Babcock & Wilcox Enterprises Inc Stock

Good afternoon. Thank you for attending the Babcock & Wilcox Enterprises Second Quarter 2026 Conference Call. [Operator Instructions] 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, Crystaline, and thanks to everyone for joining us on Babcock & Wilcox Enterprises Second Quarter 2026 Earnings Conference Call. I'm Sharyn Brooks, Director of Communications. Joining the call today are Kenny Young, B&W's Chairman and Chief Executive Officer, and Cameron Frymyer, Chief Financial Officer, to discuss our second 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 -- 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 a discussion of adjusted EBITDA and adjusted net income, should not be considered superior to or a substitute for the comparable GAAP measures. A reconciliation of historical non-GAAP measures can be found in our second 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 second quarter 2026 earnings release published on August 10, 2026, for further information regarding our bookings and backlog.

I will now turn the call over to Kenny.

Thanks, Sharyn. Well, good afternoon, everyone, and thanks for joining us on our second quarter 2026 earnings call. We are pleased to report another strong quarter, highlighted by robust financial results and active project development and continued operational momentum in our core business and further strategic debt reduction and stock repurchase. During the second quarter, Babcock & Wilcox continued to benefit from the growing need for reliable electrical generation from all sources of power consumption, including utilities, industrial and data center customers. These tailwinds drove strong operating results during the quarter and led us to raise our full year 2026 adjusted EBITDA target range from $80 million to $105 million.

As excited as we are about the increasing opportunities in new utility, industrial and AI and data center power generation project opportunities, we're equally excited about the strong results in our core projects as well as our Parts and Services businesses. These businesses have and continue to be strong cash generators for the company and continue to deliver significant growth each quarter due to the increased demand from coal and natural gas utilization, especially in the United States. Our quarterly financial results were highlighted by revenue, net income and adjusted EBITDA, all of which exceeded both company and consensus expectations. In the second quarter of 2026, our pipeline, bookings and backlog saw a significant development as well. Our total pipeline is now over $14 billion, including 4 to 6 gigawatts worth of power generation opportunities. Our bookings and backlog surged year-over-year, fueled by our core business growth and continued development of our Base Electron project in North Dakota. In the first half of 2026, we had bookings of $2.7 billion, which was an increase of more than 1,058% compared to the first half of 2025.

Additionally, our backlog was $2.6 billion in the second quarter of 2026, which was a 533% increase compared to the second quarter of 2025. Strong global demand for B&W's technologies, together with increasing investment in power generation continues to reinforce our positive outlook. We are focused on executing our strategic priorities, delivering on our current pipeline and maintaining the operational and financial flexibility needed to capitalize on future growth opportunities. Turning to our core business. Our Parts and Services continue to excel with demand for reliable baseload power growing across North America and global markets as well. This accelerating demand is encouraging utilities to invest in the refurbishment, recommissioning and continued operation of existing coal-fired generation assets to support grid reliability and meet future load growth.

This development 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 initial data center project with Base Electron is progressing ahead of expectations and on budget. Manufacturing of the boilers, steam turbines and other long lead time components continues to advance quickly and efficiently, helping to deliver reliable, high-capacity energy generation on the fast track time line required by AI data center customers. Base Electron has submitted its conditional use permit application, and we are planning for most of the on-site construction, including civil and mechanical to start in the first part of 2027 and turbines and boiler components delivered after construction begins.

The growth of AI-driven data centers is creating significant opportunities for BW with more than 4 to 6 gigawatts in new opportunities added from hyperscalers, developers and utility customers in our pipeline. We remain in active discussions with multiple AI data center customers utilizing coal and natural gas, and we expect a second data center project to move in full notice to proceed this year. In anticipation of this next data center project, B&W has secured the manufacturing reservation rights for an additional 1 gigawatt of steam turbines from Siemens Energy. A total of 20 50-megawatt steam turbines will be produced with the first generator sets being delivered within 12 to 14 months thereafter and additional deliveries to follow on a regular basis. This will help accelerate deployments for future B&W data center projects.

As B&W continues to expand, we are increasing our workforce to support the growth in our hiring in our engineering, project and business development organizations while increasing the availability of qualified skilled welders and electricians. As the global power demand continues its climb, availability of highly skilled labor, especially in the United States, is in short supply. Specifically, this negatively impacted efficiencies and resulted in higher direct costs on a specific construction project for B&W during the second quarter. We took immediate action in working with the unions to immediately increase qualified labor availability through incentives, rehires and delayed retirements to ensure qualified skilled labor is available going forward. Despite these U.S. industry-wide issues, we successfully navigated these labor impacts while still delivering robust top line results and strong EBITDA growth as well.

We don't expect labor shortages to be persistent issues as our near-term focus within our construction business has shifted towards variable priced construction projects, and we are increasing our recruiting and training efforts across many disciplines as well. Our BrightLoop initiatives continue to move forward as we advance the commercialization of our technology to enable cost-effective energy production. The commercial scale demonstration of BrightLoop at our Massillon, Ohio, project site remains a strategic priority. We are continuing fabrication of major components for the facility while we prepare the site for major construction activities to begin yet this year.

We have included a few photos of the various BrightLoop reactors in the fabrication process and our company overview presentation on our website. The operation of Massillon in late 2027 will position BrightLoop as a commercially available option for energy production as the demand for new generation assets continues to grow. We believe these efforts will strengthen B&W's leadership in low-carbon energy solutions and support our long-term growth.

I'll now turn the call over to Cameron to discuss the financial details of the second quarter for 2026. Cameron?

Thanks, Kenny. I am pleased to review our second quarter 2026 financial results, further details of which can be found in the 10-Q that was filed with the SEC this afternoon. Our second quarter 2026 consolidated revenues were $319.7 million, which is a 130% increase compared to the second quarter of 2025. Net income was $14.3 million for the second quarter, a $72.8 million increase compared to the second quarter of 2025. Finally, adjusted EBITDA was $21.8 million for the second quarter, a $7.9 million increase compared to the second quarter of 2025. These top line metrics capture the recent growth we've seen across our businesses and illustrate B&W's positive trajectory moving forward.

In the first half of 2026, revenues were $534.1 million, which is a significant increase compared to the revenue of $287.5 million in the first half of 2025. This is primarily driven by an increase in large project volume, including $131.7 million from Base Electron and the growing need for electricity from fossil fuels driven by demand from AI, data centers and expanding economies. Our core Parts and Services continue to perform well during the first half of the year. Net loss in the first half of 2026 was $62.7 million compared to a net loss of $80.5 million in the first half of 2025. Net loss in the first half of 2026 is attributed to $77.4 million of noncash warrants and other stock-related costs that we recorded this year due to the increase in our stock performance.

Excluding the impact of these specific warrants and other stock-related costs, B&W reported adjusted net income of $14.7 million in the first half of 2026. Adjusted EBITDA was $37.8 million in the first half of 2026 compared to $17.9 million in the first half of 2025. I'll now turn to the balance sheet, cash flow and liquidity. Total debt at June 30, 2026, was $276.8 million, which includes unamortized fees and unamortized gains from our bond swap in 2025. The company had a cash, cash equivalents and restricted cash balance of $382.8 million. In the second quarter of 2026, we announced the repurchase of the remaining $61.8 million in outstanding December 2026 bonds.

In addition, B&W's Board of Directors in July of 2026 authorized a share repurchase program for up to $50 million. The combination of our bond payments and the launch of the share repurchase program illustrates B&W's disciplined approach to debt repayment while reflecting the confidence in our balance sheet and strategic approach to building shareholder value.

With that, I'll now turn the call back over to Kenny.

Thanks, Cameron. Well, in closing, we are encouraged by the progress that we have seen across the first half of 2026, which along with our visibility for continued strong demand in the second half helped drive our improved 2026 full year adjusted EBITDA target range. Our core business continues to see sustained opportunities fueled by growing demand for reliable baseload power and a continued focus on energy security, and we believe B&W is uniquely positioned to capitalize on these trends. We continue to move forward with Base Electron project and see additional data center opportunities emerging, and our pipeline now exceeds well over $14 billion in project opportunities, and our bookings and backlog continue to convert at a strong pace.

We are encouraged by momentum we are seeing across our core markets and the opportunities to not only support the growing need for reliable baseload generation, but also to play a key role in advancing energy security and supporting the global energy transition. I will close by recognizing our talented and dedicated employees worldwide, whose commitment and expertise continue to drive B&W's success. We are grateful for their ongoing contributions as well as their continued support of our customers, suppliers and partners around the world. We are optimistic about the opportunities ahead and look forward to further demonstrating B&W's role as a leader and innovator in delivering advanced power generation and environmental solutions that support reliable power and strengthen energy security and shape the future of the global energy landscape.

With that, I'll turn it back over to Crystaline, and we have time for just 1 or 2 questions. So Crystaline, I'll turn it over to you.

[Operator Instructions] Your first question comes from the line of Rob Brown with Lake Street Capital Markets.

Congratulations on all the progress. First question on the Base Electron project. You recognized a fair amount of revenue in the quarter. Could you give us a, kind of, a layout of how that project is developing and flowing through the income statement and really how the project, kind of, steps forward over the next few quarters?

Yes. So we were able to recognize a little bit more revenue in the first part than we anticipated, obviously, from the production aspect and the manufacturing aspect of various milestones that have been reached, which is exciting for us because we're ahead of expectations right now on that project and on budget on that standpoint. I think where the real bulk of the revenues pick up is as we move into the construction phase and we begin shipping materials on site, which will have significant milestones. Obviously, that will begin -- that will start early next year on the particular site location.

And as mentioned, Base has filed their initial permit application for the site, and they're working through all of those details, and we're supporting them heavily on that, and we're excited about getting to the construction phase, which again will start next year. So we'll talk -- we can actually -- we'll keep an eye out on the revenue aspect. And if we think we can pull in more revenue and EBIT, obviously, we'll take a look at that in the coming quarters and make any adjustments accordingly on that standpoint.

But -- and that's one of the reasons amongst others that we decided to increase the EBITDA range as well, too. So we'll see how the milestones shake out, but I think we'll see significantly more revenue going into early part of next year.

Okay. Great. And then on the pipeline, I think you talked about 4 to 6 gigawatts of potential pipeline there. Could you, kind of, elaborate on how you see those projects developing and maybe how they compare to the Base Electron, kind of, project in terms of the numbers of projects that you're going after?

Yes. No, happy to. So we're involved in a number of them now in discussions and obviously, negotiations on a few. I think these will evolve as we've stated publicly before, these will evolve with some sort of an initial LNTP of various sizes upfront, and then we'll move into full NTP or full notice to proceed on those projects. We're obviously confident and excited about 1 or 2 that are developing that we went ahead and placed reservation rights for the Siemens turbines associated with that.

In this particular case, instead of the larger boilers, we're using 50-megawatt boilers and steam turbines in an enhanced combined-cycle fashion where we can actually install the boiler and the turbine ahead of the combustion turbine, and we're able to add a combustion turbine at a later date. But the customer can realize the full power of the 50-megawatt units that will provide initially 1 gigawatt worth of power, 50 x 20. When the combustion turbines is available, it will basically on the same plot of land, double the output from 1 gigawatt to 2 gigawatts.

So it's a real nice advantage for 1 or 2 of our customers, and we're in discussions -- continuing discussions with them. We're also -- and I think this is unique in discussions around potential other large project opportunities. Some of those are coal related, which I realize many people will have a difficult time believing. But even outside the TerraSpark project that we announced and we're working on the FEED study associated with that project, we're in discussions on other potential coal-related projects, obviously backed by the current administration, but to be used either in a grid connection associated with the data center or in direct connect to a data center at a particular site.

And these are larger projects as well, too. So there are several that we're involved in outside of the coal opportunities, but I want to reference that because we think those are unique, and it's also uniquely positioned as B&W is probably one of the only few companies that actually support those projects today.

Okay. Great. And then I guess last question is on, sort of, the customer response to -- I think you have a quicker time to market with your product and an overall, kind of, comparable cost structure for your system versus others. But what's, sort of, the need in the marketplace for time to market? And how is that resonating with the customer base?

Well, customers always want to go faster and faster for sure, right? We understand that pressure, and we're working to respond to that. That's one of the reasons we're moving quicker on the Siemens turbines to be ready in a 12- to 14-month period to get initial shipments on that to match with the boiler opportunity out there overall. But from a capital -- our focus has always been on the total cost of levelized or the levelized cost of electricity, so looking at total cost of ownership. But the levelized cost of electricity, when you look at that category or if you want to look at heat rate, when you leverage the enhanced combined cycle plant structure that we're doing, where we're taking the boiler and the turbine and matching that up with a combustion turbine at a later date, the combination of all 3 of those puts us on a heat rate that's not much worse, if you will, than a combined cycle plant.

So when you look at the overall efficiency aspect of those, it's -- we're pretty in line or pretty close. But we're providing power 3 to 5 years faster on those sites than a combustion turbine alone. I think the other key factor is -- and we don't talk about this enough, but if it's just a standard combustion turbine with a HRSG and a steam turbine under a combined cycle concept, the reliability of that is a little bit less. One, it's well known combustion turbines are not quite as reliable as steam. The second aspect of it is if the combustion turbine goes out of service, that entire amount of electricity is gone. When you have -- in our case, where we're taking a standard steam boiler converting that into a combination of a HRSG and boiler, where it can accept the waste heat from a combustion turbine in the future, then we're able to generate power both from the combustion turbine as well as from the boiler/steam turbine.

So if one or the other goes down, you still have one of the units operating. So combined, they'll be producing, let's say, in this case, 100 megawatts. So a 50-megawatt combustion turbine and a 50-megawatt steam and boiler/HRSG would be creating 100 megawatts. When one goes out, you still have 50 operating. In a normal combined cycle world, when that combustion turbine goes down for maintenance, you've lost the entire amount of electricity being produced. So you gain much more reliability. You gain 3 to 5 years faster to market on a speed standpoint from a power standpoint. And like I said, the efficiency and heat rate from a levelized cost of electricity is pretty close.

So a lot of advantages there on that. Having said that, our customers continue to put pressure on us to go faster and faster. And we continually analyze ways and technologies and options to make that happen, and we'll continue to do so. But we're excited about where we are. And obviously, getting a few of these projects across the goal line is important to us, and we continue to work on those.

Your next question comes from the line of Aaron Spychalla with Craig-Hallum Capital Group.

Maybe first for us, just on supply chain. Can you just, kind of, speak to confidence in your ability to meet the growth that you're seeing from this first project and, kind of, additional projects? You talked a little bit about labor and obviously, kind of, ordering some of these turbines. Can you just, kind of, talk about any investments needed there and just confidence in that growth?

Yes. So we do continue to work. As we mentioned previously, when we look at the various opportunities, we have different manufacturing -- let me just talk about the boiler for a second. We have different manufacturers and manufacturing processes that we rely on, both some of that's internal to ourselves. Some of that is third-party related as well, where we can shift different boiler sizes into different manufacturing facilities. So it gives us the ability to take on more and more project work. B&W has been doing that for quite some time, and that's not any different as it relates to these opportunities. So we're -- we feel like that we have that, kind of, flexibility and capacity on these, and we'll continue working with those manufacturers to increase the output and also the -- not only the volume, but the speed, too, as well because obviously, speed to getting this on site is really, really important.

On Base Electron's case, as you mentioned, we're ahead of where we planned and all of our manufacturing on the large long-lead time items are producing on schedule. And so that project is on track overall with them. As we mentioned, the biggest component is making sure that we have access to -- besides the boiler, the steam turbine, especially for these initial projects where the combustion turbine would be added at a later date. And we obviously have a very close relationship with Siemens and continue to do so there. And we wanted to move ahead and invest in these next gigawatt worth of steam turbines. And so that reservation has been secured on that and ready to ship in the next 12 to 14 months on those turbine units. And it's -- the relationship there is good not only from a supply chain standpoint, but from a payment term standpoint on the financial side as well.

So it's very positive in that relationship. And we continue to work with them on the evolution of the turbine and other aspects where we might improve overall efficiencies from an output standpoint, but also efficiencies from a time-to-market standpoint. So those are 2 characteristics that we're focused on. That's on those 2 major areas. When you look at the other aspect you mentioned is on labor, and that's an area that we continually keep a very close eye on the availability of, I would say, highly skilled labor. It's one to have a workforce. Two, that workforce has to be highly skilled, especially in these high-pressure welds in those particular areas.

And we're working very close with the various unions on that front as well as our customers on that front to make sure that we're aligned and have the availability that we need when we need it. In particular, on Base as we move into construction next year, we have been working very close with the unions to be ready to have welders available as we start those projects and a ramp rate, if you will, to increase the supply of quality welders and moving them through our various safety and other training programs to ensure that they're ready to go to work on those particular projects.

So we'll continue our focus there. We'll continue to invest in that recruiting and training efforts with -- along with the various unions. And I will say that the unions have been extremely cooperative and supportive of this as well, too. They see that importance, and they know the demand is out there, right? So it's a good time in the industry, but any time you have this massive amount of growth in the marketplace, especially here in the United States, it puts pressure to make sure that we're planning on those resources equally as well as the manufacturing side as well, too. So we're staying on top of it. And I feel like we've accomplished a lot over the last quarter and have put us in a good direction going into next year.

Got it. And then you, kind of, referenced a FEED study. You had a coal plant announcement here this past quarter. Can you just give a little bit more detail on what that pipeline -- what that opportunity, what the, kind of, pipeline looks like? Any thoughts on, kind of, timing and next steps there?

Yes. We're working close on the FEED. Obviously, the FEED is going through the whole front-end engineering design aspect of the plant flows, project -- power flows, everything else associated with that. Normal course on that particular piece. There's a lot of involvement with the DOE on that particular project, and we're working very close with them as well, too. So it's going through its process and TerraSpark is working through its approach on the process and looking at different options on how to structure the boiler and other pieces to support their long term goals on that piece, but we're excited to be a part of that.

I can tell you from an employee perspective, we've got a lot of employees that never thought they would see the light of day of building a coal plant here in the U.S. And so a lot of our engineers that have been around these critical -- subcritical or supercritical plants are excited to be a part of it, and we are as well, too. So we're supporting their efforts. And obviously, TerraSpark's got lead on this, but a lot of discussions with them and working with them on getting this done. So it's too soon to anticipate quite yet like how we forecast out revenues associated with that project and when past the FEED study, but it's actively involved and engaged, and then we'll just have to see how it goes from here.

Okay. And then maybe one last one for me. Just on ClimateBright, you, kind of, mentioned, I think, 2027. Can you just, kind of, talk about next steps there and maybe what that pipeline looks like as we think about growth and getting that project up and running?

Yes. So well, first on the Massillon project, I haven't had -- I assume our presentation is up by now. But on the [indiscernible] project, you'll see some pictures of the fabrication of the fuel reactors on BrightLoop that will be going in that location on the commercial aspect of that. There's -- we've got a lot of interest from hyperscalers and others, even oil companies as it relates to BrightLoop and that commercial demonstration on that particular project. So we've obviously accomplished, I think, for the most part, all of the funding necessary to get that in the ground. And so we'll begin construction on site here later in the fall, but that will begin. And obviously, our anticipation still is to have the fuel reactor and the hydrogen reactor in initial phase operational sometime by latter part of 2027 on that location.

BrightLoop is, as we've talked about, can do hydrogen, but it can also just do steam. And so we've got a lot of interest right now and the concept of that commercial demonstration showing that the fuel reactor at that scale up is important to move it into a higher scale. And when we look at both the West Virginia project as well as the Wyoming project, a lot of interest right now, given the current environment is to produce steam from coal with the CO2 being isolated and used for enhanced methane recovery or enhanced oil recovery at those 2 locations. So getting this commercially in the ground is important steps as it relates to those 2 projects.

And obviously, we're in close discussions with both those customers as it relates to the Massillon project itself. So -- the concept of that, I think, still -- our opinion, it still has a high-growth capabilities. And if we had -- honestly, I'll just make the statement, if we had Massillon in the ground 2, 3 years ago, 4 years ago on it, which was an impractical aspect. But if we had that commercial project done and moving on to larger projects, I think there's a lot of hyperscalers today that would be in discussions about utilizing BrightLoop for power generation because of its CO2 treatment capabilities, whether it's captured CO2 and sequestered or whether it's used for other enhanced purposes.

But in the long run, the hyperscalers still want a pathway and check the box that there could be at some future point in time, some sort of carbon capture associated with these data centers and AI infrastructure. So we're obviously still in a good position. We don't see an end to the power generation demands coming from AI and data centers despite what the public markets have been stating. The demand continues not only here but worldwide. And I think we're hopefully poised with the company to leverage that once we get this up and going by the end of '27.

So we'll be looking at bookings in '28, '29, '30, as we previously discussed about BrightLoop as well as other ClimateBright applications such as our oxycombustion or post-combustion technologies as well.

We 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. This concludes our conference call. A replay will be available for a limited time on our website later today.

This concludes today's call. Thank you for attending. You may now disconnect.

Good afternoon. Thank you for attending the Babcock & Wilcox Enterprises First Quarter 2026 Conference Call. [Operator Instructions]. 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, Allen, and 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 Kenny 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 statements.

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 Kenny.

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 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 noncash 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 capture 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 continue 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 and 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 construction, including civil and mechanical is scheduled for 2027 and 2028, and 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. And 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 1x our trailing 12-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 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 2026 consolidated revenues were $214.4 million, which is a significant increase compared to 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 noncash 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 totaled $237.2 million, of which $69.1 million is current, which, as Kenny stated earlier, we will be paid off within the year. The company had cash, cash equivalents and restricted cash balance of $194.8 million, giving us net debt as of March 31, 2026, of $42.4 million against our secured debt and senior notes.

With that, I will now turn the call back over to Kenny.

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. And 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 Allen, who will assist on a few questions. Allen?

[Operator Instructions] Our first question comes from the line of Rob Brown with Lake Street Capital Markets.

Congratulations on all the progress. First question is on the expanding pipeline, I think it went up by a couple of 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? And I know AI data center is driving a lot of it, but could you give us just some more color on the pipeline growth?

Sure. Yes. Obviously, the data center aspect of our business is driving quite a bit there. But there are others. We continue -- and I'll start with maybe one part here and work back. But we still continue to see a lot of opportunity 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. So we're seeing a lot of larger opportunities across the breadth of our portfolio of technologies, both on the core side and environmental side as well.

Specifically in the data center opportunities, we are seeing new opportunities emerge, both from utilities as well as hyperscalers that we're in discussions with that are -- in some cases, they're looking to power specific data center opportunities. In some cases, they're looking to power specific manufacturing or large manufacturing associated with data center opportunities. And so there's combinations there on the specific end case or end user where that power would be applied.

But we're looking and talking to them around utilizing and leveraging 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.

But 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. So in other words, if we're putting in a 50-megawatt or 100-megawatt 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. So with very little real estate, we can actually increase the amount of wattage that can come from that particular location.

So there's interest in a few of our customers as it relates to those kind of long-term technology aspects. And then clearly, a few customers also want to make sure that they're in a position to capture the CO2 at some future point in time, either for enhanced oil recovery or methane recovery or other uses or even sequestration.

But -- so as we talk about the data center concept, there's some uniqueness around our ability to get the steam boiler and turbine out quicker than a combustion set, but does give them an 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. And that's an attractive value proposition for our customers. So we're looking at all of that.

Okay. Great. Then on the Base Electron project, you had $31 million in the quarter. How do you see that kind of playing out? Is it really ramp significantly starting next year? Or do you get a decent amount of revenue this year?

We'll get more revenue this year. I mean, clearly, the bigger ramp, obviously, as I mentioned, is when we get into the full construction aspect on site. So 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. So we'll see that as we go into next year there.

But they'll continue to produce revenue this year for Base Electron as we complete different milestones on the manufacturing side of the project itself and complete some of the on-site preparation work we need to do for engineering and other aspects for the civil construction capabilities and get the site prepped for the actual steel manufacturing itself. So there are different milestones involved in those contracts. So we'll still see further revenue this year. But yes, the huge amounts will start to impact next year.

Your next question comes from the line of Jef Grampp with Northland Capital Markets.

Kenny, for some of these projects, as I recall on the last earnings call a couple of 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, what's kind of the latest and greatest is in terms of the state of those conversations and the outlook there?

Yes. No, we still progress on those discussions with 2 or 3 different customers out there to determine, obviously, the best way to move forward with them on that. I think if we get one or so across the goal line, it will clearly be a project where we'll sign 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 at a later date. So similar to what we do just about every big project that B&W has ever been involved in. So on that front.

But those discussions still continue and working through a number of different scenarios. As typical on these kind of projects, there's a lot of different variables that the end user and customers are trying to accomplish, either be from a technology standpoint, end user standpoint, permitting standpoint, location, geography, so on and so forth. So a lot of things kind of ebb and flow as we enter into these discussions, but they continue, and we're hopeful that we can move one across the goal line.

Got it. Appreciate that. As my follow-up, to the extent you get another 1 or 2 projects under the belt here that you ultimately can book. Are there any 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?

Yes. No, we feel good about the current supply chain that we've established. Obviously, around the Base Electron project, we use that in order to establish a broader aspect around potential on other data center projects so that we could begin to secure a little bit of capacity there around that.

I think each one of these will be a little bit nuanced. The size of the boilers and the size of the turbines will vary. They won't -- they'll be -- as we've always talked about, we want to 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. But there will be -- because there's a need to have different size of boilers used, right?

For Base Electron, we're using the 300-megawatt boilers. In other cases, we're looking at smaller, in some cases, we're actually looking at even bigger. So the positive news on that is that we have different manufacturers lined up to be able to accept depending on the size of the boiler out there. And so 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.

So we feel good about where we are right now. In the future, obviously, having security on the steam turbine aspect of it for us and some of the pressure parts is going to be crucial as we get past the 1 or 2 of these additional projects as we move along. And we'll have to make sure that we've got -- we keep in mind how we can secure that capacity to continue to move forward. But at the moment, we feel pretty good about our position right now.

Your next question comes from Aaron Spychalla with Craig-Hallum.

Maybe first for me on just guidance with the better start to the year, and it sounds like confidence in activity levels. Can you just talk to visibility in the guidance and maybe cadence throughout the year?

Yes. No, good question. Obviously, we kept the guidance where we are right now, 100% just as we try to figure out how much we could shift either into construction or pull forward some of the manufacturing and other aspects around these projects that we're involved in.

Once we have a better handle on that here in the coming months, then we'll relook at the guidance we put out in the marketplace, and we'll see how that goes. But I think the positive news is there's definitely potential for upside related to our guidance that exists today, and we're going to keep an eye on how things progress this year and see where it goes. Obviously, if it doesn't hit this year, then it just goes into next year. So either way, it's a good position for B&W to be in, but we'll keep an eye on that and circle back around on that at a later date.

Right. Understood. And then within the guide for this year, is there a way to think about kind of that base parts and services business, what kind of contribution looks like there? And just as we think about kind of growth in the coming years, you obviously have the big projects and some of these coal-to-gas conversions. But just what's kind of that base run rate, and it seems like that business is still very much healthy.

Yes. No, it's -- I mean, obviously, our parts and services, as we mentioned, had a significantly strong first quarter, one of its best in -- from a first quarter standpoint in recent history. Usually, as you know, Q1 is a little low for us from a parts and services, Q2, maybe about the same, slightly better. But Q3, Q4 is where we really pick up on that due to the outages and other aspects.

The demand we're seeing is still strong out there for that business. We don't see that changing as it goes into the rest of the year. We have pretty good visibility into the outages that are targeted to come later this year to do maybe a significant aspect, not necessarily a gas or coal-to-gas conversion, but a broader upgrade or something maybe environmental aspects as well, too, on these coal plants.

I think 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. 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. So a lot of the utilities or a lot of our customers are investing more into these plants to ensure the longevity for the, obviously, baseload generation.

So it's a good place for us to be in right now and excited about that. And we're taking it a quarter at a time, but 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 -- the concept of the utilization on this, and that's the good news about it. These aren't just one-off kind of parts aspects. This is based on a continuation of these plants running. We don't see that slowing down anytime soon.

Right. Okay. And then just maybe almost housekeeping. On the pipeline expansion to $14 billion, it's great to see. You had kind of talked about a data center power gen pipeline of $3 billion to $5 billion plus, I think. Is most of that increase just driven -- the $2 billion kind of driven by an increase in that pipeline or anything else to highlight?

Yes. That's -- I mean the data centers obviously have a large impact just because of the size consideration of those. There are a few that we're talking to that are in the 500 megawatts range. To start with, there's a couple that are in the 300-megawatt range, but there are some that are in the 1 to 2 gigawatt range.

So there is a big demand for that as the data centers continue to grow. And obviously, we're not going to book all of that business, but the opportunities are wide across that size range. So when you're talking about a 1 gigawatt plant or higher, that's a significant project for us. And so obviously has solid revenue ramifications if we get that booked across the goal line. So overall, the pipeline out there is reflective of that, and we -- it's been able to allow us to grow it quite a bit. But -- and the opportunities are still continue to evolve or come.

But 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 that would increase the size of that. But we don't talk about the opportunities. But just to give you some idea, 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.

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.

Good afternoon. Thank you for attending the Babcock & Wilcox Enterprises Fourth Quarter and Full Year 2025 Conference Call. [Operator Instructions]

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, Tamita, and thanks to everyone for joining us on Babcock & Wilcox Enterprises Fourth Quarter and Full Year 2025 Earnings Conference Call. I'm Sharyn Brooks, Director of Communications. Joining the call today are Kenny Young, B&W's Chairman and Chief Executive Officer; and Cameron Frymyer, Chief Financial Officer, to discuss our fourth quarter and full year 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 published on March 4, 2026, and in our annual report on Form 10-K that has been filed with the SEC today. Additionally, except as required by law, we undertake no obligation to update any forward-looking statements.

We also provide non-GAAP information regarding certain of our historical and targeted results to supplement the results provided in accordance with GAAP. This information 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 fourth quarter and full year 2025 earnings release published on March 4, 2026, 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.

I will now turn the call over to Kenny.

Thanks, Sharyn. Well, good afternoon, everyone, and thank you for joining us on our fourth quarter and full year 2025 earnings call. Over the past year, Babcock & Wilcox has seen significant growth due to higher demand in electrical generation. Our company has reached a new pinnacle, which combined with recent announcements, allows us to increase our 2026 adjusted EBITDA target range to between $80 million and $100 million. Our core business, excluding data centers, continued to grow as our parts and services saw elevated demand from the increased operation of baseload generation in North America and beyond.

As energy needs continue to expand from consumers, industries and data centers that utilize grid power, coal plants are being reconditioned and reengaged by utilities to help meet that accelerating demand. Existing coal plants in the U.S. have been operating at less than 50%, and these power plants have untapped capacity that is starting to be used to support the increased power demand. As natural gas prices climb, the cost of coal operations has become more attractive, which translates into greater use of Parts & Services as well as upgrades and enhancements, all of which increased demand for our core business.

Our Parts & Services revenues grew by over 17% in 2025, and we saw growth continuing in 2026 as well. As a reminder, the majority of our parts, services and small upgrade revenues are not in our backlog as the book-to-bill cycle is much quicker than longer-term projects. The increasing demand for power in North America serves as a catalyst for B&W's continued growth, positioning us to play a pivotal role in supporting AI data center expansion and increased baseload generation needs in the years ahead.

Our recent announcement of a full notice or full approval to proceed on our project with Base Electron is an exciting step forward into the AI data center space. Our agreement with Base Electron backed by Applied Digital is valued at $2.4 billion and is intended to deliver 1.2 gigawatts of electricity that will be directly connected to the grid in support of AI factory campuses. Combining steam turbines with our previously designed and engineered 300-megawatt boilers enables us to eliminate months of initial development work that is required with typical new boiler projects.

Overall, this can help accelerate a standard delivery schedule by up to a year. Site visits are now underway, and we've started the boiler manufacturing process. Siemens Energy has started the fabrication process of the turbines and work is scheduled to commence at the site later this year, with most of the construction, including civil and mechanical scheduled for 2027 and 2028. We are also working closely with the boiler maker union to ready the labor force needed at peak periods throughout this project. Currently, just over $430 million of this contract is fixed price, specifically the boilers and the steam turbines, while the remaining work is covered under a cost-plus approach.

Applied Digital is backstopping the contract with a guarantee of full and timely performance of all of Base Electron's obligations. Base Electron has also indicated its interest in purchasing another 1.2 gigawatts of power from B&W, possibly at a different location. The impact of this contract on B&W is truly profound, and we have now added $3 billion to $5 billion in additional AI data center opportunities to our portfolio. We believe our proven technologies are well positioned to deliver the reliable, high-capacity power generation that is required to meet the growing demands of power grid today.

Furthermore, we are in real-time discussions with additional data center customers around specific opportunities. A few of these are actively underway right now, and we hope to be able to issue further announcements and details in the coming weeks. These potential projects with other developers, hyperscalers and utilities, if booked, will also utilize B&W boiler designs in combination with steam turbines. As a result, and even after converting $2.4 billion of our pipeline to backlog, these new opportunities are now reflected in our current pipeline of over $12 billion.

Additionally, we are seeing increased utilization of coal-fired power generation along with upgrades and enhancements driven by initiatives from the U.S. Department of Energy and the National Energy Dominance Council, combined with rising demand for fossil fuel-based power generation and extended lead times for combustion turbines, these dynamics highlight our ability to deliver solutions more quickly by leveraging our proven steam generation technologies. We are now in early discussions regarding the potential of new power generation utilizing coal technologies and are excited to see this development moving forward.

For utilities, Coal is an offset to higher natural gas prices and either through upgrades or new build, we see the reliance on coal technologies continuing here in the U.S. with additional facilities being added in Asia as well. Our backlog continues to benefit from this increased demand for coal and power generation as well as the tailwinds from AI data center growth. In total, we saw our continuing operations backlog rise to $2.8 billion, which is a 470% increase compared to the end of 2024. Our pipeline of over $12 billion grew by roughly 20% in 2025, even with the conversion of this recent project to backlog, and we do see continued pathways for growth moving forward into 2026.

During the fourth quarter of 2025, we delivered strong operating results while displaying continued core business momentum. Revenue, operating income and adjusted EBITDA all significantly outperformed company and consensus expectations for the quarter. Adjusted EBITDA was 53% higher compared to the fourth quarter of 2024, and operating income was up 373% when compared to the same period of 2024. These results during the quarter reflect the strong demand for our diverse portfolio of technologies and demonstrate B&W's evolution and strategic advancements over the past year.

In recent months, we fully paid off the remaining outstanding bonds due in February 2026 and expect to fully pay off the remaining outstanding December 2026 bonds in a timely fashion. These bond payments pair with the continued paydown of our overall debt levels. Across 2025, we achieved a substantial reduction of our debt on our balance sheet, resulting in a net debt of $119.7 million at the end of 2025, which is a $217.3 million improvement compared to the net debt of $337 million at the end of 2024.

Our BrightLoop advancements continue to evolve behind the scenes, including our Masland and Wyoming projects. 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 as well as other beneficial uses. The commercial demonstration of BrightLoop at Masland remains an important milestone for B&W as we continue to position the company for additional growth opportunities in the future.

I'll now turn the call over to Cameron, who will discuss our full year 2025 results. Cameron?

Thanks, Kenny. I am pleased to review our full year 2025 financial results, further details of which can be found in the 10-K that was filed with the SEC this afternoon. Our 2025 consolidated revenues were $587.7 million, which is a modest increase compared to the revenue of $581 million in 2024. Our core Parts & Services continue to excel across 2025, increasing revenue 17%, outperforming expectations due to higher coal generation usage and growing baseload demand in North America. Continued growth in our Parts & Services is expected throughout 2026.

Our operating income in 2025 was $20.7 million, which was an improvement compared to an operating loss of $6.3 million in 2024. Loss from continuing operations in 2025 was $32.8 million compared to a loss of $104.3 million in 2024. And our loss per share from continuing operations was $0.45 in 2025 compared to a loss per share of $1.30 in 2024. Adjusted EBITDA from continuing operations was $43.7 million compared to $21.2 million in 2024. As Kenny stated earlier, we have announced our full year 2026 adjusted EBITDA target range is between $80 million to $100 million.

I'll now turn to our balance sheet, cash flow and liquidity. Total debt at December 31, 2025, was $321.1 million, which includes unamortized fees and unamortized gains from our bond swap earlier this year. Our current debt consists of $83.9 million of December 2026 bonds, which, as Kenny stated earlier, will be paid off within the year and $151 million of bonds due in 2030 or $129.5 million of bonds when unamortized fees and unamortized gains are excluded.

The company had cash and cash equivalents and restricted cash balance of $201.4 million, giving us a net debt as of December 31, 2025, of $119.7 million or $79.7 million when excluding unamortized gains, fees as well as leases. As Kenny previously mentioned, we delivered a significant year-over-year improvement in our net debt, reducing it by $217.3 million compared to December 31, 2024. Additionally, in December of 2025, B&W paid off outstanding bonds due in February 2026 and the remaining outstanding December 2026 bonds will be paid off this year.

With that, I will now turn the call back over to Kenny.

Thanks, Cameron. Well, we are excited about our growing opportunities to expand in the power generation for the rapidly evolving AI data center space, and we remain focused on executing against our strategic plan. We remain uniquely positioned to capitalize on the growing global demand for baseload electrical generation, and our pipeline remains robust, exceeding $12 billion in project opportunities with significant tailwinds bolstered by the growing impact of AI data centers. We anticipate prospects for the new bookings and further strong financial performance throughout 2026.

I would like to once again recognize the hard work and expertise of our employees around the world who help us meet our customers' needs today and further strengthen our ability to support the energy needs of the future. We would also like to recognize and thank our vendors and manufacturers around the world who are working to meet the requirements of our initial data center project and importantly, are working closely with us to ensure timely delivery on the next project once booked. These manufacturers are working to ensure we have the necessary resources and delivery schedules to meet our customer demands. We continue to be enthusiastic about the path forward and expect 2026 to be a strong operational year for B&W with resilient global demand for our technologies, driving sustained growth in the quarters ahead.

In closing, B&W is also celebrating its 160th year, and it's a good time to reflect on some of the milestones and firsts that have defined our company history from playing a leading role in the global industrial revolution of the 19th century to helping make universal electrification from coal and natural gas possible to developing some of the world's most efficient and effective environmental emissions control, renewable energy and hydrogen generation and carbon capture technologies. B&W has constantly been at the forefront of innovation, but it all began with creating steam for power and B&W boilers and steam generation technologies have contributed to more than 400 gigawatts of total electrical capacity worldwide. We're proud of our history, and we're excited about what lies ahead for our company.

And with that, I'll now turn the call back over to Tamita, who will help us with a few questions. Tamita?

[Operator Instructions] The first question comes from Aaron Spychalla with Craig-Hallum.

Maybe first for us, just on the Base Electron project moving to $2.4 billion. Can you just talk about the dynamics there versus the limited notice? And then just on the project, any other color on time line? You talked a little bit about some of the milestones, but maybe just a little bit more detail there and then timing of kind of working capital needs and cash flows on year-end?

Sure. Let me see if I can capture that. So to back up, as you indicated, obviously, we announced the limited notice proceed last November, I believe, for $1.4 billion on the project. We -- typical in large projects until we get to the final notice to proceed, there's always variability in the exact scope and final amounts of the project at that time. So that's why we'd like to take that approach. So as we were working through the final scope on the project, the final terms and conditions of the contract, as we mentioned the firm versus time or cost-plus scenarios on it, we were able then to complete the contract plus the final scope of those negotiations, which led us then to the $2.4 billion announcement for the gigawatts being provided. So it's kind of normal evolution from a limit to notice to proceed to final notice to proceed and there's some variability always in the dollar amounts depending on that final scope as well as contract terms and conditions in that regard. So I think that was one question.

The other on kind of the milestones and what's happening, as I mentioned in the remarks, we're beginning -- the site visits are underway on that particular piece. We have the manufacturing processes going at various locations around the world, both from a turbine standpoint and the processes for the boiler pressure parts construction at various locations around the world. And obviously, very confident in meeting the schedule and the time lines for delivery. So some of the variability right now is waiting to get some specific dates on when construction on site will begin. Obviously, we're working through those, there's details behind the scenes on that, but we're anticipating some work beginning this year at this point in time. And then obviously, a bulk of this will move into 2027 and 2028 once we are well into the construction phase of this standpoint.

So I think the exciting aspect is working, obviously, with our manufacturers as well as with Siemens on the turbines, along with the boiler makers in the union, obviously, getting the labor force ready, we do feel confident that we can meet those time frames. And the fact that we're using previously engineered boilers eliminates a significant amount of time frames in this project schedule. So it gives us confidence in being able to complete this on time.

Good. And then on the guidance increase, can you maybe just talk to visibility into that and maybe cadence throughout the year? And then any expected contribution on the power generation project?

Yes. So obviously, there's a little bit baked in from the contribution of the power project into that increase for sure on that. It's, again, variable until we know more specifically when we get cost to the site, and that's obviously where our revenue recognition is based on cost, as you know. So the key component there is that we're able to drive cost to the project on the site on that. So we wanted to increase, obviously, inclusive of that. And obviously, there's some elevated increases that we're seeing just in some of the general parts, services and upgrades and usage around some of the coal and natural gas projects that we're involved in as well, too. So the combinations of those gave us the confidence to increase that.

We also, I think, extended the range a little bit, $80 million to $100 million because of some of the variability when we specifically start some of the construction on site as it relates to the base electron contract.

Yes, Aaron, I think typically, you'll see kind of the growth in adjusted EBITDA revenue throughout the year.

Yes, the cyclical aspect was...

[indiscernible] it will step up each quarter.

Okay. Okay. And then maybe one last one, just on that coal-to-gas project. Can you maybe give an update there, how far you are into that project, time line to finish that up? And then just any other thoughts on the pipeline for those types of opportunities as well?

Yes. So as of right now, we're on schedule, Aaron. I think we'll finish up really bulk of the '27 or '26 going to '27. So no issues there.

And on the pipeline side, we've got other -- not that large, but there's other conversion projects that we're in discussions on as it relates to that. Again, interestingly enough because some of the developments that are coming out of Capitol Hill and some of the recent remarks by President Trump, there's some mandates and some of the utilities are looking at extending coal power generation further, some of that due to, as I mentioned in the remarks, on the higher price of natural gas, right? So they're extending out some of the coal plants to last longer. So some of the natural gas conversions or a few of them are shifting out in later years.

But in the meantime, some of those plants now are going through a little bit higher or increased upgrades or parts replacements to continue operating those in as efficiently as possible. So it both help us, obviously, on those, but we're seeing a little bit of that impact as well, too.

Next comes from Rob Brown with Lake Street Capital Markets.

Congratulations on all the progress. I just wanted to dig into the pipeline a little more. I think you said you had a potential second project from Base Electron and then several other AI data center projects. Could you just give us a sense of maybe the sizing of the pipeline type projects and maybe the kind of time line of those projects?

Yes. So we're -- as mentioned, obviously, Base Electron has expressed interest in an additional 1 gigawatt or 1.2 gigawatt worth of power on that. We are also in discussions, I would say, again, as I mentioned in the comments, real-time discussions with 1 or 2 other projects outside of Base Electron and Applied that are looking at the similar solution, the boiler size may vary. There's a project or 2 looking at smaller boilers, but more -- but it's still in the 1 gigawatt range. So most of the data center projects usually are -- when we have discussions, it's in the -- 1 or 2 could be in the 500-megawatt range. Most are in the 1 to 2 gigawatt range when we get in discussions about the Power Solutions.

Our specific scope on some of those will vary a little bit. In some cases, it will be a little more turnkey like we're doing at base electron. Others are -- we're in discussions on right now would be more for us to provide the boiler and the steam turbines. But under a different EPC structure. So there are different levels of scope that we're involved in. But from an overall size standpoint, most of those discussions are in a very similar size, both in the gigawatt aspect. Some are different scope on a total project basis. So they'll have different pricing elements. But you can kind of get a sense of the general project impact that would come from these additional projects if we can get them booked.

Okay. Great. And then in terms of capacity to do these, like there's, call it, total of 2 to 3 projects that are in the works. What's sort of the ability to do or the capacity to take that work on? Or does it need to spread out over time?

Yes. No, great question. So we are -- as I mentioned or tried to mention in the remarks, we are working closely with Siemens and other turbine companies, but working with them closely. We've got several meetings coming up over the next few weeks, but trying to establish increased capacity on the steam turbine side of this. So again, either through Siemens and that relationship or depending on the size with 1 or 2 other turbine companies around the world. The great aspect around using steam turbines versus combustion turbines is that there is -- especially when we get to smaller turbines, there is more manufacturers and a little bit better excess capacity that we can leverage within the manufacturing process on that side.

So we're -- when we negotiated the first set of turbines with Siemens, we were also working with them and continue to do so to identify places where we can leverage and get to increased capacity with them to move on to another 4 possible steam turbines with Siemens, also discussions with others out there to ensure that we have the capacity to meet those data center project needs. We've also taken that same approach on the boiler pressure pump manufacturing side, both with that steel aspects here in the U.S., fabrication here in the U.S., but also with our manufacturing partners and companies and our own manufacturing facilities that we have, but also our partner manufacturing facilities that we have in Central Asia and Southeast Asia to make sure that we have the right resources and everything lined up on those raw materials from various components on the steel pressure parts to be able to make the manufacturing schedules and have those shipped.

We're looking at one case where we're looking for the possibility to ship a modular boiler approach through, obviously, a water access shipping standpoint, but that can be delivered directly to site on one of the opportunities that we're in discussions on more of a -- instead of a stick build on site, it would be more of a modular aspect on site. And those -- by spreading those across different manufacturers because they're different sized boilers and different sized turbines, we can -- we have confidence in having the capacity and the manufacturing to meet these next 2 or 3 projects that we're in discussions on as well.

On top of that, a critical component is the labor force and the boiler makers who we have a really good relationship with has been instrumental in helping us prep and prepare for these particular project sites on the readiness of a labor force and availability as we look down the road to have these construction schedules outlined and obviously eventually move under contract. So we're looking at it both on that side.

And then, of course, in B&W internally as it relates to having the right team aspects ready to go to project manage these from the procurement phase all the way to the construction phase to the delivery phase to the on-site phase to the commissioning and obviously, the project completion phase as well. The good news about this, and I think that's where it helps show is that B&W is not actually engineering new boilers here. So the pressure usually on scope for us is if we have to actually extend beyond the engineering resources that we have, which we're slowly adding to that, but we don't have an immediate impact on those engineering resources because we're leveraging previously designed boilers. And that -- all of those things combined to give us the confidence in the capacity to deliver these.

The following comes from Jeff Grampp with Northland Capital.

Kenny, on the -- on your prepared remarks, it sounded like some of these conversations on some of these other projects are fairly mature. And I guess just wanted to verify if that's a fair read here. I don't know if it's appropriate to try to get you to quote how many months behind maybe relative to the base electron kind of progression. But it sounds like some of these conversations are pretty far down the path, but I want to make sure we kind of appropriately set our expectations regarding timing.

Yes. No, good question. Obviously, we don't want to get too out of front negotiate contracts in the public space. But we are in discussions. I think like most projects for us, right, there would be an evolution where we would -- if we do get it booked or announced, we would enter into some sort of an initial phase, whether that's a limit to notice proceed or some other form of agreement, right, that would give us the ability to map out all of the site elements at this specific location on this other opportunity, the delivery schedules, the layout aspects of it, and it allows them also then to use our technologies in various permits and other aspects around the project while we ready the full manufacturing process for those specific boilers and turbines on that front.

So we are in discussions there. I hate to put a time frame on those. Hopefully, we can get to at least an initial discussion or announcement in the next several weeks, but we'll just have to see how that goes. But we are in that level of discussion with 1 or 2 other opportunities at the moment.

That's great to hear. And for my follow-up, I'm just kind of curious, as you guys are kind of seeing things play out, how much of a catalysts have some of these announcements been for you guys with respect to the APLD project? Do you feel the market participants were generally already aware of what you guys bring to the table and so it didn't really bring any new people to the fold? Or does that announcement and some of the progress you guys have had provide some kind of, I don't know, validation that this is a real solution that people can look to, to address power capacity issues?

Yes. For sure, 1 or 2 of the projects that we're contemplating that potential -- immediate potential here, we're also underway in parallel with the discussions with Applied for certain. But I would say also as a result of the announcement of the Applied contract, the amount of inbound interest from both hyperscalers, utilities and other developers and other IPPs has been extremely, boy, lack of a better term, I mean, very significant, right? So -- and that's, I would say, around the world, not just here in North America, but in other locations around the world as well, too, on that.

So some of those are -- come from very mature clients, meaning they've got real projects behind them. Some of those opportunities come from developers and other aspects that don't, right? But it's -- I think the amount of attention that we picked up on not only, I will say, in the marketplace, but I would also say within the Department of Energy and the Energy Dominance Council has also been significant on this and the support of this as well, too. So we have -- we're in discussions with a lot on Capitol Hill as well as the Department of Energy, and they're very much aware of the progress, not only on the Applied Base Electron project, but also potentially on 1 or 2 of these others as well. So all of that has been very much a positive for us today, but we'll see how that goes in the future. But it's pretty exciting at this point in time.

Great. That's helpful. If I can sneak one more in, maybe for Cameron. Is there a way to kind of bifurcate how much of the increase in the guide is related to the kind of core business outperformance versus contribution from this project?

Yes. I mean, Jeff, I think right now, it's with Applied being such a large contract in days, weeks of POC accounting, we can move that one way or the other. I don't think we're going in that kind of detail at this point in time just because it could move depending on how all the stuff works out, which is also why we got that larger range.

There are currently no other questions in queue. So I'll pass it back to Sharyn Brooks for closing remarks.

Thank you, everyone, for joining us. That concludes our conference call. A replay will be available for a limited time on our website later today.

Good afternoon. Thank you for attending the Babcock & Wilcox Enterprises Third Quarter 2025 Conference Call. [Operator Instructions]

I would now like to turn the conference over to our host, Sharyn Brooks, B&W's Director of Communications. Thank you. You may proceed, Ms. Brooks.

Thank you, Victoria, and thanks to everyone for joining us on Babcock & Wilcox Enterprises Third Quarter 2025 Earnings Conference Call. Joining the call today are Kenny Young, B&W's Chairman and Chief Executive Officer; and Cameron Frymyer, Chief Financial Officer, to discuss our third 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 also in our Form 10-Q that was filed this afternoon and our Form 10-K that is on file with the SEC and provide further detail about the risks related to our business. Additionally, except as required by law, we undertake no obligation to update any forward-looking statements.

We also provide non-GAAP information regarding certain of our historical and targeted results to supplement the results provided in accordance with GAAP. This information 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 third quarter earnings release published last week and in our company overview presentation filed on Form 8-K this afternoon and posted on the Investor Relations section of our website at babcock.com.

Thanks, Sharyn. Well, good afternoon, everyone, and thanks for joining us today on our call. We continue to execute on our strategy to expand our Global Parts & Services business while also focusing on large opportunities within North America and reducing the majority of our debt obligations. The increasing demand for power in North America drives our growth and aligns well with our strategy to divest certain noncore assets to significantly reduce our debt while positioning B&W to play a pivotal role in supporting AI data center expansion and increased baseload generation needs.

We are pleased to report a number of positive developments this quarter at Babcock & Wilcox, both in relation to our quarterly financials as well as our recent projects and partnerships that we have completed.

Adjusted EBITDA and operating income significantly outperformed company and consensus expectations this quarter. Adjusted EBITDA was 58% higher compared to third quarter of 2024, while operating income was up 315% when compared to the same period of 2024. Our improved margins directly reflect the record quarter results for our Parts & Services business.

During the third quarter, our Global Parts & Services achieved the highest quarterly and year-to-date bookings, revenue and gross profit in recent company history. Our growing backlog continues to benefit from increasing demand across projects, upgrades and construction as power generation needs for industrials and utilities in North America continue to accelerate. In total, we saw our backlog rise 56% quarter-over-quarter to a total of over $393 million.

Through a combination of disposition of noncore assets and equity raises, we have paid or will pay down the February 2026 notes by end of the year 2025. We also have the liquidity to pay down the December 2026 bonds, a process that we plan to begin by end of year. Over the course of the past several months and with key equity raises last week, our balance sheet has significantly improved. With this improvement, along with the tailwinds from baseload generation demand in the market, we have positioned B&W for substantial growth in 2026. We are currently projecting a range of $70 million to $85 million in EBITDA from our core business in 2026, which is 80% growth year-over-year from 2025. And this does not include any revenues or margin from our recently announced AI data center projects.

We have been in discussions on several opportunities within the AI data center space, and we are seeing Agentic AI as a new catalyst for higher power demand in the U.S. and around the world. We are pleased to announce that we have signed a limited notice to proceed with Applied Digital to begin work for the delivery and installation of natural gas technology that will provide 1 gigawatt of efficient energy for an AI factory and data center project. The total project valued at full notice to proceed will be over $1.5 billion in total once finalized, and we anticipate that full notice to proceed to be released in the next few months.

As a part of this deal, B&W plans to design and install 4 300-megawatt natural gas-fired power plants consisting of proven boilers and associated steam turbines to support Applied Digital's AI factory. The plant is targeted to begin operation in 2028. This technology carries equal efficiency as simple cycle turbines and can be operational much faster than combined or simple cycle power plant options. The impact from this deal on B&W is profound adding $3 billion to $5 billion in AI data center opportunities in our pipeline.

We are also pursuing other projects and opportunities, which brings our total global pipeline to $10 billion to $12 billion in totality, including ClimateBright and BrightLoop. Taking a look at our BrightLoop technologies, our efforts to progress BrightLoop are moving forward as we further the commercial development of our existing projects and continue working to improve the overall operational effectiveness of these technologies to produce low-cost hydrogen or steam. We're seeing increasing activity for BrightLoop technology, both for steam generation and hydrogen production that can produce energy with lower cost and expenditures. In fact, we're in discussions with a number of oil and gas companies and large utilities about using BrightLoop for specific steam or hydrogen generation projects.

From a ClimateBright perspective, we are seeing an increased demand to leverage carbon credits, both in waste to energy and coal to energy as optional offtake revenues for our customers. We also are in discussions on several opportunities and believe we can announce a significant carbon capture project utilizing our SolveBright technology very soon.

I'll now turn the call over to Cameron to discuss the financial details for the third quarter of 2025. Cameron?

Yes. Thanks, Kenny. I am pleased to review our third quarter results, further details of which can be found in the 10-Q that is on file with the SEC. Our third quarter consolidated revenues were $149 million, which was roughly in line with the third quarter of 2024.

Global Parts & Service remained strong in the third quarter of 2025 with revenues of $68.4 million compared to revenues of $61.7 million in the third quarter of 2024. The improvement is primarily due to the increasing need for electricity from fossil fuels, driven by the demand from artificial intelligence, data centers and expanding economies. Our net operating income in the third quarter of 2025 was $6.5 million compared to operating income of $1.6 million in the third quarter of 2025. Loss from the continuing operations in the third quarter of 2025 was $2.3 million compared to a loss of $7.9 million in the third quarter of 2024, and our adjusted EBITDA was $12.6 million compared to $8 million in the third quarter of 2024, beating Street expectations.

As Kenny stated earlier, we have announced our 2026 full year adjusted EBITDA target range of $70 million to $85 million stemming from our core business, which does not take into account any growth related to data centers.

I'll now turn to our balance sheet, cash flow and liquidity. Total debt at September 30, 2025, was [ $379.3 million ] (sic) [ $309.3 million ] consisting of $98.4 million of February 2026 bonds, $90.9 million of December 2026 bonds and $121 million of bonds due in 2030, with the remaining debt being related to our letters of credits. As of September 30, we had 0 drawn on our asset-based loan. The company had cash, cash equivalents and restricted cash balance of $201.1 million, giving us a net debt as of September 30, 2025, of $178.2 million. On October 2, B&W paid down $70 million of bonds that were due in February of 2026, and we recently announced the remaining outstanding February 2026 bonds will be paid down fully in December of 2025.

Another notable development took place last week when the company was able to raise an additional $65 million of equity, which has further strengthened our balance sheet and shows the ability to pay down the remaining of the 2026 bonds that are due in December of 2026. When factoring in our recent equity raise, this will leave us with a pro forma net debt of $113.2 million, which will be between 0.8 to 1.6x targeted 2026 EBITDA.

Lastly, although we said on Friday that we would be pausing sales under the ATM program, we've decided to resume ATM sales and intend to sell shares under the ATM program opportunistically based on market conditions and our share price.

I'll now turn the call back over to Kenny.

Cameron, thanks. Well, in closing, as always, I would just like to recognize the efforts of our dedicated and talented employees that are around the world who focus on working hard every day to meet the challenges and supporting our customers while meeting the energy demands of today.

I will now turn the call back over to Victoria, who will -- and I think we have time for about 3 questions. So Victoria, I'll turn it back over to you. Thanks.

[Operator Instructions] Our first question comes from the line of Aaron Spychalla with Craig-Hallum.

Maybe first on the $1.5 billion project. Can you just talk a little bit about next steps that are needed and how you see potential contribution from a timing and margin perspective moving forward? And then just thoughts on the supply chain and kind of working capital needs as that ramps?

Sure. No. I appreciate that, Aaron. Thanks for jumping on the call today. So first of all, we're actually right now working with Applied, obviously, to finalize the exact location where this will take place and so we can finalize the full notice to proceed, which again, as [ John ] mentioned in the comments, we anticipate being done here in the next couple of months.

As part of that, we're also behind the scenes working with a few of the steam turbine generators at this point in time and have secured some verbal commitments that we have the ability to meet these time frames. And so we'll look to finalize those details on that as well as our own manufacturing of these particular boilers.

The great news, I think, in this case is that we're using -- I'm going to use the term off-the-shelf. So these are -- these 300-megawatt boilers are designs that we have installed at several locations prior to this event. So this is a proven technology and architecture. And so there's very little, if any, engineering that needs to be performed in order to get these to a manufacturing state. We already have the construction drawings of each of these fabrication diagrams, the layout, the header layout, the tubing, everything associated with this type of a boiler to meet the specs and standards here in the U.S. And so it's an easy method for us to move that right into the manufacturing process. And that's the exciting part here. It's a rare opportunity for us to do and utilize a design that we have implemented in many locations prior.

So we're obviously very comfortable with the standards and the performance of the boilers, easy to move into manufacturing and leveraging the fact that we have access to the steam turbines in a much faster go-to-market model than trying to leverage a combined cycle or simple cycle turbine plant today. So that's the benefit here on that. But we're working through all of those in parallel with Applied and again, plan to have the full notice proceed signed here in the next couple of months. And we're working diligently behind the scenes to move the project full forward.

As it relates to working capital aspects on it, we'll work with Applied on the timing of that and how we move that forward. That will be part of the full notice to proceed process here over the next couple of months. Typically, for us, we typically keep the working capital on projects like this at a neutral to positive. So down payment requirements that we have with manufacturers or subcontractors are typically collected upfront on these projects and have no reason to believe it would be any different here. So there -- that we're moving forward under that direction and Applied understands that as well. So we think that will help minimize this a little bit overall and any impact to working capital in the company, and we should remain cash flow positive on this as we typically do on projects like this at this point in time.

So that's the overall plan. As far as revenue recognition goes and margin recognition, obviously, we're a POC shop under that. It will depend on timing of when we can apply the cost to the project into next year. Some of that will be based on the final notice to proceed and the time frame there. So it's a little bit vague and it won't be terribly much, I would say, in '26. I don't know, I'm just throwing out a number, maybe 10%, 15% of the value would be realized then. The bulk of it would, based on the accounting method would be realized more in the '27 and obviously '28.

So we've -- based on the fact that we're still finalizing that NTP and our guidance next year, we have not included this project or any other data center projects in that $70 million to $85 million range. So this would represent complete upside and probably significant upside to any number that we would be putting out right now.

Cameron, I don't know if you have anything you want to add to that, but otherwise, I'll turn it back to you.

No, no. I think you hit all the points, Kenny.

That's very helpful. And then maybe just second on the additional pipeline, it sounds like last week, it was $1.5 billion. Today, it sounds like maybe $3 billion to $5 billion. So maybe some growth there. Can you just talk about how mature some of those opportunities are and potential timing of when you could see some of those move forward as well?

We are obviously in talks with several as it relates to -- and have been -- I want to emphasize that have been prior to this announcement in talks with several on this particular solution in different sizes, right? Meaning and some would be smaller in maybe 0.5 gigawatt range, some are perhaps even a little larger in a 1.5 to 2 gigawatt range. So there's a number of these opportunities where this solution makes the most sense from both a cost standpoint as well as delivery and time frame standpoint. Some of that would be subject to complete availability in the manufacturing and the steam turbine side. And again, the early indications are we've got some real positive capacities there to meet this entire demand.

And so it's -- on some of those, that we'll be working with them to move forward, hopefully, on a couple of the opportunities if we can get them to commit I would say those would be in the next year's time frame to announce on that regard. But we're obviously involved with these other opportunities that are out there and fully intend to push those across the goal line. That's on this solution.

The other ones that we're heavily working with is related to our Denham partnership, and we are working very closely with Denham Capital right now on a number of locations to convert some coal plants to natural gas, and that's also in the works as well, too. So I think we have -- those opportunities are within that opportunity and pipeline as well as the other natural gas and steam turbine combination that were proposed for Applied would also be in that opportunity as well. So the combination of all that and the sizes of those, we decided to take the pipeline up even a little bit further from last week.

Our next question comes from the line of Rob Brown with Lake Street Capital Markets.

On the ability or your capacity for that pipeline, what is your capacity sort of in this power gen segment? And how do you sort of think about capacity kind of limits there?

So the main -- so there's 2 main components to that capacity aspect, Rob, and thanks for jumping on, by the way. There's 2 aspects to that. One is the manufacturing of the boiler fabrication of the boiler. For us, that's part for the course, right? That's what we do. And we have been looking and evaluating our own internal capacities that we have today as well as our external partners that we use in various places around the world to manufacture these kind of systems.

So all of those companies are on board with this. And quite frankly, it's a volume. Many of these manufacturing and fabrication groups are comfortable and used to dealing with projects of this size. So it's just a matter of how much we can put into each location on that, and we're going through that right now. So within -- I would say, within the pipeline that we have today, again, depending on the exact timing of some of this, we feel pretty comfortable that we can complete the manufacturing and have the capacity to do that on the boiler fabrication and manufacturing.

On the steam turbine aspect of this, the good news is there's a lot more steam turbine companies than there are combined cycle and simple cycle companies out there. We're in -- can't give names right now, but we're in discussions with several and are quickly trying to move into a relationship with them that we have this capacity secured. And we believe, just based on a lot of the early conversations that we're having with these particular groups that, that capacity does exist. Maybe across a couple of different manufacturers, and we'll have to -- we'll work through that. But from a steam turbine perspective, we think these opportunities do exist. They're obviously very excited because this is a way for them to get involved in a high-growth area for them as well, too. So, so far, it's been full energy, if you will, across both the manufacturing side and on the steam turbine side as well.

Okay. On the -- just switching to kind of the ClimateBright projects. I think you mentioned the CO2 capture opportunity that's developing. Could you give a little more color there on when that might happen and what the size could be?

Yes. So there are a few projects that we're in dialogue and discussions on. Some of these are FEED studies that we always talk about FEED studies out there, FEED studies, meaning Front-End Engineering Design studies, and we have several of those going on at this case. So we're in discussions right now to finalize an opportunity and feel like that could happen fairly soon, hopefully, not days, weeks at max on a project that we can put out. And order of magnitude would be in the, I'll just call it, $70 million to $100 million-ish in that category. I'll give it kind of a little bit of a range there as we finalize it. But on the initial project itself, and then there's probably more opportunities and upside on that.

But we are seeing in the U.S. from some of these operators and the hyperscalers and other aspects where a few occasions, they would like to have the CDRs or the carbon offtake as -- and the groups that are building out these power plants are looking at how they can capture CDRs or carbon to be able to sell those as additional revenue for the plant owners as it relates to building out the infrastructure to support the hyperscalers. And we've seen that with a few developers, and we've got, I think, a pathway here to hopefully announce a project or 2, but one specifically in the next days, if not weeks.

Congratulations on the progress.

Our next question comes from the line of Brent Thielman with D.A. Davidson.

Kenny, I want to ask just back on the Applied Digital contract, the $1.5 billion, is that all within B&W's scope? I know this is all getting worked out. But obviously, it's a massive potential uptick to the backlog that you have today. So I just wanted to kind of understand what's all in there.

Yes. No, this is -- that $1.5 billion would anticipate and represent BW scope as associated with this project, right? B&W would bring all of the aspects and elements of the boiler and the steam capabilities plus the construction aspect, right? We have our own construction company here in the U.S. So it would be blended with construction, the steam turbines and the boiler aspect of it. And then we'll work through some of the other elements to complete the plant on time and on schedule. We'll work with Applied on that.

So we put it as over $1.5 billion at that site. The total value could be higher depending on final scope, and we'll just have to work through that. But I wanted to give some idea and indication of what it looks like from a B&W perspective. So we intended that to be our scope. The scope of the project would be a little bit larger under that scenario, but we'll work with them to complete that once we have the NTP finalized.

Okay. Yes, I appreciate that, Kenny. And then I guess, just as a follow-up, anything you can say in terms of just risk sharing associated with it. Is this all fixed price in terms of execution? And I noticed there's an equity component that Applied Digital gets in BW. Maybe just talk about that and whether that's going to be something that's ongoing as you look to maybe some of these other opportunities out there.

Hard to say whether that same model would exist elsewhere too early. Not saying it won't, but hard to say right now on it. We viewed it as a very positive thing. We think having those warrants out there, obviously, there's incentives for Applied to get the NTP done sooner and complete, obviously. But also, there's buying, if you will, or support for BW overall, not only as a potential customer and client, but as a shareholder as well, too. And we think all of that is very much positive. And we obviously have seen that throughout some of the data center and other aspects as well, too.

So we view that as overall very, very positive. As far as the risk share, we're working through that right now on how that would appear to be. And obviously, with the outside manufacturers and speed turbines companies would share a part of that risk overall as well, too. And we, as we always do, we look to balance it. I think the biggest piece here is that -- and this is what greatly reduces the risk overall to us is that this is -- these are projects and technologies that we have performed on a multitude of other occasions. So there's no new technology being designed or installed here or implemented here. This is well-proven technology that has been installed in tens, if not dozens of locations where B&W has actually constructed these.

Obviously, we have the I think, advantage in the U.S. having our construction company and leveraging the boiler makers who are a great welding and fabrication aspect of this on-site. But again, these are all boilers that have been built previously. So we know the performance, we know the complexity that's involved in these, the time frame that's involved in these and as well as we've gone through all of the risk aspect of overseeing the manufacturing processes of these and understand how to manage that manufacturing process effectively. And we've got all the best practices and everything from each of these that we've implemented in prior periods.

So this is unlike any other large project that B&W has been in historically. This one, I think, is extremely unique and opportunistic because it is something that has been done many, many times before, and there is absolutely no new technologies being implemented here. So to us, that's a significant reduction in risk in that case. And the terms and conditions all be detailed in the final notice to proceed.

Thank you for your questions. That will conclude our question-and-answer session today. I would now like to pass the call back to Sharyn for any final remarks.

Thank you for joining us. This concludes our conference call. A replay will be available for a limited time on our website later today.

That concludes today's call. Thank you for your participation, and enjoy the rest of your day.