Core Insights - Babcock & Wilcox (B&W) is expanding into the AI data center market, leveraging its natural gas technologies to meet the increasing power demands, with a pipeline of opportunities exceeding $3 billion [2][4][5] - The company reported a revenue of $149.0 million for Q3 2025, a slight decrease from $152.6 million in Q3 2024, but showed significant improvements in operating income and adjusted EBITDA [2][6] - B&W's backlog reached $393.5 million, marking a 56% increase compared to the same period last year, indicating strong demand for its thermal projects and services [4][5] Financial Performance - Revenue for Q3 2025 was $149.0 million, down from $152.6 million in Q3 2024, primarily due to lower large project volumes [2][6] - Global Parts & Services revenue increased to $68.4 million from $61.7 million in Q3 2024, driven by rising electricity needs from AI and expanding economies [2][6] - The net loss from continuing operations was $2.3 million, an improvement from a loss of $7.9 million in Q3 2024, with loss per share decreasing from $0.13 to $0.06 [2][6] Strategic Developments - B&W signed a limited notice to proceed for a $1.5 billion contract with Applied Digital to deliver one gigawatt of energy for an AI data center project, with full contract release expected in Q1 2026 [2][4] - A strategic partnership with Denham Capital was announced to convert coal plants to natural gas for powering AI data centers across North America and Europe [4][5] - The company anticipates a full-year 2026 adjusted EBITDA target range of $70 million to $85 million, reflecting approximately 80% year-over-year growth from its core business [4][5] Market Position and Outlook - B&W's total global pipeline now exceeds $10 billion, bolstered by the new AI data center project and ongoing demand for thermal energy solutions [3][4][5] - The company is well-positioned to capitalize on the growing demand for baseload generation driven by AI and data centers, with expectations for continued growth in parts and services revenue [5][6] - Recent asset sales, including Diamond Power International for $177 million and Allen-Sherman-Hoff for $29 million, have improved the company's balance sheet and liquidity [5][6]