Babcock & Wilcox Enterprises, Inc. Q3 FY25 Results

This initial project with Applied Digital represents an exciting and transformational opportunity to broaden B&W’s customer base as the Company expands into the rapidly evolving AI Data Center space. For the third quarter, we delivered strong operating results while displaying continued core business momentum and significant margin improvement. Adjusted EBITDA and Operating Income significantly outperformed Company and consensus expectations this quarter. Our growing backlog, which was 56% higher compared to the same period last year, benefited from increasing demand across Thermal projects, upgrades and construction, as baseload generation needs in North America continue to accelerate. Our core parts, services and construction businesses continued to excel in the third quarter, and we anticipate further seasonal strength through the fourth quarter of 2025 with tailwinds from rising global energy needs fueling demand for our offerings. During the third quarter, our Global Parts & Services achieved the highest quarterly and year-to-date bookings, revenue, gross profit and EBITDA in recent company history. In addition, we paid down over $70 million of bonds due February 2026, and plan to continue to buy back remaining bonds in December as announced today. We believe B&W is in a unique position to capitalize on the growing demand for baseload generation in North America and across the world. The increasing need for power and electricity fueled by demand from artificial intelligence, data centers and expanding economies are key drivers for growth across our broad range of technologies. Based on this momentum, we anticipate 2026 Adjusted EBITDA from our core business in the range of $70 million to $85 million, showing significant sequential growth over 2025. This range does not include any AI Data Center projects, which, when contracted, would serve as upside to this forecast. B&W’s recent data center project with Applied Digital demonstrates the core strengths of our Company, including our ability to provide reliable and efficient power generation solutions to our customers, and our extensive engineering, construction and project management experience. We remain optimistic about the significant upside across our business through the remainder of 2025 and into 2026 due to expected increases in parts and services revenue, as well as known data center projects in our pipeline. We believe this extended demand for our technology and services continues to position us for sustained success and provides B&W with a strong outlook moving forward. This quarter, we completed the previously announced sale of Diamond Power International for gross proceeds of $177 million and we just completed the sale of Allen-Sherman-Hoff (ASH) for gross proceeds of $29 million. Both of these sales further improve our balance sheet and reinforce the value of our underlying assets as we re-capitalize our businesses going forward. The proceeds of the Diamond and ASH sales allow us to continue to pay down our existing debt obligations. We remain intently focused on our strategic vision and continue to explore the sale of other non-strategic assets, as well as potential refinancing options to reduce our current and long-term debt obligations. We are seeing strong global demand for our diverse portfolio of technologies and as a result of recent data center opportunities, our global pipeline has increased to over $10.0 billion. We continue to make progress on converting this pipeline of identified project opportunities into bookings, as displayed by our strong base business and backlog results this quarter. We expect industry tailwinds and generation demand to continue to increase in the coming years, and we believe these tailwinds, coupled with our higher margins and improved cash flows, provide a strong foundation for B&W to grow in the remainder of 2025 and beyond.

We’re proud to partner with B&W, a company with nearly 160 years of proven leadership in power generation. Their advanced boiler and steam turbine technology delivers efficiency on par with the simple-cycle gas turbines we evaluated – while enabling faster deployment. This partnership enhances our ability to add more capacity to current and future sites, giving Applied Digital a distinct speed-to-market advantage in bringing power generation online.”