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BWXT (BWXT) Revenue Jumps 12%

Core Insights - BWX Technologies reported strong Q2 2025 results, with revenue of $764.0 million, exceeding analyst estimates of $711.1 million, and non-GAAP EPS of $1.02, surpassing the consensus of $0.79 [1][2] - The company's backlog reached a record $6.0 billion, prompting an increase in revenue and earnings forecasts for 2025 [1][8] - Despite strong overall growth, challenges in commercial profit margins were noted, particularly due to raw material cost pressures [1][5] Financial Performance - Non-GAAP EPS for Q2 2025 was $1.02, a 24% increase from $0.82 in Q2 2024 [2] - GAAP revenue was $764.0 million, reflecting a 12% year-over-year growth from $681.5 million [2] - Adjusted EBITDA rose 16% to $145.9 million compared to $126.2 million in Q2 2024 [2][7] - Free cash flow significantly improved to $126.3 million from $35.5 million in Q2 2024, marking a 256.1% increase [2][7] Business Segments - BWX Technologies operates in two main segments: Government Operations and Commercial Operations [3] - Government Operations generated $589.0 million in GAAP revenue, up 9% year-over-year, with a record backlog of $4.44 billion [5] - Commercial Operations reported revenue of $176.1 million, a 24% increase from Q2 2024, but faced a 59% drop in operating income due to unfavorable project mix and increased costs [5] Strategic Developments - The acquisition of Kinectrics in May 2025 aims to enhance BWXT's capabilities in nuclear lifecycle services and radiopharmaceuticals [6] - The consolidated order backlog reached a record $6.0 billion, supported by recent acquisitions [6] - The company is expanding manufacturing capabilities, including scaling up operations at its Cambridge facility in Canada [6] Financial Outlook - Management raised its 2025 financial guidance, projecting revenue near $3.1 billion and non-GAAP EPS of $3.65–$3.75 [8] - Adjusted EBITDA is now expected to be between $565 million and $575 million, with free cash flow guidance increased to $275–$285 million [8] - Key factors to monitor include margin recovery in Commercial Operations and the integration of newly acquired businesses [8]