
• Acquired Kinectrics (supporting commercial nuclear growth)
• Acquired A.O.T. (special materials processing)
• Renegotiated credit facility and term loan with more favorable terms and increased capacity
• Liquidity: $1.7B at year end
• Share repurchases: $30M
• Dividends: $92.5M ($0.25/share quarterly)
• Declared Q1 2026 dividend increase to $0.27/share (+8%)

For 2026, management expects:

• No planned share repurchases
• CapEx: 6.0% of sales ($225M)
• Modest net interest expense (down from 2025)

Risks & Concerns

Government Operations Softness in Q4: Government segment revenue declined 1% YoY in Q4 due to lower naval nuclear component material procurement and slightly lower microreactor revenue. While full-year Government revenue was still up 8%, investors should watch whether Q4's softness carries into 2026.

Federal Budget Uncertainty: Forward-looking statements highlight risks from "federal budget uncertainty, the risk of future budget cuts, the impact of continuing resolution funding mechanisms and the debt ceiling, the potential for government shutdowns."

Elevated Leverage: Long-term debt doubled to $2.0B following the convertible notes issuance to fund acquisitions. While cash on hand increased substantially, the debt load requires execution on growth initiatives.

Integration Execution: Two acquisitions in 2025 (Kinectrics and A.O.T.) contributed $31M in acquisition-related costs. Successful integration is key to achieving segment margin targets.

Forward Catalysts

1. Navy Shipbuilding Budget: Long-term naval reactor procurement schedules remain favorable; the Columbia-class submarine program and Virginia-class production drive sustained demand. Management confirmed BWXT remains on track at 2 Virginias per year, 1 Columbia per year.

2. NNSA Defense Fuels Program: Initial scope on the $1.5B IDIQ contract positions BWXT as a key player in building U.S. defense uranium enrichment capability. The Centrifuge Manufacturing Development Facility was stood up in just 7 months.

3. Commercial Nuclear Renaissance: Growing activity in nuclear plant life extensions (Pickering), new builds (AP1000), and SMR components. Commercial nuclear book-to-bill was over 2x in Q4. Management expects additional BWRX-300 and AP1000 component orders in 2026.

4. Medical Radioisotope Growth: BWXT Medical reached ~$100M annual revenue in 2025, up ~20% YoY, with double-digit diagnostic isotope growth and meaningful actinium sales increases. Similar growth expected in 2026.

5. Microreactor & Advanced Fuels: TRISO fuel delivered for Project Pele; manufacturing TRISO for Antares targeting reactor criticality by July 4, 2026. The Project Janus program represents a follow-on opportunity to Pele.

6. Missile Defense: BWXT was awarded on the Missile Defense Agency's $151B "Golden Dome" shield contract, positioning it to compete for infrastructure support and engineering/manufacturing technology development.

7. International Expansion: AUKUS-related production capacity work contributing to 2026 growth; South Korea presents potential opportunity for fuel manufacturing or reactor cores.

Historical Financial Performance

*Values retrieved from S&P Global for some quarters without direct citations.

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Related Links:

• BWXT Company Profile
• Q4 2025 Earnings Presentation
• Q3 2025 Earnings Recap