I would now like to turn the conference over to your host, Sharyn Brooks, B&W's Director of Communications. Thank you. You may proceed, Ms. Brooks.
Thank you, Ellen. Thanks to everyone for joining us on Babcock & Wilcox Enterprises' first quarter 2026 earnings conference call. I'm Sharyn Brooks, Director of Communications. Joining the call today are Kenneth Young, B&W's Chairman and Chief Executive Officer, and Cameron Frymyer, Chief Financial Officer, to discuss our first quarter results. During this call, certain statements we make will be forward-looking. These statements are subject to risks and uncertainties, including those set forth in our safe harbor provision for forward-looking statements that can be found at the end of our earnings press release and in our quarterly report on Form 10-Q that was filed with the SEC earlier today. Additionally, except as required by law, we undertake no obligation to update any forward-looking statement. We also provide non-GAAP information regarding certain historical and targeted results to supplement the results provided in accordance with GAAP.
This information, which includes our discussion of adjusted EBITDA, adjusted net income, and net debt, should not be considered superior to or as a substitute for the comparable GAAP measures. A reconciliation of historical non-GAAP measures can be found in our first quarter 2026 earnings release published earlier today and in our company overview presentation filed on Form 8-K, which is posted on the investor relations section of our website at babcock.com. Please also see our first quarter 2026 earnings release published on May 11, 2026, for further information regarding our bookings and backlog. I will now turn the call over to Kenneth.
Thanks, Sharyn. Well, good afternoon, everyone, and thanks for joining us on our first quarter 2026 earnings call. We are very pleased to report one of the strongest first quarter performances in recent company history. Babcock & Wilcox continued to see significant growth in the quarter, driven by high demand for electrical generation from utility, industrial, and AI data center customers. In addition, we also achieved strong operating results supported by continued momentum in our core business and ongoing debt reductions as well. Our quarterly results were highlighted by revenue and adjusted EBITDA that exceeded company and street expectations. Adjusted EBITDA was $16.1 million for the first quarter, which was a 296% increase compared to the first quarter of 2025.
Our revenues for the quarter came in at $214 million, which is a 44% increase compared to the first quarter of 2025. We also achieved positive adjusted net income from continued operations of $2.2 million after removing $81.8 million of costs associated with increased non-cash warrant and stock appreciation rights valuation, both of which are directly due to the significant stock price increase in the first quarter of 2026. These top-line metrics captured the recent tailwinds we've seen across our business and illustrate B&W's growth trajectory moving forward as we continue to capitalize on strong global demand for parts and services, new baseload generation, and behind-the-meter AI data center projects. These recent tailwinds can also be seen in our pipeline, bookings and backlog as well, which saw significant acceleration during the first quarter of 2026.
Our total pipeline grew by more than 17% to over $14 billion, including new AI data center opportunities. Our bookings and backlog values continued to surge, fueled by our core business growth and development of our Base Electron project in North Dakota, as we are in further discussions with other hyperscaler customers as well. In the first quarter of 2026, we had bookings of $2.5 billion, which is more than a 1,900% increase compared to the first quarter of 2025. Additionally, our backlog was $2.7 billion in the first quarter of 2026, which is a 483% increase compared to the first quarter of 2025.
We believe our results reflect strong global demand for B&W's technologies, Combined with the increased demand for power generation, gives us a solid foundation for continued growth this year and for many years to come. Our core business, excluding data centers, continued to excel as our parts and services saw elevated demand from the increased operation of baseload generation in North America and beyond. Rising energy demand from consumers, industries, and grid-dependent AI data centers is prompting utilities to recondition and recommission coal-fired generation assets to help meet accelerating load growth. Existing coal plants in the U.S. are currently operating at capacity factors of around 50%, highlighting a significant source of underutilized generation capacity available to support expanding electricity needs. At the same time, elevated natural gas prices are driving improved economics of coal-based generation.
This has increased utilization and created additional demand for our core business offerings. The rising demand for power across North America serves as a catalyst for B&W's continued growth, positioning us to play a critical role in supporting AI data center expansion and meeting increased baseload generation needs in the years ahead. Our project with Base Electron is progressing favorably as boiler manufacturing and steam turbines move forward. Siemens Energy continues to progress turbine fabrication and other long lead time items such as boiler pressure parts are advancing as planned. Most of the constructions, including civil and mechanical, is scheduled for 2027 to 2028. The impact of AI data center growth on B&W is truly profound as we added over $2 billion in additional AI data center opportunities in our pipeline from hyperscalers and utility customers.
As I mentioned before, we remain in active discussions with different AI data center customers regarding potential bookings in 2026. In the first quarter of 2026, we paid off $15 million in outstanding bonds that are due in December of 2026. This is the continuation of our bond buybacks, and we expect to fully pay off the remaining $69 million in outstanding December 2026 bonds in a timely fashion. Including these bond repurchases, we have significantly reduced our secured debt and unsecured bonds by 87% in the first quarter of 2026, resulting in net debt of $42.4 million at the end of the quarter. These recent debt payments bring our net debt to below 1 times our trailing twelve-month adjusted EBITDA.
Our efforts to progress our BrightLoop initiatives are moving forward as we further the commercial development of existing projects and continue working to improve the overall operational effectiveness of these technologies to produce low-cost hydrogen or steam. We are building momentum around the use of chemical looping as a means to convert solid and gas fuels to either hydrogen or steam generation while simultaneously capturing the CO2 that can be used for enhanced oil or methane recovery and other beneficial uses. The commercial scale demonstration of BrightLoop at our Massillon, Ohio project still remains a key priority for B&W as we continue to position the company for expanded growth opportunities in the years ahead. I'll now turn the call over to Cameron to discuss the financial details of the first quarter of 2026. Cameron?
Thanks, Kenny. I am pleased to review our first quarter of 2026 financial results, further details of which can be found in the 10-Q that was filed with the SEC this morning. Our first quarter of 2026 consolidated revenues were $214.4 million, which is a significant increase compared to a revenue of $148.6 million in the first quarter of 2025. The increase is primarily driven by large project volume, including $31 million from Base Electron and the increasing need for electricity from fossil fuels driven by the demand from AI data centers and expanding economies. Our core parts and services continue to perform well, delivering the strongest first quarter revenues in recent history. This development comes as higher demand from consumers, industrials, and AI data centers drive increased coal baseload generation.
Continued growth in our parts and services is expected throughout 2026. Our operating loss in the first quarter of 2026 was $1.7 million, which is relatively flat compared to an operating loss of $1.8 million in the first quarter of 2025. Net loss from continuing operations in the first quarter of 2026 was $79.6 million, compared to a net loss of $15.6 million in the first quarter of 2025. This increase in net loss is attributed to $81.8 million of non-cash warrants and other stock-related costs that were recorded this quarter due to the increase in our stock performance. Excluding the impact of these stock warrants and other stock-related costs, B&W reported adjusted net income from continuing operations of $2.2 million.
Adjusted EBITDA from continuing operations was $16.1 million in the first quarter of 2026, compared to $4 million in the first quarter of 2025. I'll now turn to the balance sheet, cash flow, and liquidity. Total debt on our balance sheet at March 31, 2026 was $275.9 million, which includes unamortized fees, unamortized gains from the bond swap done in 2025. Excluding these fees, gains, and leases, our secured debt and senior notes total $237.2 million, of which $69.1 million is current, which, as Kenneth Young stated earlier, we will be paid off within the year.
The company had cash equivalents, and restricted cash balance of $194.8 million, giving us net debt as of March 31st, 2026 of $42.4 million against our secured debt and senior notes. With that, I'll now turn the call back over to Kenneth Young.
Thanks, Cameron. Well, in closing, we are encouraged by a strong start to 2026. Our core business continues to see sustained opportunity fueled by the evolving need for power generation and growth in areas such as the AI data center space. B&W remains focused on our objectives and uniquely positioned to capitalize on this current landscape. Our pipeline remains robust, exceeding $14 billion in project opportunities, with significant tailwinds bolstered by the growing impact of AI data centers. Meanwhile, our bookings and backlog continue to convert at a strong pace, and we expect that momentum to continue throughout 2026. As we celebrate B&W's 160th year, I would like to recognize our employees around the world, past and present, who have made this a milestone possible.
Their expertise, commitment to working safely, and dedication to advancing our technologies and serving our customers set Babcock & Wilcox apart and have established our company as a recognized leader in the industries we serve. I also want to thank our customers and suppliers for their continued support. With this strong foundation, we're excited about where we're headed and confident in our ability to leverage our leading power and environmental solutions to capitalize on the many opportunities ahead. With that, I'll now turn the call back over to Ellen, who will assist on a few questions. Ellen?
Thank you. We now have time to take a few questions. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question for optimum sound quality, and if muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Our first question comes from the line of Robert Brown with Lake Street Capital Markets. Your line is open. Please go ahead.
Good afternoon, congratulations on all the progress.
Thanks, Rob.
First question's on the expanding pipeline. I think it went up by a $2 billion this quarter since last quarter. What's sort of the environment for the pipeline you're seeing? What are some of the opportunities you're taking a look at? I know the data center's driving a lot of it, but could you give us just some more color on the pipeline growth?
Sure, yeah. I mean, obviously the data center aspect of our business is driving quite a bit there, but there are others. There, you know, we continue, and I'll start with maybe one part here and work back. We still continue to see a lot of opportunities in growing in either coal to natural gas conversion opportunities, or in some cases, some large coal generation plant upgrades, environmental upgrades to help and assist on those particular areas. We're seeing a lot of, you know, larger opportunities across the breadth of our portfolio of technologies, both on the core side and environmental side as well.
Specifically in the, in the data center opportunities, we are seeing, you know, new opportunities emerge both from utilities as well as hyperscalers, that we're in discussions with, that are, you know, in some cases they're looking to power specific data center opportunities. In some cases, they're looking to power a specific manufacturing or large manufacturing associated with data center opportunities. You know, there's combinations there, on the specific end case or end user, where that power would be applied. We're looking and talking to them around utilizing and leveraging, you know, B&W's boiler technology.
One of the key areas that we're focused on is supporting our customers on the ability to leverage our steam boilers with steam turbine combination, but perhaps combine that with a combustion turbine down the road. Where obviously you can gain some efficiencies through that combination of adding the combustion turbine with the steam boiler and the steam turbine generation set on that. What we believe we also gain is you can actually increase the amount of power output provided on the same size or same square foot basis, if you will.
In other words, you know, if we're putting in a 50 MW or a 100 MW boiler, by adding the combustion turbine and combining the heat on from the turbine into the steam boiler itself, we can actually almost double the size of the output from that particular site. With very little real estate, we can actually increase the amount of wattage that can come from that particular location. There's interest in a few of our customers as it relates to those kind of long-term technology aspects. You know, clearly, a few customers also want to make sure that they're in position to capture the CO2 at some future point in time, either for enhanced ore recovery or methane recovery or, you know, other uses or even sequestration.
You know, as we talk about the data center concept, there's some uniqueness around our ability to get the steam boiler and turbine out, you know, quicker than a combustion set, but does give them the ability to combine the combustion turbine at a later date in order to enhance that particular site or increase the overall productivity or output from an electrical generation standpoint. That's, you know, an attractive or a value proposition for our customers. We're looking at all of that.
Okay, great.
Yeah.
The Base Electron project can get $31 million in the quarter. How do you see that kind of laying out? Is it really ramp significantly in starting next year, or do you get a decent amount of revenue yet this year?
We'll get more revenue this year. I mean, clearly there's a bigger ramp. Obviously, you know, as you mentioned, it's when we get into the full, the full construction aspect on site. You know, not only civil and the early groundworks and all of that, but more when we're putting up steel, starting to do the steel production of the site itself. That's when there is a very significant ramp on revenue. We'll see that, you know, as we go into next year, there.
They'll continue to produce revenue this year for Base Electron as we complete, you know, different milestones on the manufacturing side of those, of the project itself, complete some of the onsite preparation work we need to do for, you know, engineering and other aspects for the civil construction capabilities and get the site prepped for the actual steel manufacturing itself. There are different milestones to involved in those contracts. We'll still see further revenue this year, but yeah, the huge amounts will start to impact next year.
Okay, thank you. I'll turn it over.
Your next question comes from the line of Jeff Grampp with Northland Capital Markets. Your line is open. Please go ahead.
Evening, guys. Appreciate the time.
Hey, Jeff.
for some of these projects, as I recall on the last earnings call a couple months back, it sounded like there were a couple of projects that were in, I guess, fairly serious discussions. I know you're relatively limited on what you can say on the call, but just kind of wondering on those specific projects or any others that have kind of come up on the priority list over the last couple of months, you know, what kind of the latest and greatest is in terms of the state of those conversations and the outlook there. Thanks.
Yeah, no, we still progress on those discussions with 2 or 3 different customers out there to determine, you know, obviously, the best way to move forward with them on that. I think, if we, you know, get 1 or so across the goal line, it'll clearly be a project where we'll sign a, you know, some sort of MOU or LNTP or something obviously to start, and then allow us to get everything set up to move into the full notice to proceed, you know, at a later date. Similar to what we do just about on every big project that B&W's ever been involved in, on that front. Those discussions still continue and, you know, working through a number of different scenarios.
You know, as typical, on these kind of projects, there's a lot of different variables that the end user and customers are trying to accomplish. You know, either be from a technology standpoint, end user standpoint, permitting standpoint, location, geography, you know, so on and so forth. A lot of things kind of ebb and flow as we enter into these discussions, but they continue and, you know, we're hopeful that we can move one across the goal line.
Got it. Appreciate that. That's my follow-up. You know, to the extent you get another, you know, one or two projects under the belt here, that you ultimately can book, are there any, you know, investments, or things along that kind of notion that B&W may look to make to ensure it can deliver on perhaps an accelerated slate of projects? Or do you feel that the companies and the supply chains are appropriately situated to deliver on multiple projects running concurrently?
Yeah, no, we feel good about the current supply chain that we've established. Obviously, around the Base Electron project, we used that in order to establish a broader aspect around potential on other data center projects so that we could, you know, begin to secure a little bit of capacity there around that. I think, you know, each one of these will be a little bit nuanced. The size of the boilers or the size of the turbines will vary. You know, they'll be, as we've always talked about, we wanna, as much as possible, use and leverage existing technology that B&W has put in the marketplace, same on the turbine side of the equation.
You know, there will be because there's a need to have different size boilers used, right? You know, for Base Electron, we're using the 300 MW boilers. You know, in other cases, we're looking at, you know, smaller. In some cases, we're actually looking at even bigger. The positive news on that is that we have different manufacturers lined up to be able to accept, you know, depending on the size of the boiler out there. Where we've been proactive on is to make sure as we move forward into these opportunities, that the manufacturers are kind of, if you will, sitting side by side with us as it relates to these so that we can ensure that we've got the capacity to make those happen out there.
We feel good about where we are right now. You know, in the, in the future, obviously having, you know, security on the steam turbine aspect of it for us and, some of the pressure parts is gonna be crucial as we get, you know, past the, 1 or 2 of these additional projects, as we move along. We'll have to make sure that, you know, we keep in mind how we can secure that capacity to continue to move forward. You know, at the moment, we feel pretty good about our position right now.
Got it. I appreciate all those details. I'll turn it back. Thank you.
Thank you.
Your next question comes from Aaron Spychalla with Craig-Hallum. Your line is open. Please go ahead.
Yeah, good afternoon, Kenny and Cameron. Thanks for taking the questions. Maybe first for me on just guidance, you know, with the better start to the year and it sounds like, you know, confidence in activity levels. Can you just talk to, you know, visibility into guidance and maybe cadence throughout the year?
Yeah, no, good question. Obviously, we kept the guidance where we are right now, 100% just as we try to figure out how much we can shift in either into construction or pull forward some of the manufacturing and other aspects around these projects that we're involved in. You know, once we have a better handle on that here in the coming months, then, you know, we'll relook at the guidance we put out in the marketplace and we'll see how that goes. You know, I think the positive news is there's, you know, there's definitely potential for upside related to our guidance that exists today. We're gonna, you know, keep an eye on how things progress this year and see where it goes.
You know, obviously, if it doesn't hit this year, then it just goes into next year. You know, either way, it's a good position for BW to be in. You know, we'll keep an eye on that and circle back around on that at a later date.
Right. Understood. You know, within the guide for this year, is there a way to think about, you know, kind of that base, you know, parts and services business? What kind of contribution looks like there? Just as we think about kind of growth in the coming years, you obviously have, you know, the big projects and some of these coal to gas conversions, but just what's kind of that base run rate? It seems like that business is still very much healthy.
Yeah, no, it's, I mean, obviously our parts and services we mentioned had a significantly strong first quarter, you know, one of its best from a first quarter standpoint in recent history. Usually, you know, as you know, it's Q1 is a little low for us from a parts and services Q2, you know, maybe about the same, slightly better. Q3, Q4 is where we really pick up on that due to the outages and other aspects. You know, the demand we're seeing still is still strong out there for that business. We don't, you know, we don't see that changing as it goes into the rest of the year.
You know, we have pretty good visibility into the outages that are targeted to come later this year, to do, you know, maybe a significant aspect, not necessarily a gas or coal to gas conversion, but, you know, a broader upgrade or something, maybe environmental aspects as well too, on these coal plants. I think the, you know, the uniqueness is that, on the coal plants that they're being used obviously more and more and more, and they have capacity to be used even further than they are today. You know, as a result of that, you're seeing more investment put into these coal plants than we've seen in the past because they are running a lot longer and the need for them to run now is also increasing.
A lot of utilities or a lot of our customers are investing more into these plants to ensure the longevity for the, you know, obviously baseload generation. It's a good place for us to be in right now and excited about that. You know, we're taking it a quarter at a time, but, you know, it's right now we see a very strong outlook on the parts and services and anticipate that continuing right now for the foreseeable future. I don't, you know, it's the concept of the utilization on this, and that's the good news about it. These aren't just, you know, one-off kind of parts aspects. This is based on, you know, continuation of these plants running. We don't see that slowing down anytime soon.
Right. Okay. Thank you for the color on that. Just maybe, you know, almost housekeeping on the pipeline expansion to $14 billion legacy. You had kind of talked about a data center power gen pipeline of, you know, $3 billion-$5 billion plus I think. Is most of that increase, you know, just driven, you know, the $2 billion kind of driven by an increase in that pipeline or anything else to highlight?
Yeah. I mean, the data centers obviously have a large impact just because of the size, you know, consideration of those. There are a few that we're talking to that are in the, you know, 500 MW range, you know, to start with. There's a couple that are in the 300 MW range. You know, there are some that are in the, you know, 1 to 2 GW range. There is, you know, a big demand for that as the data centers continue to grow. We, you know, obviously we're not gonna book all of that business. The opportunities are wide across, you know, that size range.
You know, when you're talking about a 1 gigawatt plant or higher, you know, that's a significant project for us. Obviously it has, you know, solid revenue ramifications if we get that booked and across the goal line. You know, overall the pipeline out there is reflective of that and we, you know, it's been able to allow us to grow it quite a bit. The opportunities are, you know, still continue to evolve and come. You know, keep in mind the pipeline is projects where we think we'll close, not necessarily 100% with us, but we think we'll close within the next 3 years. There's obviously opportunities that are outside that 3-year window, you know, that would increase the size of that.
We don't talk about the opportunities. Just to give you some idea, you know, there's a lot of conversations on things that could be 4 years out that don't make it to the pipeline for that very definition reason.
Right. Right. That makes sense. Appreciate the color. I'll turn it over.
We have reached the end of the Q&A session. I will now turn the call back to Sharyn Brooks for closing remarks.
Thank you for joining us. That concludes our conference call. A replay will be available for a limited time on our website later today.
You may now disconnect.