0001630805-26-000030
SEC filingRevenue grew 44% to $214.4M, but net loss widened to $79.6M due to warrant revaluation; strong bookings and backlog signal future growth.
For the three months ended March 31, 2026, Babcock & Wilcox reported revenue of $214.4 million, a 44.3% increase from $148.6 million in the prior-year period. The growth was primarily driven by an increase in large project volume, including $31.0 million from the Base Electron project, reflecting rising demand for electricity from fossil fuels due to AI, data centers, and expanding economies. Cost of operations increased by $50.1 million to $171.0 million, inline with higher revenue and product mix shift toward large projects. Selling, general and administrative expenses rose by $16.1 million to $44.4 million, largely due to higher stock-based compensation from an increase in the company's stock price. Research and development costs increased slightly to $0.8 million, mainly for BrightLoop investment. Operating loss improved marginally to $1.7 million from $1.8 million, as cost increases were mostly offset by higher revenue. Loss from continuing operations widened dramatically to $79.6 million from $15.6 million, driven by a $70.2 million non-cash charge for the change in fair value of customer warrants and a $2.2 million increase in income tax expense, partially offset by a $6.6 million reduction in interest expense.
The company operates as a single reporting segment. Revenue growth was broad-based, with large project volume being the primary driver. Bookings jumped to $2,512.5 million in Q1 2026 from $121.3 million in Q1 2025, a massive increase reflecting new contract wins. Backlog reached $2,728.8 million as of March 31, 2026, compared to $467.9 million a year earlier. Of the backlog, $570.3 million is expected to be recognized in 2026, $603.6 million in 2027, and $1,554.9 million thereafter. This strong backlog provides a multi-year revenue pipeline.
Management did not provide explicit financial guidance but noted that cash flows from operations were $17.8 million in Q1 2026 versus a use of $8.5 million in Q1 2025. The company believes its current operating plan and borrowings under the Credit Agreement will satisfy foreseeable liquidity needs for at least the next twelve months. The significant increase in bookings and backlog suggests robust future revenue, though profitability will continue to be impacted by non-cash warrant adjustments and project mix. The company is focused on large project execution and technology investments like BrightLoop. Discontinued operations (Vølund, Diamond Power, ASH, Solar) have been sold, simplifying the business. Overall, the MD&A indicates a positive revenue trajectory but ongoing challenges in converting revenue to net income due to non-operational items.
Cash and cash equivalents stood at $106.5M as of March 31, 2026, up from $89.5M at year-end 2025. Total restricted cash (current and long-term) was $88.3M, primarily for letters of credit collateral and project escrows. Total debt was $275.9M, including $69.1M in current Senior Notes due 2026, $149.3M in Senior Notes due 2030, and $56.8M in other borrowings. The company's stockholders' deficit was $172.1M, reflecting accumulated losses and treasury stock. Inventory was $60.7M, relatively flat sequentially.
The company disclosed $2.7B in remaining performance obligations (backlog), with expected recognition of 21% in 2026, 22% in 2027, and 57% thereafter. The largest individual contract is the Base Electron agreement valued at $2.4B (including $2.0B variable charges), under which $31M revenue was recognized in Q1 2026. No purchase commitments were disclosed in the notes.
During Q1 2026, B&W repurchased $15.0M of its 6.50% Senior Notes due 2026. Preferred stock dividends totaled $3.7M. The company also issued $34.1M of common stock via an at-the-market offering (3.9M shares). Capital expenditures were $7.1M (3.3% of revenue). Net debt repayment from financing activities (excluding equity) was approximately $43.7M. Subsequent to quarter-end, an additional $1.9M of Senior Notes were repurchased.
The company operates as a single reportable segment, B&W. Revenue by type in Q1 2026: Parts $66.2M, Projects $83.4M, Construction $64.8M. Year-over-year revenue growth of 44.3% was driven by the Base Electron project and other new business. The segment reported a loss from continuing operations of $79.6M, including a $70.2M non-cash charge from the change in fair value of customer warrants related to the Applied Digital/Base Electron agreement. The effective tax rate was -5.5% due to mix of profitable foreign operations and U.S. losses.
Despite a net loss of $76.9M, operating cash flow was positive $17.8M due to significant non-cash adjustments: $70.2M change in fair value of customer warrants, $13.2M stock-based compensation, and $2.5M depreciation. Working capital changes provided a net inflow of $19.6M, driven by a $39.6M increase in accounts payable partially offset by receivables and contracts in progress. Capex of $7.1M was higher than the prior year, indicating continued investment. Financing activities used $20.3M, including $29.1M in loan repayments and $15.0M for Senior Note buybacks, partially offset by $34.1M in common stock issuance. Preferred dividends were $3.7M. The company maintained a cash position of $194.8M at quarter end.