B&W Q2 2026 earnings: Large projects drive 130% revenue growth

Babcock & Wilcox Enterprises (NYSE: BW), or B&W, reported Q2 2026 revenue of $319.7 million, up 130% from $138.9 million a year earlier, while diluted EPS improved to $0.07 from a loss of $0.63. Net income reached $14.3 million and adjusted EBITDA increased 57% to $21.8 million, with higher large-project volume—including $100.7 million from Base Electron—providing the main revenue lift.

Core earnings data

Base Electron contributed about 31% of quarterly revenue, making the project a significant part of the year-over-year increase. Bookings and backlog also rose, indicating a larger contracted workload, although backlog can change as customers modify or cancel projects.

The swing from a $58.5 million net loss to a $14.3 million profit was not entirely operational. The prior-year quarter included a $51.1 million loss from discontinued operations, while Q2 2026 benefited from $6.0 million lower interest expense, a $5.9 million gain from changes in customer warrant fair value, and a $5.1 million improvement in tax expense.

Adjusted EBITDA and adjusted net income are non-GAAP measures. B&W also reported adjusted net income of $9.1 million after excluding non-cash warrant and other stock-related items.

Project activity and demand indicators

Large-project activity was the primary revenue driver. Management said the first Base Electron data-center project was ahead of expectations and on budget, with permitting underway and manufacturing progressing for boilers, steam turbines, and other long-lead components.

B&W also placed orders with Siemens Energy for an additional 1 gigawatt of steam turbines, with delivery expected over the next 12 to 15 months, in anticipation of another data-center opportunity. Management cited demand from AI data centers, utilities, industrial customers, and expanding economies as supporting opportunities across power-generation equipment, environmental technologies, and the higher-margin Global Parts and Services business.

The company ended the quarter with $2.6 billion of backlog and more than $14.0 billion in its global pipeline. The pipeline represents uncontracted opportunities that could reach a decision within 36 months, so it should not be treated as committed revenue. B&W also cautioned that backlog can be canceled, modified, or fulfilled over multiple years.

Revenue growth outpaced profitability

The increase in absolute profit was smaller than the increase in revenue. Cost of operations rose about 180% to $273.1 million, substantially faster than the 130% revenue increase, while selling, general and administrative expense was nearly unchanged at $33.7 million.

As a result, operating income rose about 69%, but operating margin narrowed from approximately 5.0% to 3.7%. Adjusted EBITDA margin also declined from about 10.0% to 6.8%. The quarter therefore showed substantial project-driven scale, but that scale did not translate proportionally into operating profit.

GAAP earnings also remain sensitive to customer warrant accounting. Q2 included a $5.9 million fair-value gain, but the six-month period recorded a $64.4 million fair-value expense. Consequently, despite the second-quarter profit, B&W still reported a six-month net loss of $62.7 million.

Cash flow and balance sheet

Cash-flow figures in the release cover the six months ended June 30 rather than Q2 alone. Operating activities generated $0.4 million during the first half of 2026, compared with a $33.8 million outflow a year earlier. The near-breakeven result included a $100.3 million increase in accounts payable that largely offset cash uses from accounts receivable, contracts in progress, and lower advance billings.

Cash, cash equivalents, and restricted cash totaled $382.8 million at June 30, compared with $201.4 million at the beginning of the year. However, the increase was primarily financing-led: B&W raised a net $259.8 million through common-stock issuance, and net financing cash flow was $191.4 million. The basic weighted-average share count increased to 142.3 million from 98.7 million.

B&W had $239.8 million of secured debt and bonds at quarter-end. The company said it would repurchase the remaining $61.8 million of bonds due December 2026 in August 2026. Its board also authorized a share-repurchase program of up to $50 million, although authorization does not require the company to buy that full amount.

2026 adjusted EBITDA target

B&W increased the upper end of its full-year 2026 adjusted EBITDA target, citing business momentum and additional opportunities. The release did not provide the complete previous range, preventing an exact comparison.

The company explicitly stated that this target is not intended as formal guidance and did not provide a reconciliation to a corresponding GAAP measure.

Recent insider transactions

The supplied six-month insider summary reports purchases of 1,135,973 shares across 14 transactions and sales of 1,155,382 shares in one transaction. That produced net selling of 19,409 shares, equal to 0.40% of reported insider holdings; total insider ownership was listed at approximately 4.68 million shares.

Recent transactions with a clearly reported action and amount are shown below. Derivative-security conversions are distinct from open-market purchases, and the transactions do not by themselves establish insiders’ views of the company’s prospects.

Risks investors should monitor

• Project execution and concentration: Base Electron represented about 31% of quarterly revenue. Delays, permitting issues, cost changes, or customer modifications could affect revenue timing and profitability.
• Margin pressure: Costs increased faster than revenue in Q2. Skilled-labor shortages, tariffs, inflation, supply-chain disruption, and construction productivity could place further pressure on project margins.
• Backlog and pipeline conversion: The $2.6 billion backlog is not guaranteed revenue, while the more than $14.0 billion pipeline remains uncontracted and may not convert on the expected schedule or at historical margins.
• Cash conversion: First-half operating cash flow was only slightly positive and benefited materially from higher accounts payable. Receivables and project working-capital requirements remain important variables.
• Accounting and capital-structure volatility: Customer warrant remeasurement can cause large swings in GAAP earnings, while recent equity issuance, debt repayment, and authorized repurchases can materially change per-share results and liquidity.

Summary

B&W’s Q2 2026 results were defined by a sharp increase in large-project revenue, a return to quarterly profitability, and substantial growth in backlog. The main counterpoint was weaker operating and adjusted EBITDA margins, while the stronger cash position came largely from equity financing rather than operating cash generation. Future results will depend on executing the Base Electron project, converting backlog and pipeline into profitable revenue, controlling project costs, and progressing toward the updated adjusted EBITDA target.