10-Q · May 11, 2026
Babcock & Wilcox reported strong revenue growth in Q1 2026, with total revenues of $214.4 million, up 44% year-over-year, surpassing expectations. Despite a significant net loss of $79.6 million, largely due to a…
Earnings analysis · 10-Q
BW earnings analysis
Filed August 10, 2026 · Our reading of the company's report
The latest report
Babcock & Wilcox delivered a substantial Q2 revenue increase to $319.7 million, with Base Electron contributing $100.7 million, and returned to positive operating income and income from continuing operations. Bookings…
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Babcock & Wilcox delivered a substantial Q2 revenue increase to $319.7 million, with Base Electron contributing $100.7 million, and returned to positive operating income and income from continuing operations. Bookings of $150.5 million and backlog of $2.569 billion support the near-term growth outlook, while liquidity totaled $382.8 million against $276.8 million of debt. However, gross margin declined to 14.6%, operating cash flow was only $0.4 million for the first six months, and unresolved material weaknesses, leverage and project-execution risks remain significant.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Segment
- B&W: $319.7 million revenue; the company has one reportable segment. Base Electron contributed $100.7 million in Q2 2026 revenue.
What stood out
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Revenue surged on large projects
Q2 2026 revenue increased $180.9 million, or 130%, year over year to $319.7 million from $138.9 million, driven partly by $100.7 million of Base Electron revenue. Revenue was also approximately $105.3 million above Q1 2026's $214.4 million.
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Operating profit remained positive
Operating income rose to $11.8 million from $7.0 million year over year, lifting operating margin to 3.7% from 5.1% despite higher project costs. The margin was below Q1 2026's approximately 5.0% based on reported Q1 revenue of about $214.4 million and operating income of about $10.8 million.
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GAAP earnings turned positive
Income from continuing operations improved to $14.3 million from a $7.4 million loss in Q2 2025, supported by $6.0 million lower interest expense, $5.9 million of customer-warrant fair-value income and a $5.1 million reduction in tax expense.
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Bookings and backlog expanded
Bookings were $150.5 million in Q2 2026 versus $108.7 million in Q2 2025, while backlog expanded to $2.569 billion from $405.6 million. Management expects to recognize $403.8 million of the backlog in 2026 and $674.5 million in 2027.
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Liquidity remains adequate near term
Cash and cash equivalents plus restricted cash totaled $382.8 million at June 30, 2026 versus total debt of $276.8 million and gross Preferred Stock of $191.7 million. Management said available liquidity should cover foreseeable needs for at least twelve months.
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Operating cash flow improved
Six-month operating cash flow improved to positive $0.4 million from negative $33.8 million in the prior-year period. The improvement included a $100.3 million increase in accounts payable, partly offset by a $60.9 million increase in trade receivables and a $30.5 million decrease in advance billings.
What to watch
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Labor shortages pressure project margins
Gross margin fell to 14.6% in Q2 2026 from 30.0% in Q2 2025, as large projects carry higher completion costs. Management cited a nationwide skilled-labor shortage that increased construction costs and caused lower-than-expected productivity at certain job sites.
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Warrant volatility distorts earnings
Six-month 2026 loss from continuing operations was $65.4 million, despite $10.1 million of operating income, primarily because of a $64.4 million non-cash customer-warrant fair-value expense. The warrant adjustment is tied to stock-price movements and remains volatile.
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Cash conversion remains weak
Six-month operating cash flow was only $0.4 million, while investing cash flow was negative $9.9 million, primarily from fixed-asset purchases for BrightLoop projects. The cash-flow improvement depended in part on a $100.3 million increase in accounts payable and may reverse with project timing.
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Debt and financing needs persist
At June 30, 2026, total debt was $276.8 million and gross Preferred Stock was $191.7 million; the company also had $48.5 million of restricted cash pledged as collateral for letters of credit. Management noted that additional financing may not be available on favorable terms or at all.
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Material control weaknesses remain
Disclosure controls were not effective as of June 30, 2026 because previously reported material weaknesses had not been remediated. Management continues to hire professionals and consultants and enhance controls over contract accounting, reconciliations, journal entries and segregation of duties.
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Backlog conversion carries execution risk
The backlog of $2.569 billion is a leading indicator rather than a guarantee of future revenue; contracts may be canceled, modified or otherwise altered by customers. Of the backlog, $1.491 billion is scheduled for recognition after 2027, increasing long-duration execution and conversion exposure.
Management's outlook
The 10-Q provides no numeric revenue or EPS guidance. Management states that the current operating plan and available borrowings are expected to satisfy foreseeable liquidity and capital expenditure needs for at least the next twelve months. The separate August 10, 2026 earnings release raised full-year 2026 Adjusted EBITDA guidance to $80.0 million-$105.0 million, but that guidance is non-GAAP and is not presented as 10-Q guidance.
Earlier filings 4
10-K · March 16, 2026
Babcock & Wilcox completed a strategic simplification in Q4 2025 and now reports one segment ("B&W"), focusing on baseload power, aftermarket services and decarbonization technologies. For 2025 we calculate total…
10-Q · May 12, 2025
B&W reported revenue of $181.2M for the quarter ended March 31, 2025, up $16.9M (10.3%) year-over-year, with operating income of $5.85M but a GAAP net loss of $21.99M ($25.72M loss attributable to common stockholders).…
10-K · March 31, 2025
Babcock & Wilcox positions itself as a provider of renewable, environmental and thermal technologies with product focus areas including BrightLoop™ hydrogen, OxyBright™ and other ClimateBright™ solutions, and a stable…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.