BWX Technologies(BWXT) - 2025 Q2 - Quarterly Results

Performance Highlights and Management Commentary BWX Technologies reported exceptionally strong Q2 2025 financial results, driven by solid operational performance and robust bookings, leading to a record backlog - Management highlighted exceptionally strong Q2 2025 financial results, driven by solid operational performance and robust bookings, leading to a record backlog[3] - The company is experiencing accelerating demand for nuclear solutions in global security, clean energy, and medical markets[4] Q2 2025 Key Performance Indicators | Metric | Value | Note | | :--- | :--- | :--- | | Revenues | $764.0 million | - | | Net Income | $78.5 million | - | | Adjusted EBITDA | $145.9 million | Non-GAAP | | GAAP EPS (Diluted) | $0.85 | - | | Non-GAAP EPS | $1.02 | - | | Backlog | $6.0 billion | Record high, up 70.2% YoY | | Acquisition | Kinectrics, Inc. | Closed on May 20, 2025 | Detailed Financial Results Analysis (Q2 2025) The company's consolidated revenue grew 12% year-over-year to $764.0 million, with increases in both Government and Commercial Operations. While Government Operations saw an 18% rise in operating income, Commercial Operations experienced a 59% decline due to revenue mix and growth investments. Overall consolidated operating income increased by 4%. The company also saw a significant 256% increase in free cash flow, driven by higher net income and effective working capital management Financial Results Summary In Q2 2025, BWXT's consolidated revenue increased by 12% to $764.0 million compared to Q2 2024. GAAP Net Income rose by 7% to $78.5 million, and GAAP Diluted EPS grew by 8% to $0.85. Non-GAAP metrics showed stronger growth, with Non-GAAP EPS up 24% to $1.02 and Adjusted EBITDA up 16% to $145.9 million Q2 2025 vs Q2 2024 Financial Summary (in millions, except per share amounts) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Consolidated Revenues | $764.0 | $681.5 | 12% | | Consolidated Operating Income (GAAP) | $102.4 | $98.8 | 4% | | Net Income (GAAP) | $78.5 | $73.0 | 7% | | EPS (Diluted, GAAP) | $0.85 | $0.79 | 8% | | Adjusted EBITDA (Non-GAAP) | $145.9 | $126.2 | 16% | | EPS (Non-GAAP) | $1.02 | $0.82 | 24% | | Operating Cash Flow | $159.0 | $65.9 | 141% | | Free Cash Flow (Non-GAAP) | $126.3 | $35.5 | 256% | Revenue Analysis Second quarter revenue increased across both segments. Government Operations revenue grew 9% to $589.0 million, driven by higher naval nuclear component production and the A.O.T. acquisition. Commercial Operations revenue rose 24% to $176.1 million, fueled by commercial nuclear components, medical sales, and the Kinectrics acquisition, though partially offset by lower field services activity - Government Operations revenue growth was primarily due to increased naval nuclear component production, special materials processing, and the A.O.T. acquisition[8] - Commercial Operations revenue growth was driven by higher commercial nuclear components, medical sales, and the Kinectrics acquisition, partially offset by the timing of life-extension and outage projects[8] Operating Income and Adjusted EBITDA Analysis GAAP operating income increased due to strong performance in Government Operations, which was partially offset by lower income from Commercial Operations and higher corporate expenses. The decrease in Commercial Operations' income was mainly attributed to revenue mix and growth investments. Non-GAAP operating income and adjusted EBITDA also increased, primarily driven by the higher revenue and solid operational performance in the Government segment Q2 2025 Operating Income & Adjusted EBITDA by Segment (in millions) | Segment | Operating Income (GAAP) | % Change YoY | Adjusted EBITDA (Non-GAAP) | % Change YoY | | :--- | :--- | :--- | :--- | :--- | | Government Operations | $109.4 | 18% | $133.0 | 23% | | Commercial Operations | $6.9 | (59)% | $16.2 | (28)% | - The decrease in Commercial Operations operating income was mainly due to revenue mix related to the timing of life-extension projects and growth investments[11] Earnings Per Share (EPS) Analysis Both GAAP and Non-GAAP EPS increased in the second quarter. The growth was driven by higher operating income, higher other income, and a lower tax rate, which were partially offset by an increase in interest expense Q2 2025 Earnings Per Share (Diluted) | Metric | Q2 2025 | Q2 2024 | % Change YoY | | :--- | :--- | :--- | :--- | | GAAP EPS | $0.85 | $0.79 | 8% | | Non-GAAP EPS | $1.02 | $0.82 | 24% | Cash Flow and Capital Expenditures Analysis Operating cash flow saw a substantial increase in the second quarter, primarily due to higher net income, effective working capital management, and the timing of awards. Capital expenditures rose slightly, reflecting ongoing growth investments, including the expansion of the Cambridge manufacturing plant Q2 2025 Cash Flow Summary (in millions) | Metric | Q2 2025 | Q2 2024 | % Change YoY | | :--- | :--- | :--- | :--- | | Operating Cash Flow | $159.0 | $65.9 | 141% | | Capital Expenditures | $32.7 | $30.4 | 8% | | Free Cash Flow | $126.3 | $35.5 | 256% | Dividend Declaration In the second quarter of 2025, BWXT paid dividends of $23.1 million, or $0.25 per common share. The Board of Directors subsequently declared another quarterly cash dividend of $0.25 per common share, payable in September 2025 - The BWXT Board of Directors declared a quarterly cash dividend of $0.25 per common share[13] - The dividend is payable on September 5, 2025, to shareholders of record on August 18, 2025[13] Updated 2025 Financial Guidance Based on strong year-to-date performance and a positive outlook, BWXT has raised its full-year 2025 guidance. The company now expects higher revenue, adjusted EBITDA, and non-GAAP EPS, and has also increased the lower end of its free cash flow guidance range Updated Full-Year 2025 Guidance (in millions, except per share amounts) | Metric | 2024 Results | Current 2025 Guidance | Prior 2025 Guidance | | :--- | :--- | :--- | :--- | | Revenue | $2,704 | ~$3,100 | ~$3,000 | | Adjusted EBITDA | $499 | ~$565 - $575 | ~$550 - $570 | | Non-GAAP EPS | $3.33 | ~$3.65 - $3.75 | ~$3.40 - $3.55 | | Free Cash Flow | $255 | $275 - $285 | $265 - $285 | - The Company does not provide GAAP guidance because it is unable to reliably forecast most of the items that are excluded from GAAP to calculate non-GAAP results[14] Financial Statements The condensed consolidated financial statements provide detailed financial data for the three and six months ended June 30, 2025, compared to the same periods in 2024. This includes the Statements of Income, Statements of Cash Flows, and Balance Sheets, offering a comprehensive view of the company's financial performance and position Condensed Consolidated Statements of Income For the three months ended June 30, 2025, revenues increased to $764.0 million from $681.5 million in the prior year. Net income attributable to BWX Technologies, Inc. rose to $78.4 million, or $0.85 per diluted share, compared to $73.0 million, or $0.79 per diluted share, in Q2 2024 Q2 2025 Income Statement Highlights (in thousands) | Line Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenues | $764,039 | $681,465 | | Operating Income | $102,424 | $98,806 | | Net Income Attributable to BWXT | $78,388 | $72,972 | | Diluted EPS | $0.85 | $0.79 | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash provided by operating activities was $209.7 million, a significant increase from $98.9 million in the same period of 2024. Net cash used in investing activities was substantially higher at $629.5 million, primarily due to a $538.2 million acquisition. Net cash provided by financing activities was $385.8 million, driven by new debt borrowings Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $209,693 | $98,920 | | Net Cash Used in Investing Activities | $(629,480) | $(60,624) | | Net Cash Provided by (Used in) Financing Activities | $385,826 | $(65,004) | Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $3.70 billion from $2.87 billion at year-end 2024, largely due to increases in Goodwill, Intangible Assets, and Property, Plant, and Equipment, reflecting recent acquisitions. Total liabilities also increased to $2.52 billion from $1.79 billion, primarily from a rise in long-term debt to fund these activities. Total stockholders' equity grew to $1.18 billion Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $996,885 | $929,997 | | Total Assets | $3,699,072 | $2,869,924 | | Total Current Liabilities | $590,186 | $474,201 | | Long-Term Debt | $1,519,728 | $1,042,970 | | Total Liabilities | $2,515,166 | $1,789,520 | | Total Stockholders' Equity | $1,183,906 | $1,080,404 | Business Segment Information For Q2 2025, Government Operations revenue grew to $589.0 million with segment income of $109.4 million. Commercial Operations revenue was $176.1 million with segment income of $6.9 million. The company reported a record total backlog of $6.0 billion, a 70% increase year-over-year, driven by strong bookings of $1.64 billion in the quarter, with Government Operations contributing $1.41 billion of that total Q2 2025 Segment Revenue and Income (in thousands) | Segment | Revenues | Segment Income | | :--- | :--- | :--- | | Government Operations | $588,959 | $109,417 | | Commercial Operations | $176,139 | $6,877 | Backlog and Bookings as of June 30 (in thousands) | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Backlog | $6,015,191 | $3,534,247 | 70.2% | | Total Bookings (Q2) | $1,640,481 | $580,204 | 182.7% | Exhibit 1: Non-GAAP Reconciliations This section provides detailed reconciliations of GAAP financial measures to their non-GAAP counterparts. It includes adjustments for items such as restructuring costs, acquisition-related costs, and acquisition-related amortization to derive non-GAAP operating income, EPS, and adjusted EBITDA. These tables offer transparency into how management assesses the company's operational performance Reconciliation of Non-GAAP Operating Income and EPS For Q2 2025, GAAP Net Income of $78.5 million was adjusted for restructuring, transformation, and acquisition-related costs to arrive at a Non-GAAP Net Income of $93.2 million. This resulted in a Non-GAAP Diluted EPS of $1.02, compared to the GAAP Diluted EPS of $0.85 Q2 2025 GAAP to Non-GAAP EPS Reconciliation | Item | Per Share Amount | | :--- | :--- | | Diluted GAAP EPS | $0.85 | | Restructuring & Transformation Costs | $0.08 | | Acquisition Related Costs | $0.06 | | Acquisition Related Amortization | $0.02 | | Diluted Non-GAAP EPS | $1.02 | Reconciliation of Consolidated Adjusted EBITDA The reconciliation to Consolidated Adjusted EBITDA for Q2 2025 starts with GAAP Net Income of $78.5 million. After adding back taxes, interest, depreciation & amortization, and other non-GAAP adjustments, the resulting Adjusted EBITDA was $145.9 million, compared to $126.2 million in Q2 2024 Q2 2025 Adjusted EBITDA Reconciliation (in millions) | Item | Amount | | :--- | :--- | | Net Income (GAAP) | $78.5 | | Provision for Income Taxes | $19.3 | | Other – net | $(6.5) | | Interest Expense | $11.7 | | Depreciation & Amortization | $27.3 | | Non-GAAP Adjustments | $16.2 | | Adjusted EBITDA (Non-GAAP) | $145.9 | Reconciliation of Reporting Segment Adjusted EBITDA Adjusted EBITDA for the Government Operations segment was $133.0 million in Q2 2025, up from $108.2 million in the prior year. The Commercial Operations segment's Adjusted EBITDA was $16.2 million, a decrease from $22.5 million in Q2 2024 Q2 2025 Segment Adjusted EBITDA (in millions) | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Government Operations | $133.0 | $108.2 | | Commercial Operations | $16.2 | $22.5 | | Unallocated Corporate | $(3.3) | $(4.5) | Reconciliation of Consolidated Free Cash Flow For the second quarter of 2025, Free Cash Flow was calculated by taking Net Cash Provided by Operating Activities of $159.0 million and subtracting Purchases of Property, Plant and Equipment of $32.7 million, resulting in a Free Cash Flow of $126.3 million Q2 2025 Free Cash Flow Reconciliation (in millions) | Line Item | Amount | | :--- | :--- | | Net Cash Provided By Operating Activities | $159.0 | | Purchases of Property, Plant and Equipment | $(32.7) | | Free Cash Flow | $126.3 | Company Information and Disclosures This section provides important context for investors, including definitions of the non-GAAP financial measures used throughout the report, such as adjusted EBITDA, non-GAAP EPS, and free cash flow. It also contains a standard forward-looking statements disclaimer, outlining potential risks and uncertainties that could affect future results, and a brief overview of the company's business and operations - The company provides non-GAAP measures like adjusted EBITDA, non-GAAP EPS, and free cash flow to supplement GAAP results, believing they offer meaningful insight into operational performance[18] - The forward-looking statements caution investors about risks and uncertainties, including federal budget uncertainty, demand for nuclear products, and supply chain disruptions, that could cause actual results to differ materially from guidance[24][25] - BWXT is a manufacturing and engineering innovator providing nuclear solutions for global security, clean energy, nuclear medicine, and space exploration, with nearly 10,000 employees across the U.S., Canada, and the U.K[26]