Based on the Q3 2025 earnings call and recent financial data,
Babcock & Wilcox is doing exceptionally well with a major transformation underway. Here's the current state:
Strong Q3 2025 Performance
Adjusted EBITDA was 58% higher compared to Q3 2024 at $12.6 million, while operating income surged 315% to $6.5 million. The global parts and services business achieved the highest quarterly and year-to-date bookings, revenue, and gross profit in recent company history, with backlog rising 56% quarter over quarter to over $393 million. [
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Major Strategic Developments
Game-Changing AI Data Center Deal:
BW signed a limited notice to proceed with Applied Digital for a project valued at over $1.5 billion to design and install four 300-megawatt natural gas-fired power plants providing one gigawatt of power for an AI factory and data center, with plant operation targeted for 2028. [
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This deal adds $3-5 billion in AI data center opportunities to the pipeline, bringing total global pipeline to $10-12 billion including ClimateBright and BrightLoop technologies. [
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Significantly Improved Balance Sheet
Through asset dispositions and equity raises (including $65 million raised recently), BW has paid down or will fully pay the February 2026 notes by end of 2025 and plans to begin paying down the December 2026 bonds. Pro forma net debt will be $113.2 million, representing 0.8-1.6x targeted 2026 EBITDA. [
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Strong 2026 Outlook
Management is projecting $70-85 million in EBITDA from core business in 2026, representing 80% growth year-over-year from 2025, and this excludes any revenues from AI data center projects. [
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Market Positioning
The company is well-positioned with increasing demand for power in North America driving growth, particularly from AI data center expansion and increased baseload generation needs. [
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Bottom line: BW has transformed from a debt-burdened company into a growth story, with a cleaned-up balance sheet, record-breaking parts/services performance, and massive AI data center opportunities that could drive substantial revenue growth over the next 3-5 years.