BWX Technologies, Inc. Q1 FY2026 earnings call

We had strong first quarter 2026 results with revenue growth 26%, adjusted EBITDA up 14%, and earnings per share up 22%. Outperformance driven by improved throughput, etc. Announced acquisition of Precision Components Group. Government operations had strong bookings. Commercial operations demand accelerating, Connetrix exceeding acquisition business case.

Government operations: First quarter revenue was up 4%, and adjusted EBITDA was up 1% during the quarter. Commercial operations: Revenue was up a robust 121%, including 39% organic growth, reflecting increases in both commercial power and medical and contribution from Connetrix.

Expect revenue of at least $3.75 billion in 2026, high teens vs 2025. Government operations expect low teens growth, commercial operations revenue growth increased to ~30%. Adjusted EBITDA guidance revised to $650 million to $665 million. Full-year results expected more back-half weighted. Free cash flow expected $315 million to $330 million.

Our first question comes from Matt Akers from BNP Paribas.

Q: Did you say how much you're planning to pay for PCG? And on U.S. capacity build-out?

A: Purchase price roughly around $200 million. On U.S. capacity, presently expanding Cambridge plant, looking at Mount Vernon for larger components. Next question from Jeffrey Campbell from Seaport Research Partner.

Q: Would new commercial facility have limitations for customers like Hitachi?

A: No limitations, localized in U.S. creates competitive advantage.

Q: Any positive effects for naval business from PCG acquisition?

A: PCG has qualified nuclear workforce, capacity, and manufacturing credentials beneficial to naval customer. Next question from Bob Labick with CGS Securities.

Q: Decided yet on U.S. capacity build-out amount? Capital needed?

A: Presently expanding Cambridge, Mount Vernon would be ~100,000 sq ft, budget more than Cambridge.

Q: Any thought on customer funding for commercial capacity growth?

A: Have balance sheet to do what needed. Next question from Pete Skibitsky from Olympic Global.

Q: On Air Force ANPI awards, disappointed not getting award?

A: Didn't pursue those opportunities, focused on own reactors. Next question from Mark Bianchi from DD Cowen.

Q: On Triso process and competitive positioning?

A: Only producer of triso at scale, considering capacity expansion.

Q: Timeline for Japan GE Hitachi orders?

A: Expect to receive orders this year but hurdles to clear. Next question from Jeff Grampy from Northland Capital Markets.

Q: How long for Mount Vernon to be operational? Importance for winning U.S. business?

A: Takes 2-3 years, localization important for U.S. projects.

Q: Enrichment project timeline?

A: Centrifuge manufacturing development facility progress over next few years. Next question from David Strauss with Wells Fargo.

Q: On medical growth, specific products? Update on Tech 99?

A: Medical growth in strontium, germanium, etc., Tech 99 progressing.

Q: On defense Golden Dome contract?

A: Awarded for infrastructure scope, potential for microreactors. Next question from Scott from Deutsche Bank.

Q: Connectrix revenue from power and grid infrastructure? Growth outlook?

A: ~10% of Connectrix business, growing, interested in wind power cable testing.

Q: Direct exposure to data center build-out?

A: Suspect have exposure. Next question from Jed Dorsheimer with William Blair.

Q: On supply chain and project delivery risk?

A: Supply chain risk manageable, bigger risk on EPC side. Next question from Peter Arman with Bayer.

Q: Update on Darlington schedule? Thoughts on budgets?

A: Darlington project reasonably on track, follow-on orders soon. Encouraged by DoD and DOE budgets. Next question from Ron Epstein with Bank of America.

Q: Changes on Korean nuclear submarine work? M&A interest?

A: No seen on Korean submarine work. M&A looking at adjacent opportunities to expand capabilities. Next question from Andre Madrid with BTIG.

Q: PCG mix pivot to commercial and margin uplift?

A: Can pivot mix, immediate opportunity to move work in-house, margin could be accretive.