BW

General Business & Market Tailwinds

• Growing demand for reliable power generation across utility, industrial, and AI/data center customer segments is driving strong top-line and operational momentum, with all Q2 2026 financial results exceeding both internal and consensus analyst expectations.
• Total project pipeline now exceeds $14 billion, including 4-6 gigawatts of new power generation opportunities. H1 2026 bookings hit $2.7 billion, up 1058% YoY, while Q2 2026 backlog reached $2.6 billion, up 533% YoY.

AI Data Center Project Progress

• The initial Base Electron data center project in North Dakota is progressing ahead of schedule and on budget; manufacturing of long-lead components (boilers, steam turbines) is advancing rapidly. Base Electron has submitted its conditional use permit, with on-site civil and mechanical construction planned to start in early 2027, followed by component delivery.
• Management expects a second data center project to receive full notice to proceed (NTP) in 2026. The company has secured manufacturing reservation rights for 1 gigawatt of 50 megawatt steam turbines from Siemens Energy, with first generator set delivery scheduled 12-14 months after reservation to accelerate future project timelines.

Core Business & Workforce Expansion

• Growing demand for reliable baseload power is driving increased utility investment in refurbishment, recommissioning, and continued operation of existing generation assets, creating sustained growth catalysts for the company's core parts and services segment.
• The company is expanding its workforce across engineering, project management, and business development, and is investing in securing skilled labor (welders, electricians) to support projected growth.

New Technology Commercialization

• The commercial-scale Bright Loop carbon capture/clean energy demonstration project in Massillon, Ohio remains a top strategic priority. Fabrication of major components is complete, and site construction is scheduled to begin in late 2026, with commercial operation expected in late 2027, positioning the technology for full commercial deployment.

Balance Sheet & Capital Allocation

• The company completed repurchase of the remaining $61.8 million in outstanding December 2026 bonds, and the Board of Directors authorized a $50 million share repurchase program in July 2026, reflecting a disciplined approach to debt reduction and confidence in the company's trajectory to build shareholder value.
• As of June 30 2026, total debt was $276.8 million, with total cash, cash equivalents, and restricted cash of $382.8 million, providing strong liquidity for growth.

• Management raised the full-year 2026 adjusted EBITDA target range, increasing it to $80 million to $105 million from the prior range, driven by stronger-than-expected Q2 results, faster-than-anticipated revenue recognition on the Base Electron project, and solid visibility for continued demand in the second half of 2026.
• Significant revenue growth for the Base Electron project is expected to begin in early 2027, once on-site construction commences and major component milestones are achieved.
• Commercial operation of the Bright Loop demonstration project is still targeted for late 2027, with potential future bookings for Bright Loop projects expected starting in 2028 through 2030.

Consolidated revenue for Q2 2026 was $319.7 million, a 130% increase year-over-year (YoY). Half-year 2026 consolidated revenue was $534.1 million, up from $287.5 million in H1 2025, driven primarily by a $131.7 million revenue contribution from the Base Electron large project, plus growing core parts and services demand. Core parts and services, the company's traditional cash-generating business, delivered sustained strong performance in H1 2026, growing alongside new large power generation projects. GAAP net income for Q2 2026 was $14.3 million, a $72.8 million YoY improvement. H1 2026 GAAP net loss was $62.7 million, an improvement from the $80.5 million H1 2025 net loss; the 2026 H1 loss stems from $77.4 million in non-cash warrant and stock-related costs, with adjusted net income of $14.7 million for the half. Adjusted EBITDA for Q2 2026 was $21.8 million, a $7.9 million YoY increase, while H1 2026 adjusted EBITDA hit $37.8 million, up from $17.9 million H1 2025.

• Industry-wide skilled labor shortages in the U.S. negatively impacted operational efficiencies and increased direct costs on one specific construction project during Q2 2026. Management has implemented immediate mitigations including union partnerships, incentive programs, rehiring of retired workers, and delayed retirement incentives to increase available qualified labor, but ongoing labor market tightness remains a risk for future projects.
• Sustained rapid growth in large project volume creates pressure across manufacturing and labor supply chains, requiring ongoing proactive planning and investment to maintain project timelines and cost targets.

Q: Can you outline how revenue will be recognized on the Base Electron project over coming quarters, and what the milestone timeline looks like? / A: More early revenue was recognized in Q2 than initially projected due to early completion of manufacturing milestones, leaving the project ahead of schedule. The bulk of project revenue will be recognized starting in early 2027, once on-site construction begins and major delivery milestones are met. This faster-than-expected early progress was one of the key drivers behind the full-year adjusted EBITDA guidance increase. /

Q: Can you elaborate on the 4-6 gigawatts of data center project pipeline, and how these opportunities compare to the Base Electron project? / A: The pipeline includes multiple active discussions and ongoing negotiations, with one to two projects expected to move to full NTP in 2026. Most upcoming projects use a phased enhanced combined cycle approach with 50 megawatt modular steam turbines, allowing customers to begin generating 1 gigawatt of power quickly, then add a combustion turbine later to double output to 2 gigawatts on the same site. The pipeline also includes larger coal-powered projects tied to data centers, a niche where B&W has unique market position. /

Q: What customer demand drivers are pushing for faster project delivery, and how does B&W's offering compete on cost and reliability? / A: AI data center customers need power online 3-5 years faster than traditional combined cycle gas projects can deliver. B&W's phased design provides much faster time-to-market, with efficiency and levelized cost of electricity very close to standard combined cycle plants. The design also offers better reliability: if one generation unit goes offline, the other continues operating, rather than losing full output like in a traditional combined cycle facility. /

Q: What is B&W's outlook for supply chain and labor capacity to support projected growth, and what investments are being made? / A: B&W maintains flexible manufacturing capacity for boilers across internal and third-party facilities, allowing it to scale for additional projects. The company has secured a 1 gigawatt steam turbine reservation with Siemens Energy, with delivery starting in 12-14 months, on favorable terms. For skilled labor, B&W is working closely with unions on recruiting, training, and incentive programs to ensure sufficient qualified welders and tradespeople are available for 2027 construction ramps, and unions have been very cooperative in addressing shortages. /

Q: What is the status of the Bright Loop commercial demonstration and its future pipeline? / A: Construction of the Massillon, Ohio commercial demonstration will begin in late 2026, with operation still on track for late 2027. There is strong interest from hyperscalers, oil and gas companies, and project developers in the technology, which can produce low-carbon steam from coal with captured CO2 for enhanced oil/gas recovery or sequestration. Hyperscalers are specifically interested in Bright Loop to meet future carbon capture requirements for data center power, with potential commercial bookings expected starting in 2028.