BWX Technologies, Inc. — Call Transcript 2026

Ladies and gentlemen, welcome to BWX Technologies' fourth quarter and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode. Following the company's prepared remarks, we will conduct a question-and-answer session. Instructions will be given at that time. I would now like to turn the call over to our host, Chase Jacobson, BWXT's Vice President of Investor Relations. Please go ahead. Thank you, operator. Good evening, and welcome to today's call. Joining me are Rex Geveden, President and CEO, and Mike Fitzgerald, Senior Vice President and CFO. On today's call, we will reference the fourth quarter and full year 2025 earnings presentation that is available on the investors section of the BWXT website. We will also discuss certain matters that constitute forward-looking statements. These statements involve risks and uncertainties, including those described in the safe harbor provision found in the investor materials and the company's SEC filings. We will frequently discuss non-GAAP financial measures, which are reconciled to GAAP measures in the appendix of the earnings presentation that can be found on the investor section of the BWXT website. I would now like to turn the call over to Rex. Thank you, Chase, and good evening to all of you. We closed out a record 2025 with another strong quarter of results that were ahead of our expectations. For the full year, revenue grew 18%, Adjusted EBITDA grew 15%, earnings per share grew 20%, and free cash flow grew 16%, all exceeding the initial guidance we provided at the start of the year. These results reflect our ability to scale successfully in a context of robust demand in all of our nuclear end markets. We ended the year with backlog of $7.3 billion, up 15% year-over-year, with meaningful growth in both segments. In government, we secured new pricing agreements for naval propulsion equipment and fuel, and booked initial scopes on major awards to build out a U.S. Defense uranium enrichment capability and to expand production of high-purity depleted uranium. In commercial, backlog was boosted by CANDU life extensions, multiple SMR projects, and our first engineering contract on an AP1000. Beyond financial performance, 2025 was a year of exceptional strategic success. We completed the acquisitions of AOT and Kinectrics, enabling key wins, such as the $1.6 billion high-purity depleted uranium contract and the owner's engineer role for Bulgaria's Kozloduy AP1000 project. Building on the significant capital we invested in our business earlier in the decade, we continue to invest in our facilities to support our customers and build capacity for future demand. In 2025, we held the grand opening for the BWXT Innovation Campus, the home of our advanced nuclear and microreactor businesses, and continued the expansion project at our large nuclear component plant in Cambridge. We recently completed construction of the Centrifuge Manufacturing Development Facility and are designing a new high-purity depleted uranium manufacturing facility, both to support the NNSA. Earlier this month, we opened the BWXT Digital Center in Melbourne, Florida, which is our hub for digital transformation and AI initiatives across the organization. Turning to segment results and market outlook. Government operations revenue was down 1%, and Adjusted EBITDA was down 5% in the quarter, slightly ahead of our expectations. In naval propulsion, with 2 new pricing agreements in place, our teams are focused on long lead materials, operational excellence, and delivery. During the quarter, we shipped 2 large steam generators for CVN-81, a Ford-class aircraft carrier, from our Mount Vernon, Indiana, facility, highlighting our rhythm delivery for naval reactors. The Mount Vernon facility sits on the Ohio River and has a 1,000 metric ton crane capacity, suitable for lifting the largest nuclear reactor components onto barges directly from the site. Accordingly, we are considering expansion there to supply the U.S. commercial nuclear market. In technical services, a team led by BWXT, including Kinectrics, assumed the management and operations contract for the Canadian Nuclear Laboratories, our first international TSG project. We are tracking several other contract opportunities within the DOE complex, as well as in new domains. In fact, BWXT was an awardee on the Missile Defense Agency's $151 billion shield contract, or Golden Dome, which positions us to compete for infrastructure support and engineering and manufacturing technology development on this strategically important national security program. In microreactor and advanced nuclear fuels, we delivered the first core of TRISO fuel for Project Pele to Idaho National Lab in November. We are also manufacturing TRISO for Antares, which aims to achieve reactor criticality by July 4th of this year, in line with the administration's nuclear executive orders. While others are planning to produce and manufacture advanced nuclear fuel, we are delivering today. Further, in the space domain, we continue to develop the technology required for nuclear thermal propulsion with NASA and are seeing specific opportunities around fission surface power. Lastly, in special materials, our team stood up the Centrifuge Manufacturing Development Facility in just 7 months. For the Defense Fuels Program with NNSA, reestablishing a domestic and uranium enrichment capability for national security purposes. We are also preparing for the construction of a new facility in Jonesborough, Tennessee, for high-purity depleted uranium production. These programs support our robust revenue growth outlook in 2026 and are highly strategic for the future of our special materials portfolio. Turning now to commercial operations. We reported impressive organic revenue growth of 31% in the quarter and total revenue growth of 95%, strong growth in commercial nuclear power and medical, and sales from Kinectrics. Backlog into 2025 at $1.7 billion, up 85% compared to last year and up 16% sequentially, driven by equipment for CANDU refurbishments in Canada and other international markets, and design awards for SMR components to various reactor OEMs. This backlog growth, coupled with robust market demand, supports our expectations for low double-digit organic revenue growth in the segment in 2026. BWXT Medical reached a milestone of slightly more than $100 million of annual revenue, up about 20% from last year, with double-digit growth in diagnostic isotopes, a meaningful increase in actinium sales, and steady growth in TheraSphere. We expect similar growth in 2026 as these factors continue to drive the business. We continue to make measured investments in our medical portfolio as we work through the industrialization of our Tech 99 product, explore new modalities for producing Actinium-225, and around other therapeutic isotopes, such as Lead-212. Turning now to commercial nuclear power, demand is strong, and our opportunity set is expanding. Commercial nuclear power book-to-bill was over two in the quarter, holds your CANDU aftermarket services and components in Canada, Europe, and Asia, a new long-term CANDU fuel contract and design and component manufacturer contracts with several SMR technology providers, underscoring our role as a super merchant supplier for critical nuclear technologies. Additionally, in December, a consortium of BWXT, Laurentis Energy Partners and its subsidiary, Canadian Nuclear Partners, was selected to provide owners engineer services for 2 proposed AP1000 nuclear reactors at the Kozloduy site in Bulgaria. This is BWXT's first meaningful AP1000 award, leveraging our large nuclear project experience and Kinectrics' depth in licensing, regulatory support, and engineering. We are actively bidding component packages for multiple AP1000 projects and expect additional awards this year. With that, I will now turn the call over to Mike. Thanks, Rex. Good evening, everyone. I'll begin with total company financial highlights on slide four of the earnings presentation. Fourth quarter revenue was $886 million, up 19% year-over-year, as strong growth in commercial operations was partially offset by a modest and expected decline in government operations. Organic revenue was up 4%. Adjusted EBITDA was $148 million, up 13% year-over-year, attributable to robust double-digit growth in commercial operations and lower corporate expense, which were partially offset by lower government operations. Adjusted earnings per share were $1.08, up 17%, due to strong operating performance and a higher contribution from non-operating items of approximately $0.05. Our adjusted effective tax rate in the quarter was 19.5%, which was below our full year tax rate of 20.4% due to timing of R&D tax credits. In 2026, we expect our tax rate to be slightly higher at approximately 22%, as growth in our commercial power and Kinectrics businesses will result in a greater percentage of international earnings. Fourth quarter free cash flow was $57 million, and full year free cash flow was $295 million, up 16% compared to last year, inclusive of 17% operating cash flow growth. Capital expenditures in 2025 were $185 million, 5.8% of sales. In 2026, we expect CapEx to be about 6% of sales as we continue to invest in the business to meet our commitments with our government customers and to support the growing demand in our commercial markets. During the quarter, we also completed a $1.25 billion convertible debt offering with a 0% coupon. In connection with the offering, we entered into a cap call transaction, which essentially increased the conversion price to over $396. Funds from the transaction were used to repay balances on our credit facility and term loan, which we in turn renegotiated with more favorable terms and increased capacity. This was a highly opportunistic transaction for BWXT. We reduced our cost of debt, lowered our interest expense, enhanced our financial flexibility, increased our liquidity, which stood at $1.7 billion at the end of the year. Moving to the segment results on slide 6. In government operations, fourth quarter revenue was down 1% as expected, with growth in special materials and contribution from AOT being offset by lower microreactor volumes and long lead material procurement for naval propulsion equipment, the latter of which was a benefit to our results in the first three quarters of the year. Adjusted EBITDA in the segment was $111 million, resulting in an Adjusted EBITDA margin of 18.8%. Our quarterly Adjusted EBITDA margin was slightly lower than the full year result of 20.4% due to mix, as newer projects in the segment began to ramp. Turning to commercial operations, revenue was up a robust 95%, driven by 31% organic growth, with strong growth in both commercial power and medical, and contribution from Kinectrics. This reflects both accelerating organic momentum and the strategic expansion of our commercial capabilities. Adjusted EBITDA in the segment was $44 million, up 87% from last year. Adjusted EBITDA margin was 14.9%, a notable improvement from last quarter. In 2026, we expect the commercial operations segment Adjusted EBITDA margin to increase by roughly 100 basis points, as higher revenue and more normalized mix is partially offset by continued growth investment as we scale the business for the future. Beyond 2026, we expect growth investment to be less of a margin headwind, as continued investments are offset by additional revenue growth. Turning to our 2026 guidance on slide 10 and 11 of the earnings presentation. From an operational standpoint, our guidance is largely in line with the preliminary outlook we provided in November. We expect revenue of approximately $3.75 billion, up high-teens compared to 2025. In government operations, we expect approximately low-to-mid-teens growth, with over half coming from the Defense Fuels and HPDU contracts. In commercial operations, we expect approximately 25% growth, driven by low-double-digit growth in commercial power, high-teens medical growth, and a full year of contribution from Kinectrics. For Adjusted EBITDA, we are guiding $645 million-$660 million, up low-to-mid-teens compared to 2025. In government operations, we expect margin to be slightly lower, given the significant revenue contribution from new programs, which begins at a lower initial profit recognition and expands over time as execution milestones are met and contract risk is reduced. In commercial operations, we expect margin to trend back toward historical levels, as I previously discussed. Regarding the cadence of operating earnings, we anticipate our results will be slightly more back-half weighted than usual, with about 55% of full-year EBITDA anticipated in the second half. This will largely be reflected in first quarter results, with a return to more normal seasonality in second quarter. In the first quarter, while we expect solid year-over-year organic revenue growth, EBITDA is likely to be flat to slightly higher in both segments due to seasonality, short-term impacts of mix, and ramping of new programs. In government operations, this will likely translate to first quarter EBITDA being roughly flat year-over-year, yielding a margin that is slightly below the full year guidance rate. In commercial operations, margins are expected to start the year well below our full year guidance before improving sequentially each quarter throughout the remainder of the year, reflecting program timing and mix. These assumptions lead to non-GAAP earnings per share guidance of $4.55-$4.70, up mid to high teens, driven largely by growth in both segments, with a modest contribution from non-operational items as lower interest expense is partially offset by a slightly higher tax rate and share count and lower pension and other income. From a quarterly perspective, while we anticipate earnings per share to follow a similar pattern to our operating earnings, with first quarter EPS relatively flat compared to last year, we are highly confident in delivering our full-year earnings growth outlook. Finally, we expect free cash flow of $305 million-$320 million, inclusive of low to mid-teens operating cash flow growth, in line with our Adjusted EBITDA growth outlook. Importantly, this level of cash generation supports both continued reinvestment and long-term shareholder value creation. Overall, we see 2026 as another year of meaningful operational growth for BWXT. We've strengthened our balance sheet, expanded our commercial platform, and positioned the company for continued margin improvement and cash generation. Our focus remains on disciplined execution, prudent investment, and long-term shareholder value creation. With that, I will turn it back to Rex for closing remarks. Thanks, Mike. 2025 was a monumental year for BWXT. We sit at the intersection of the national security and commercial nuclear power markets in a market-leading position with unmatched scale, experiential qualifications, and regulatory credentials. It's an exciting place to be, and the outlook is bright. This position demands that we execute to drive quality, earnings growth, and shareholder value. Our priorities are executing against our robust backlog, process optimization, new technology adoption throughout the organization, and on disciplined growth investments, both organic and inorganic. With that, we look forward to taking your questions. Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via speakerphone in your device, please pick up your handset to ensure that your phone is not on mute when asking your question. Again, press star one to join the queue. We do request for today's session that you please limit to one question and one follow-up question only. Thank you. Our first question comes from the line of Scott Deuschle with Deutsche Bank. Your line is open. Hi, good evening. Mike, should we expect government operations margins to trough in 2026 on these mixed headwinds, or could there be incremental mix pressure in 2027 that we should be mindful of? Thanks, Scott. I, no, I don't see any real incremental pressure as we look at 2027. I, I think as I've mentioned in the last call and, and maybe over the last couple of earnings calls, we feel really good about the current pricing agreement. If you look at our core naval propulsion business, we're actually performing really well. Efficiency and utilization are up at our best sites and our largest sites, and so we see a lot of opportunity as we move through the future. I think what you're seeing in 2026 is a little bit of this mixed pressure. As we discussed, half of the growth is coming from these new programs where we're making infrastructure investments, and so you're seeing a little bit of a decline there, but we would expect a rebound in 2027. Okay. Rex, can you talk about how BWXT is using AI internally today? Are there any business functions where you're particularly excited about the potential impact of AI over the medium term, whether that be from cost, synergy, opportunity, or something else? Thank you. Yeah, sure, Scott. I think, thanks for the question. I think there's an outside story for AI with BWXT, and there's an inside story. I think you obviously know the outside story, which is there's an expectation that nuclear power will power the data centers of the future, and I think that's a reasonable expectation, but that's all in the windshield for us. Certainly, that's not part of the current business mix. The inside story shapes up like this: I think there are, I think of it in kind of three phases. The first phase was BWXT using machine learning to improve certain in-internal functions, particularly manufacturing processes. We, for example, put hyperspectral sensors on complex weld processes and used a machine learning algorithm to figure out when those things were going out of spec, which saved us a ton of expensive rework. We did it, and there are other examples I can cite, so I'd call that phase one. Phase two is, you know, with re-release of large language models, we're figuring out ways to use those in our business to improve functional efficiencies and the like. In this phase of it, we're basically democratizing access to the tools, I mean tools like Databricks and ChatGPT and the like. The third phase is going to be factory automation. That's kind of our burning platform in the sense that we've got a lot of traditional plants that need to be automated and digitized. In the future, it's our expectation to have fully digitized quality records, automated inspection, digital twin representations of every component that we manufacture. That's the phase that we're going into right now, and we're quite excited about that. That's really interesting. For Phase III, do you see any limitations from, the security clearances required, things like that, that would prohibit your ability to deploy those types of systems, particularly for government operations? Or do you, do you think you would have the, the ability to use things like digital twins and, you know, some of those classified areas as well? I'd say not much, Scott. I mean, certainly we have to be concerned about using Wi-Fi and, and Bluetooth kind of systems in a classified manufacturing environment. There are things that we will have to work around, but I think we will work around them with support from our customers. Okay, thank you. Thank you. Our next question comes from the line of Matt Akers with BNP Paribas. Your line is open. Yeah. Hey, guys. Good afternoon. Thanks for taking my question. I, I wanted to ask, I, I think some of the commentary from the shipbuilder this quarter was, was relatively positive in terms of just some of the supply chain bottlenecks they, they had seen maybe starting to get a little better. Just curious if you're seeing any of that flow through to you in terms of maybe more, you know, pulling demand forward or anything like that, or if you're, you're seeing anything along those lines. Yeah, we've seen that encouraging news, too. I, I'd say, our reaction to it is that from the very beginning, I think we've held the view, and I believe that the Navy and, and the government held the view that instead of slowing down the supply chain, what you got to do is fix the bottleneck, and so I think we're seeing that now. I think we're seeing pretty encouraging progress at the shipyards. I think you'll know, and we announced this a couple of quarters ago at least, that, that Admiral McCoy, who'd been running our government operations business, was seconded into the Department of Defense to support the Navy for that specific purpose, the express purpose of improving throughput at the shipyards. That's what the-- that's what the certainly what the nation needs to do. That's what the Navy needs to have. I'd say we're continuing at the pace we were, you know, delivering on our delivery schedules and very, very, very pleased to see the shipyards turning the corner and bouncing off the bottom in terms of delivery rate. Yeah. Thanks. I, I guess as a follow-up, just, I wanted to ask on capital deployment and sort of what your priority is now and how big, how big could M&A be as a part of that after AOT and Kinectrics? Yeah, so look, we're really excited about some of the things that we've done to strengthen our balance sheet. You know, we, we did the convertible in the fourth quarter, I think, which really gave us a lot of flexibility. So we, we feel well-positioned for, you know, potential M&A as we come into 2026. You know, I will say, as we look at a number of different targets that are out there, you know, we're highly focused on continuing to drive something within our core and also very highly focused on driving an increase in our overall capacity as we prepare to support our customer needs in the future. So those are the things that we're gonna be looking for. We have a number of assets that we always, you know, look at on a consistent basis, but I do think that we will continue to see M&A as a big part of our capital deployment strategy. Great. Thank you. Next question comes from the line of Jeffrey Campbell with Seaport Research Partners. Your line is open. Congratulations on the quarter, and thanks for taking my question. I'll just stick with one. Rex, you mentioned your U.S. commercial facility might be built at Mount Vernon. I just wondered, are there any particular challenges in siting a commercial facility adjacent to one that's dedicated to defense purposes? Thanks. Yeah. Thanks, Jeff, for the question. Good to hear you. No, I, I think it's the opposite, right? There's some synergies between our government business there and the, you know, the would-be commercial facility there. For example, you'd share radiography facilities. I did mention that we have a 1,000 metric ton crane capacity to stevedore components right onto the Ohio River there. We would certainly jointly share those assets and be able to amortize the cost over those assets together. I think there's certain advantages. We would segregate those businesses for, for certain reasons, financially. Yeah, no, very good reasons and very good synergies for putting those two things on the same site. Great. Thank you. Thank you. Next question comes from the line of Robert Labick with CJS Securities. Your line is open. Hi, this is Will in for Bob. As a U.S. company with obviously strong operations in Canada, what is the latest impact, if any, on the tariff situation? In general, does the seemingly souring of U.S.-Canada relations have an impact on BWX? You know, knock on wood, it hasn't so far because we're still operating under the framework of the USMCA trade agreement, the US, Mexico, Canada trade agreement, that, you know, that was struck in the, in the last Trump administration. There, there are no tariffs in that, in that framework on medical products or on nuclear components, happily. This last announcement, around 10 and then 15% tariffs across the board, does not apply to the USMCA agreement, so we're still operating in that framework. Now, that's being renegotiated right now, so we'll see how that comes out. I'm certainly hopeful that trade relations between the U.S. and Canada and Mexico remain normal and continue to, you know, not have a negative influence on our business. Thank you. One more: As we look over the next several years, we have DEUC and HPDU incremental growth this year and naval growth coming in 2027. Beyond that, can you discuss the timing of SMRs, Canadian new builds, micro reactors, and other long-term layers to your growth map? Yeah, I'd say, you know, a variety of different time frames for all of that stuff. Then we mentioned on the script that, that we now have business with AP1000 in Europe, with that Kozloduy owner's engineer contracts. We certainly have an SMR. We have SMR contracts at hand right now, but we're certainly making the reactor pressure vessel for GE, and we're doing a number of other components for different small modular reactor suppliers. So I think you just see that building over the years. It's my expectation that we'll have additional orders for the BWRX-300 this year. It's also my expectation that we'll have orders for the AP1000 this year. We'll see. Those aren't in hand yet, but I think we're starting to see the commercial side of our business build very nicely, and we have forecasted pretty aggressive organic growth there, but most of that is in hand. I think you can see small modular reactors ramping up, you know, starting now, essentially. Microreactors, of course, we've had a good program going for several years now, but we now have the Janus program as, as sort of a follow-on program to Pele, and we're in a good competitive position for that, and we're hoping for a good outcome. You can see that building over the next few years. Medical's been growing at this sort of 20% compounded clip. you know, we're seeing generally very good demand in all of our markets, and we expect it to build, you know, at various timings over the years. Thank you. Thank you. Next question comes from the line of Jeff Grampp with Northland Securities. Your line is open. Evening. Thanks for the time. Rex, to, to, to go back on the, the AP1000 comments that you had in your prepared remarks, can you give us a sense for BWXT's revenue content per project you're competing on or, or any generalities there, just to kind of get a sense of, of materiality for some of these projects for the company? Thanks. Yeah, I think we've characterized it historically, for the large reactors, I think on a CANDU new build, which was not your question, but on that one, it's CAD 500 million to CAD 1 billion, perhaps. particularly in Canadian, with our, with the Kinectrics contribution, maybe pushing to the high end of that. I'd say on an AP1000, depending on the components that we win, steam generators and whatnot, you could think of, you know, in the hundreds of millions of dollars, maybe in the low hundreds of millions of dollars. But that's a bit of guesswork, right? We don't know what content we're gonna win yet. We're bidding on a lot of different things, and we'll just have to wait and see how that comes out. Understood. That, that's helpful. Thank you. For my follow-up on some of the recent government contracts, you guys alluded to having some, some lower margins at the front end. I, I'm just wondering structurally, as these ramp over time, should we expect just kind of a kind of linear progression in margin over time as these mature? Or is it kind of a more of a stair-step function as milestones are reached? Just kind of wondering to, to level set expectations as those contracts kind of roll through the results here. I, you know, I would say that the, the contracts are structured slightly differently. You know, we, we are in the first phase of negotiating under the Defense Fuels Program, and then for HPDU, that's, that's a longer kind of upfront negotiated program. I think in both cases, what we would typically do, along with our processes, is kind of evaluate, you know, the overall margin performance. Usually, as we meet various milestones and reduce risk into those programs, is when we would incrementally adjust margin. Those programs, we, we feel like we have a great opportunity to perform well, but, but it's a little early days and, and we talked a little bit about how we're doing some infrastructure build-out, and so we have some lower margin components associated with those initial, those initial costs. We do expect that as we start to get into full ramp of, you know, processing of the materials and production, that ultimately we'll have an opportunity to outperform. Got it. That's helpful. That's helpful. Okay, thank you, guys, for the time. Next question comes from the line of Jed Dorsheimer with William Blair. Your line is open. Hey, thanks for taking my question, and congrats on the quarter. Rex, I guess, first question, Pentagon just released the, you know, $29.2 billion spending, added a, a new, sub... I'm just wondering how that compares to, to your expectations. Was that ahead, in line, behind your expectations? Any surprises as you, as you look through the, the, the budget allocation? I have a follow-up. Yeah, sure, Jed. The, that appropriation of funding really doesn't influence our business, right? Our, our programs are funded through different lines, it's, it was a neutral for us. We are still on the shipbuilding schedule at 2 Virginias a year, 1 Columbia a year, and, and 4 is more or less on 5-year intervals. It was a, it was a, we were indifferent to that news. Got it. Thank you. Maybe for both you and Mike, as you think about capital allocation on the commercial side of things, you know, you're in the CANDU in, in Canada and abroad. You're -- you've just gotten into AP1000, and you're in a variety of SMRs, between GE, Rolls-Royce, and also, you know, some of the new players. I'm just curious, how, with, with that level of visibility, you know, are you... How are you thinking about the business? Are you seeing, i-is it, is it sort of, you know, growth at a steady pace, but in different regions that you're able to support? Or do you see any particular technology that's, that's, you know, advancing at a, at a faster pace? How are you thinking about, you know, adding resources to, to supply those markets? Yeah, I'd say when you look at our capacity in Cambridge, Jed, it's, you know, it's not. You could see a couple of years into the future where we start to look capacity constrained, and so we're looking for assets, in particular, in the US. We've got things in, you know, interesting targets in the acquisition pipeline, and I mentioned explicitly on the call the thought of building a plant at Mount Vernon. We think we need US capacity first and soonest, and we put a high emphasis on that. I think the second interesting opportunity is around Europe, that there's an appetite for small modular reactors there. I think, you know, whether we would invest there, I think depends somewhat on localization demands. Yeah, we need capacity. We need it pretty soon because we see a lot of demand coming in the future, and we'll start in the U.S. with it. Great. Yeah, Jed, the only thing I'm going to add is, I would just say that- Yeah. Go ahead, Mike. ... in addition to expanding footprint, you know, we are also investing in technologies to drive throughput within the factory. It's not just a, you know, let's go get as much footprint as we can, because we're trying to drive throughput through our operational excellence initiatives, which really supports the overall workforce as well. That, that's an important aspect of, as we look to capital deployment and where we want to spend money on additional machinery and technology. Great. Thank you. Next question comes from the line of Samuel Struhsaker with Truist Securities. Your line is open. Hi, good evening, guys. On for Michael Ciarmoli. I appreciate you taking the questions. I think just to start, kind of a two-part, building off of the conversation around SMRs and microreactors. I was curious if you guys could just put a little more detail on kind of where you are with the NASA and military microreactor programs, and then also with the growth that you're seeing in small modular reactors, how are you guys looking at the TRISO fuel market overall in terms of where it's at now and potential opportunities moving forward? Thanks. Yeah, sure. A few questions embedded there. On microreactors, we're in the middle of Pele. We deliver that to Idaho National Laboratory next year. You know, we announced the delivery of the fuel for that reactor at the end of last year, so we're proceeding apace, and that reactor will start undergoing testing, 2027, 2028 timeframe. Think of that as a precursor to the Janus program, which is in procurement right now. They're soliciting offers, offers from various technology providers, including us. We see that one as a super interesting opportunity. On the NASA side, we're still doing some work on nuclear thermal propulsion, although it's not within the context of the DRACO program, we still have some level of effort with NASA. I think the bigger opportunity in the space market is around fission surface power. Looks like NASA intends to procure a fission reactor for a lunar base. Certainly we have, you know, got the right credentials to compete for that. In terms of TRISO fuel, I think there are two interesting things going on here. One is demand on the government side that's related to programs like Project Janus, where the microreactor technologies generally are calling for TRISO fuel or designed around TRISO fuel. I think there's also an interesting commercial play there, and we're certainly evaluating that. You know, either, you know, sub-grid or below-grid capacity, power output, and certainly remote applications for high-density power. A very interesting opportunity around TRISO, and we're looking pretty hard at whether we make an investment there, a larger scale investment. Great. I'll leave it at that for now. Thank you. Thank you. Again, if you would like to ask a question, press star, then the 1 on your telephone keypad. Our next question comes from the line of Jan Engelbrecht with Baird . Your line is open. Good afternoon, Rex and Mike. Progressing a strong quarter. I think just wanted to return to the, the AP1000 and the CANDU market. As we think about, you know, the AP1000 that, that owner, owner's engineer contract you won, and just in terms of components, do you consider your bid on sort of the component work to be more competitive if it's a North American project that gets announced versus, you know, something in Europe? Because, you know, on, on AP1000 in Poland, there's they've announced sort of the steam generator, supplier on that one, and I know you guys didn't bid on that. How should we think about as a new AP1000 contract or project gets announced, do you see that you have a sort of a better probability on which continent it's on? Or just, just how should we think think about that? I don't think we're thinking of it that way, J.F. The owner's engineer contract with, with Bulgaria was a unique opportunity for us to team up with a component of Ontario Power Generation. We have their imprimatur, and we have our deep engineering capability, which is augmented by Kinectrics. That was a very particular opportunity there. I think, I think we're sort of geographic agnostic when it comes to component supply. We hope to be able to compete reasonably well in all these markets. But I would also say that, you know, as the market really starts to warm up and we start to see real capacity constraint, I think we'll be more competitive and we'll have more pricing power. I'm optimistic about all of it. Perfect. Thanks. Thanks, Rex. Just a quick follow-up on the naval nuclear business. You know, a lot of shipbuilding, and reconciliation funding for shipbuilding, and then you just got the news from Australia. They're gonna invest, I think, close to $3 billion in their own shipyard. In terms of second source opportunities, can you just sort of how are you thinking about long term, you know, all this new funding that's going on, it seems that there's really a lot of attention being placed into sort of reducing the bottlenecks? How does that set you up, you know, beyond 2030 for long-term growth in that segment? Yeah, maybe a little hard to say. I mean, right now we're, you know, we're sort of building our, building our guidance and our internal forecast around the shipbuilding plan. We do have some business on the AUKUS side related to production capacity that's giving us a bit of growth here in 2026. Of course, there's the sort of the wild card of South Korea out there. We would hope to be involved in, say, fuel manufacturing at least, if not reactor cores. There are interesting possibilities out there. I would say that if you, if you think about reconciliation and just a broader defense budget, I think you'd see more opportunities around microreactors, fuel, and other such things that are sort of not prescriptively mapped into the shipbuilding schedule. A bit of a TBD for us, but, you know, certainly exciting on the national security side of our business. Perfect. Thanks, Rex. Thanks for taking my questions, Rex. Appreciate it. Thank you. Next question comes from the line of Andre Madrid with BTIG. Your line is open. Hey, this is Ned Morgan on for Andre. I just want to ask and get the latest on the Canadian Competition Bureau's investigation into the Kinectrics acquisition. It's been pretty quiet on, on our front. No news on that one. All right. A follow-up. Is there any update on when we could see approval of Tech 99? Yeah, not much new there. I've said the last couple of quarters that we are in the sort of the grueling last mile of that, around some issues with product quality, filtration, concentration, things that we've been working on. We do have new leadership in that medical business, and the, and the person of Jason Van Wart is showing a lot of strong leadership in that business and has Jason has some compelling new ideas around our commercial product strategy, including Tech 99. Early days on that, but we'll see how that forms up. I find myself encouraged about that business broadly. We have not submitted to the FDA yet, and I don't and I have, frankly, imperfect clarity around that because of these product quality issues that we're having to sort through. I will say that we did not contemplate Tech 99 revenue in 2026 in our guidance to that we just published, and so it's, it's not in our numbers. It'd be, it would be an upside for us if it, if it did occur. Okay. Thank you very much. Thank you. There are no further questions at this time. I would like to turn the call back over to Chase Jacobson for closing remarks. Yeah, thanks, Desiree. Thanks, everybody, for joining us today. We look forward to speaking with many of you and seeing you at upcoming investor events or on calls. If you have any questions, please feel free to reach out to me at [email protected]. Have a great night. Thank you. Ladies and gentlemen, that concludes today's call. Thank you all for joining in. You may now disconnect.

Speaker 9: Ladies and gentlemen, welcome to BWX Technologies' fourth quarter and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode. Following the company's prepared remarks, we will conduct a question-and-answer session. Instructions will be given at that time. I would now like to turn the call over to our host, Chase Jacobson, BWXT's Vice President of Investor Relations. Please go ahead. Ladies and gentlemen, welcome to BWX Technologies' fourth quarter and full year 2025 earnings conference call. ladies and gentlemen welcome to bwx technologies' fourth quarter and full year 2025 earnings conference call At this time, all participants are in a listen-only mode. at this time all participants are in a listen-only mode Following the company's prepared remarks, we will conduct a question-and-answer session. following the company's prepared remarks we will conduct a question-and-answer session Instructions will be given at that time. instructions will be given at that time I would now like to turn the call over to our host, Chase Jacobson, BWXT's Vice President of Investor Relations. i would now like to turn the call over to our host chase jacobson bwxt's vice president of investor relations Please go ahead. please go ahead

Speaker 1: Thank you, operator. Good evening, and welcome to today's call. Joining me are Rex Geveden, President and CEO, and Mike Fitzgerald, Senior Vice President and CFO. On today's call, we will reference the fourth quarter and full year 2025 earnings presentation that is available on the investors section of the BWXT website. We will also discuss certain matters that constitute forward-looking statements. These statements involve risks and uncertainties, including those described in the safe harbor provision found in the investor materials and the company's SEC filings. We will frequently discuss non-GAAP financial measures, which are reconciled to GAAP measures in the appendix of the earnings presentation that can be found on the investor section of the BWXT website. I would now like to turn the call over to Rex. Thank you, operator. thank you operator Good evening, and welcome to today's call. good evening and welcome to today's call Joining me are Rex Geveden, President and CEO, and Mike Fitzgerald, Senior Vice President and CFO. joining me are rex geveden president and ceo and mike fitzgerald senior vice president and cfo On today's call, we will reference the fourth quarter and full year 2025 earnings presentation that is available on the investors section of the BWXT website. on today's call we will reference the fourth quarter and full year 2025 earnings presentation that is available on the investors section of the bwxt website We will also discuss certain matters that constitute forward-looking statements. we will also discuss certain matters that constitute forward-looking statements These statements involve risks and uncertainties, including those described in the safe harbor provision found in the investor materials and the company's SEC filings. these statements involve risks and uncertainties including those described in the safe harbor provision found in the investor materials and the company's sec filings We will frequently discuss non-GAAP financial measures, which are reconciled to GAAP measures in the appendix of the earnings presentation that can be found on the investor section of the BWXT website. we will frequently discuss non-gaap financial measures which are reconciled to gaap measures in the appendix of the earnings presentation that can be found on the investor section of the bwxt website I would now like to turn the call over to Rex. i would now like to turn the call over to rex

Speaker 10: Thank you, Chase, and good evening to all of you. We closed out a record 2025 with another strong quarter of results that were ahead of our expectations. For the full year, revenue grew 18%, Adjusted EBITDA grew 15%, earnings per share grew 20%, and free cash flow grew 16%, all exceeding the initial guidance we provided at the start of the year. These results reflect our ability to scale successfully in a context of robust demand in all of our nuclear end markets. We ended the year with backlog of $7.3 billion, up 15% year-over-year, with meaningful growth in both segments. In government, we secured new pricing agreements for naval propulsion equipment and fuel, and booked initial scopes on major awards to build out a U.S. Defense uranium enrichment capability and to expand production of high-purity depleted uranium. Thank you, Chase, and good evening to all of you. thank you chase and good evening to all of you We closed out a record 2025 with another strong quarter of results that were ahead of our expectations. we closed out a record 2025 with another strong quarter of results that were ahead of our expectations For the full year, revenue grew 18%, Adjusted EBITDA grew 15%, earnings per share grew 20%, and free cash flow grew 16%, all exceeding the initial guidance we provided at the start of the year. for the full year revenue grew 18% adjusted ebitda grew 15% earnings per share grew 20% and free cash flow grew 16% all exceeding the initial guidance we provided at the start of the year These results reflect our ability to scale successfully in a context of robust demand in all of our nuclear end markets. these results reflect our ability to scale successfully in a context of robust demand in all of our nuclear end markets We ended the year with backlog of $7.3 billion, up 15% year-over-year, with meaningful growth in both segments. we ended the year with backlog of $7.3 billion up 15% year-over-year with meaningful growth in both segments In government, we secured new pricing agreements for naval propulsion equipment and fuel, and booked initial scopes on major awards to build out a U.S. in government we secured new pricing agreements for naval propulsion equipment and fuel and booked initial scopes on major awards to build out a u.s Defense uranium enrichment capability and to expand production of high-purity depleted uranium. defense uranium enrichment capability and to expand production of high-purity depleted uranium In commercial, backlog was boosted by CANDU life extensions, multiple SMR projects, and our first engineering contract on an AP1000. Beyond financial performance, 2025 was a year of exceptional strategic success. We completed the acquisitions of AOT and Kinectrics, enabling key wins, such as the $1.6 billion high-purity depleted uranium contract and the owner's engineer role for Bulgaria's Kozloduy AP1000 project. Building on the significant capital we invested in our business earlier in the decade, we continue to invest in our facilities to support our customers and build capacity for future demand. In 2025, we held the grand opening for the BWXT Innovation Campus, the home of our advanced nuclear and microreactor businesses, and continued the expansion project at our large nuclear component plant in Cambridge. In commercial, backlog was boosted by CANDU life extensions, multiple SMR projects, and our first engineering contract on an AP1000. in commercial backlog was boosted by candu life extensions multiple smr projects and our first engineering contract on an ap1000 Beyond financial performance, 2025 was a year of exceptional strategic success. beyond financial performance 2025 was a year of exceptional strategic success We completed the acquisitions of AOT and Kinectrics, enabling key wins, such as the $1.6 billion high-purity depleted uranium contract and the owner's engineer role for Bulgaria's Kozloduy AP1000 project. we completed the acquisitions of aot and kinectrics enabling key wins such as the $1.6 billion high-purity depleted uranium contract and the owner's engineer role for bulgaria's kozloduy ap1000 project Building on the significant capital we invested in our business earlier in the decade, we continue to invest in our facilities to support our customers and build capacity for future demand. building on the significant capital we invested in our business earlier in the decade we continue to invest in our facilities to support our customers and build capacity for future demand In 2025, we held the grand opening for the BWXT Innovation Campus, the home of our advanced nuclear and microreactor businesses, and continued the expansion project at our large nuclear component plant in Cambridge. in 2025 we held the grand opening for the bwxt innovation campus the home of our advanced nuclear and microreactor businesses and continued the expansion project at our large nuclear component plant in cambridge We recently completed construction of the Centrifuge Manufacturing Development Facility and are designing a new high-purity depleted uranium manufacturing facility, both to support the NNSA. Earlier this month, we opened the BWXT Digital Center in Melbourne, Florida, which is our hub for digital transformation and AI initiatives across the organization. Turning to segment results and market outlook. Government operations revenue was down 1%, and Adjusted EBITDA was down 5% in the quarter, slightly ahead of our expectations. In naval propulsion, with 2 new pricing agreements in place, our teams are focused on long lead materials, operational excellence, and delivery. During the quarter, we shipped 2 large steam generators for CVN-81, a Ford-class aircraft carrier, from our Mount Vernon, Indiana, facility, highlighting our rhythm delivery for naval reactors. We recently completed construction of the Centrifuge Manufacturing Development Facility and are designing a new high-purity depleted uranium manufacturing facility, both to support the NNSA. we recently completed construction of the centrifuge manufacturing development facility and are designing a new high-purity depleted uranium manufacturing facility both to support the nnsa Earlier this month, we opened the BWXT Digital Center in Melbourne, Florida, which is our hub for digital transformation and AI initiatives across the organization. earlier this month we opened the bwxt digital center in melbourne florida which is our hub for digital transformation and ai initiatives across the organization Turning to segment results and market outlook. turning to segment results and market outlook Government operations revenue was down 1%, and Adjusted EBITDA was down 5% in the quarter, slightly ahead of our expectations. government operations revenue was down 1% and adjusted ebitda was down 5% in the quarter slightly ahead of our expectations In naval propulsion, with 2 new pricing agreements in place, our teams are focused on long lead materials, operational excellence, and delivery. in naval propulsion with 2 new pricing agreements in place our teams are focused on long lead materials operational excellence and delivery During the quarter, we shipped 2 large steam generators for CVN-81, a Ford-class aircraft carrier, from our Mount Vernon, Indiana, facility, highlighting our rhythm delivery for naval reactors. during the quarter we shipped 2 large steam generators for cvn-81 a ford-class aircraft carrier from our mount vernon indiana facility highlighting our rhythm delivery for naval reactors The Mount Vernon facility sits on the Ohio River and has a 1,000 metric ton crane capacity, suitable for lifting the largest nuclear reactor components onto barges directly from the site. Accordingly, we are considering expansion there to supply the U.S. commercial nuclear market. In technical services, a team led by BWXT, including Kinectrics, assumed the management and operations contract for the Canadian Nuclear Laboratories, our first international TSG project. We are tracking several other contract opportunities within the DOE complex, as well as in new domains. In fact, BWXT was an awardee on the Missile Defense Agency's $151 billion shield contract, or Golden Dome, which positions us to compete for infrastructure support and engineering and manufacturing technology development on this strategically important national security program. The Mount Vernon facility sits on the Ohio River and has a 1,000 metric ton crane capacity, suitable for lifting the largest nuclear reactor components onto barges directly from the site. the mount vernon facility sits on the ohio river and has a 1,000 metric ton crane capacity suitable for lifting the largest nuclear reactor components onto barges directly from the site Accordingly, we are considering expansion there to supply the U.S. commercial nuclear market. accordingly we are considering expansion there to supply the u.s commercial nuclear market In technical services, a team led by BWXT, including Kinectrics, assumed the management and operations contract for the Canadian Nuclear Laboratories, our first international TSG project. in technical services a team led by bwxt including kinectrics assumed the management and operations contract for the canadian nuclear laboratories our first international tsg project We are tracking several other contract opportunities within the DOE complex, as well as in new domains. we are tracking several other contract opportunities within the doe complex as well as in new domains In fact, BWXT was an awardee on the Missile Defense Agency's $151 billion shield contract, or Golden Dome, which positions us to compete for infrastructure support and engineering and manufacturing technology development on this strategically important national security program. in fact bwxt was an awardee on the missile defense agency's $151 billion shield contract or golden dome which positions us to compete for infrastructure support and engineering and manufacturing technology development on this strategically important national security program In microreactor and advanced nuclear fuels, we delivered the first core of TRISO fuel for Project Pele to Idaho National Lab in November. We are also manufacturing TRISO for Antares, which aims to achieve reactor criticality by July 4th of this year, in line with the administration's nuclear executive orders. While others are planning to produce and manufacture advanced nuclear fuel, we are delivering today. Further, in the space domain, we continue to develop the technology required for nuclear thermal propulsion with NASA and are seeing specific opportunities around fission surface power. Lastly, in special materials, our team stood up the Centrifuge Manufacturing Development Facility in just 7 months. For the Defense Fuels Program with NNSA, reestablishing a domestic and uranium enrichment capability for national security purposes. We are also preparing for the construction of a new facility in Jonesborough, Tennessee, for high-purity depleted uranium production. In microreactor and advanced nuclear fuels, we delivered the first core of TRISO fuel for Project Pele to Idaho National Lab in November. in microreactor and advanced nuclear fuels we delivered the first core of triso fuel for project pele to idaho national lab in november We are also manufacturing TRISO for Antares, which aims to achieve reactor criticality by July 4th of this year, in line with the administration's nuclear executive orders. we are also manufacturing triso for antares which aims to achieve reactor criticality by july 4th of this year in line with the administration's nuclear executive orders While others are planning to produce and manufacture advanced nuclear fuel, we are delivering today. while others are planning to produce and manufacture advanced nuclear fuel we are delivering today Further, in the space domain, we continue to develop the technology required for nuclear thermal propulsion with NASA and are seeing specific opportunities around fission surface power. further in the space domain we continue to develop the technology required for nuclear thermal propulsion with nasa and are seeing specific opportunities around fission surface power Lastly, in special materials, our team stood up the Centrifuge Manufacturing Development Facility in just 7 months. lastly in special materials our team stood up the centrifuge manufacturing development facility in just 7 months For the Defense Fuels Program with NNSA, reestablishing a domestic and uranium enrichment capability for national security purposes. for the defense fuels program with nnsa reestablishing a domestic and uranium enrichment capability for national security purposes We are also preparing for the construction of a new facility in Jonesborough, Tennessee, for high-purity depleted uranium production. we are also preparing for the construction of a new facility in jonesborough tennessee for high-purity depleted uranium production These programs support our robust revenue growth outlook in 2026 and are highly strategic for the future of our special materials portfolio. Turning now to commercial operations. We reported impressive organic revenue growth of 31% in the quarter and total revenue growth of 95%, strong growth in commercial nuclear power and medical, and sales from Kinectrics. Backlog into 2025 at $1.7 billion, up 85% compared to last year and up 16% sequentially, driven by equipment for CANDU refurbishments in Canada and other international markets, and design awards for SMR components to various reactor OEMs. This backlog growth, coupled with robust market demand, supports our expectations for low double-digit organic revenue growth in the segment in 2026. These programs support our robust revenue growth outlook in 2026 and are highly strategic for the future of our special materials portfolio. these programs support our robust revenue growth outlook in 2026 and are highly strategic for the future of our special materials portfolio Turning now to commercial operations. turning now to commercial operations We reported impressive organic revenue growth of 31% in the quarter and total revenue growth of 95%, strong growth in commercial nuclear power and medical, and sales from Kinectrics. we reported impressive organic revenue growth of 31% in the quarter and total revenue growth of 95% strong growth in commercial nuclear power and medical and sales from kinectrics Backlog into 2025 at $1.7 billion, up 85% compared to last year and up 16% sequentially, driven by equipment for CANDU refurbishments in Canada and other international markets, and design awards for SMR components to various reactor OEMs. backlog into 2025 at $1.7 billion up 85% compared to last year and up 16% sequentially driven by equipment for candu refurbishments in canada and other international markets and design awards for smr components to various reactor oems This backlog growth, coupled with robust market demand, supports our expectations for low double-digit organic revenue growth in the segment in 2026. this backlog growth coupled with robust market demand supports our expectations for low double-digit organic revenue growth in the segment in 2026 BWXT Medical reached a milestone of slightly more than $100 million of annual revenue, up about 20% from last year, with double-digit growth in diagnostic isotopes, a meaningful increase in actinium sales, and steady growth in TheraSphere. We expect similar growth in 2026 as these factors continue to drive the business. We continue to make measured investments in our medical portfolio as we work through the industrialization of our Tech 99 product, explore new modalities for producing Actinium-225, and around other therapeutic isotopes, such as Lead-212. Turning now to commercial nuclear power, demand is strong, and our opportunity set is expanding. BWXT Medical reached a milestone of slightly more than $100 million of annual revenue, up about 20% from last year, with double-digit growth in diagnostic isotopes, a meaningful increase in actinium sales, and steady growth in TheraSphere. bwxt medical reached a milestone of slightly more than $100 million of annual revenue up about 20% from last year with double-digit growth in diagnostic isotopes a meaningful increase in actinium sales and steady growth in therasphere We expect similar growth in 2026 as these factors continue to drive the business. we expect similar growth in 2026 as these factors continue to drive the business We continue to make measured investments in our medical portfolio as we work through the industrialization of our Tech 99 product, explore new modalities for producing Actinium-225, and around other therapeutic isotopes, such as Lead-212. we continue to make measured investments in our medical portfolio as we work through the industrialization of our tech 99 product explore new modalities for producing actinium-225 and around other therapeutic isotopes such as lead-212 Turning now to commercial nuclear power, demand is strong, and our opportunity set is expanding. turning now to commercial nuclear power demand is strong and our opportunity set is expanding Commercial nuclear power book-to-bill was over two in the quarter, holds your CANDU aftermarket services and components in Canada, Europe, and Asia, a new long-term CANDU fuel contract and design and component manufacturer contracts with several SMR technology providers, underscoring our role as a super merchant supplier for critical nuclear technologies. Additionally, in December, a consortium of BWXT, Laurentis Energy Partners and its subsidiary, Canadian Nuclear Partners, was selected to provide owners engineer services for 2 proposed AP1000 nuclear reactors at the Kozloduy site in Bulgaria. This is BWXT's first meaningful AP1000 award, leveraging our large nuclear project experience and Kinectrics' depth in licensing, regulatory support, and engineering. We are actively bidding component packages for multiple AP1000 projects and expect additional awards this year. With that, I will now turn the call over to Mike. Commercial nuclear power book-to-bill was over two in the quarter, holds your CANDU aftermarket services and components in Canada, Europe, and Asia, a new long-term CANDU fuel contract and design and component manufacturer contracts with several SMR technology providers, underscoring our role as a super merchant supplier for critical nuclear technologies. commercial nuclear power book-to-bill was over two in the quarter holds your candu aftermarket services and components in canada europe and asia a new long-term candu fuel contract and design and component manufacturer contracts with several smr technology providers underscoring our role as a super merchant supplier for critical nuclear technologies Additionally, in December, a consortium of BWXT, Laurentis Energy Partners and its subsidiary, Canadian Nuclear Partners, was selected to provide owners engineer services for 2 proposed AP1000 nuclear reactors at the Kozloduy site in Bulgaria. additionally in december a consortium of bwxt laurentis energy partners and its subsidiary canadian nuclear partners was selected to provide owners engineer services for 2 proposed ap1000 nuclear reactors at the kozloduy site in bulgaria This is BWXT's first meaningful AP1000 award, leveraging our large nuclear project experience and Kinectrics' depth in licensing, regulatory support, and engineering. this is bwxt's first meaningful ap1000 award leveraging our large nuclear project experience and kinectrics' depth in licensing regulatory support and engineering We are actively bidding component packages for multiple AP1000 projects and expect additional awards this year. we are actively bidding component packages for multiple ap1000 projects and expect additional awards this year With that, I will now turn the call over to Mike. with that i will now turn the call over to mike

Speaker 7: Thanks, Rex. Good evening, everyone. I'll begin with total company financial highlights on slide four of the earnings presentation. Fourth quarter revenue was $886 million, up 19% year-over-year, as strong growth in commercial operations was partially offset by a modest and expected decline in government operations. Organic revenue was up 4%. Adjusted EBITDA was $148 million, up 13% year-over-year, attributable to robust double-digit growth in commercial operations and lower corporate expense, which were partially offset by lower government operations. Adjusted earnings per share were $1.08, up 17%, due to strong operating performance and a higher contribution from non-operating items of approximately $0.05. Thanks, Rex. thanks rex Good evening, everyone. good evening everyone I'll begin with total company financial highlights on slide four of the earnings presentation. i'll begin with total company financial highlights on slide four of the earnings presentation Fourth quarter revenue was $886 million, up 19% year-over-year, as strong growth in commercial operations was partially offset by a modest and expected decline in government operations. fourth quarter revenue was $886 million up 19% year-over-year as strong growth in commercial operations was partially offset by a modest and expected decline in government operations Organic revenue was up 4%. organic revenue was up 4% Adjusted EBITDA was $148 million, up 13% year-over-year, attributable to robust double-digit growth in commercial operations and lower corporate expense, which were partially offset by lower government operations. adjusted ebitda was $148 million up 13% year-over-year attributable to robust double-digit growth in commercial operations and lower corporate expense which were partially offset by lower government operations Adjusted earnings per share were $1.08, up 17%, due to strong operating performance and a higher contribution from non-operating items of approximately $0.05. adjusted earnings per share were $1.08 up 17% due to strong operating performance and a higher contribution from non-operating items of approximately $0.05 Our adjusted effective tax rate in the quarter was 19.5%, which was below our full year tax rate of 20.4% due to timing of R&D tax credits. In 2026, we expect our tax rate to be slightly higher at approximately 22%, as growth in our commercial power and Kinectrics businesses will result in a greater percentage of international earnings. Fourth quarter free cash flow was $57 million, and full year free cash flow was $295 million, up 16% compared to last year, inclusive of 17% operating cash flow growth. Capital expenditures in 2025 were $185 million, 5.8% of sales. Our adjusted effective tax rate in the quarter was 19.5%, which was below our full year tax rate of 20.4% due to timing of R&D tax credits. our adjusted effective tax rate in the quarter was 19.5% which was below our full year tax rate of 20.4% due to timing of r&d tax credits In 2026, we expect our tax rate to be slightly higher at approximately 22%, as growth in our commercial power and Kinectrics businesses will result in a greater percentage of international earnings. in 2026 we expect our tax rate to be slightly higher at approximately 22% as growth in our commercial power and kinectrics businesses will result in a greater percentage of international earnings Fourth quarter free cash flow was $57 million, and full year free cash flow was $295 million, up 16% compared to last year, inclusive of 17% operating cash flow growth. fourth quarter free cash flow was $57 million and full year free cash flow was $295 million up 16% compared to last year inclusive of 17% operating cash flow growth Capital expenditures in 2025 were $185 million, 5.8% of sales. capital expenditures in 2025 were $185 million 5.8% of sales In 2026, we expect CapEx to be about 6% of sales as we continue to invest in the business to meet our commitments with our government customers and to support the growing demand in our commercial markets. During the quarter, we also completed a $1.25 billion convertible debt offering with a 0% coupon. In connection with the offering, we entered into a cap call transaction, which essentially increased the conversion price to over $396. Funds from the transaction were used to repay balances on our credit facility and term loan, which we in turn renegotiated with more favorable terms and increased capacity. This was a highly opportunistic transaction for BWXT. In 2026, we expect CapEx to be about 6% of sales as we continue to invest in the business to meet our commitments with our government customers and to support the growing demand in our commercial markets. in 2026 we expect capex to be about 6% of sales as we continue to invest in the business to meet our commitments with our government customers and to support the growing demand in our commercial markets During the quarter, we also completed a $1.25 billion convertible debt offering with a 0% coupon. during the quarter we also completed a $1.25 billion convertible debt offering with a 0% coupon In connection with the offering, we entered into a cap call transaction, which essentially increased the conversion price to over $396. in connection with the offering we entered into a cap call transaction which essentially increased the conversion price to over $396 Funds from the transaction were used to repay balances on our credit facility and term loan, which we in turn renegotiated with more favorable terms and increased capacity. funds from the transaction were used to repay balances on our credit facility and term loan which we in turn renegotiated with more favorable terms and increased capacity This was a highly opportunistic transaction for BWXT. this was a highly opportunistic transaction for bwxt We reduced our cost of debt, lowered our interest expense, enhanced our financial flexibility, increased our liquidity, which stood at $1.7 billion at the end of the year. Moving to the segment results on slide 6. In government operations, fourth quarter revenue was down 1% as expected, with growth in special materials and contribution from AOT being offset by lower microreactor volumes and long lead material procurement for naval propulsion equipment, the latter of which was a benefit to our results in the first three quarters of the year. Adjusted EBITDA in the segment was $111 million, resulting in an Adjusted EBITDA margin of 18.8%. Our quarterly Adjusted EBITDA margin was slightly lower than the full year result of 20.4% due to mix, as newer projects in the segment began to ramp. We reduced our cost of debt, lowered our interest expense, enhanced our financial flexibility, increased our liquidity, which stood at $1.7 billion at the end of the year. we reduced our cost of debt lowered our interest expense enhanced our financial flexibility increased our liquidity which stood at $1.7 billion at the end of the year Moving to the segment results on slide 6. moving to the segment results on slide 6 In government operations, fourth quarter revenue was down 1% as expected, with growth in special materials and contribution from AOT being offset by lower microreactor volumes and long lead material procurement for naval propulsion equipment, the latter of which was a benefit to our results in the first three quarters of the year. in government operations fourth quarter revenue was down 1% as expected with growth in special materials and contribution from aot being offset by lower microreactor volumes and long lead material procurement for naval propulsion equipment the latter of which was a benefit to our results in the first three quarters of the year Adjusted EBITDA in the segment was $111 million, resulting in an Adjusted EBITDA margin of 18.8%. adjusted ebitda in the segment was $111 million resulting in an adjusted ebitda margin of 18.8% Our quarterly Adjusted EBITDA margin was slightly lower than the full year result of 20.4% due to mix, as newer projects in the segment began to ramp. our quarterly adjusted ebitda margin was slightly lower than the full year result of 20.4% due to mix as newer projects in the segment began to ramp Turning to commercial operations, revenue was up a robust 95%, driven by 31% organic growth, with strong growth in both commercial power and medical, and contribution from Kinectrics. This reflects both accelerating organic momentum and the strategic expansion of our commercial capabilities. Adjusted EBITDA in the segment was $44 million, up 87% from last year. Adjusted EBITDA margin was 14.9%, a notable improvement from last quarter. In 2026, we expect the commercial operations segment Adjusted EBITDA margin to increase by roughly 100 basis points, as higher revenue and more normalized mix is partially offset by continued growth investment as we scale the business for the future. Beyond 2026, we expect growth investment to be less of a margin headwind, as continued investments are offset by additional revenue growth. Turning to commercial operations, revenue was up a robust 95%, driven by 31% organic growth, with strong growth in both commercial power and medical, and contribution from Kinectrics. turning to commercial operations revenue was up a robust 95% driven by 31% organic growth with strong growth in both commercial power and medical and contribution from kinectrics This reflects both accelerating organic momentum and the strategic expansion of our commercial capabilities. this reflects both accelerating organic momentum and the strategic expansion of our commercial capabilities Adjusted EBITDA in the segment was $44 million, up 87% from last year. adjusted ebitda in the segment was $44 million up 87% from last year Adjusted EBITDA margin was 14.9%, a notable improvement from last quarter. adjusted ebitda margin was 14.9% a notable improvement from last quarter In 2026, we expect the commercial operations segment Adjusted EBITDA margin to increase by roughly 100 basis points, as higher revenue and more normalized mix is partially offset by continued growth investment as we scale the business for the future. in 2026 we expect the commercial operations segment adjusted ebitda margin to increase by roughly 100 basis points as higher revenue and more normalized mix is partially offset by continued growth investment as we scale the business for the future Beyond 2026, we expect growth investment to be less of a margin headwind, as continued investments are offset by additional revenue growth. beyond 2026 we expect growth investment to be less of a margin headwind as continued investments are offset by additional revenue growth Turning to our 2026 guidance on slide 10 and 11 of the earnings presentation. From an operational standpoint, our guidance is largely in line with the preliminary outlook we provided in November. We expect revenue of approximately $3.75 billion, up high-teens compared to 2025. In government operations, we expect approximately low-to-mid-teens growth, with over half coming from the Defense Fuels and HPDU contracts. In commercial operations, we expect approximately 25% growth, driven by low-double-digit growth in commercial power, high-teens medical growth, and a full year of contribution from Kinectrics. For Adjusted EBITDA, we are guiding $645 million-$660 million, up low-to-mid-teens compared to 2025. Turning to our 2026 guidance on slide 10 and 11 of the earnings presentation. turning to our 2026 guidance on slide 10 and 11 of the earnings presentation From an operational standpoint, our guidance is largely in line with the preliminary outlook we provided in November. from an operational standpoint our guidance is largely in line with the preliminary outlook we provided in november We expect revenue of approximately $3.75 billion, up high-teens compared to 2025. we expect revenue of approximately $3.75 billion up high-teens compared to 2025 In government operations, we expect approximately low-to-mid-teens growth, with over half coming from the Defense Fuels and HPDU contracts. in government operations we expect approximately low-to-mid-teens growth with over half coming from the defense fuels and hpdu contracts In commercial operations, we expect approximately 25% growth, driven by low-double-digit growth in commercial power, high-teens medical growth, and a full year of contribution from Kinectrics. in commercial operations we expect approximately 25% growth driven by low-double-digit growth in commercial power high-teens medical growth and a full year of contribution from kinectrics For Adjusted EBITDA, we are guiding $645 million-$660 million, up low-to-mid-teens compared to 2025. for adjusted ebitda we are guiding $645 million-$660 million up low-to-mid-teens compared to 2025 In government operations, we expect margin to be slightly lower, given the significant revenue contribution from new programs, which begins at a lower initial profit recognition and expands over time as execution milestones are met and contract risk is reduced. In commercial operations, we expect margin to trend back toward historical levels, as I previously discussed. Regarding the cadence of operating earnings, we anticipate our results will be slightly more back-half weighted than usual, with about 55% of full-year EBITDA anticipated in the second half. This will largely be reflected in first quarter results, with a return to more normal seasonality in second quarter. In the first quarter, while we expect solid year-over-year organic revenue growth, EBITDA is likely to be flat to slightly higher in both segments due to seasonality, short-term impacts of mix, and ramping of new programs. In government operations, we expect margin to be slightly lower, given the significant revenue contribution from new programs, which begins at a lower initial profit recognition and expands over time as execution milestones are met and contract risk is reduced. in government operations we expect margin to be slightly lower given the significant revenue contribution from new programs which begins at a lower initial profit recognition and expands over time as execution milestones are met and contract risk is reduced In commercial operations, we expect margin to trend back toward historical levels, as I previously discussed. in commercial operations we expect margin to trend back toward historical levels as i previously discussed Regarding the cadence of operating earnings, we anticipate our results will be slightly more back-half weighted than usual, with about 55% of full-year EBITDA anticipated in the second half. regarding the cadence of operating earnings we anticipate our results will be slightly more back-half weighted than usual with about 55% of full-year ebitda anticipated in the second half This will largely be reflected in first quarter results, with a return to more normal seasonality in second quarter. this will largely be reflected in first quarter results with a return to more normal seasonality in second quarter In the first quarter, while we expect solid year-over-year organic revenue growth, EBITDA is likely to be flat to slightly higher in both segments due to seasonality, short-term impacts of mix, and ramping of new programs. in the first quarter while we expect solid year-over-year organic revenue growth ebitda is likely to be flat to slightly higher in both segments due to seasonality short-term impacts of mix and ramping of new programs In government operations, this will likely translate to first quarter EBITDA being roughly flat year-over-year, yielding a margin that is slightly below the full year guidance rate. In commercial operations, margins are expected to start the year well below our full year guidance before improving sequentially each quarter throughout the remainder of the year, reflecting program timing and mix. These assumptions lead to non-GAAP earnings per share guidance of $4.55-$4.70, up mid to high teens, driven largely by growth in both segments, with a modest contribution from non-operational items as lower interest expense is partially offset by a slightly higher tax rate and share count and lower pension and other income. In government operations, this will likely translate to first quarter EBITDA being roughly flat year-over-year, yielding a margin that is slightly below the full year guidance rate. in government operations this will likely translate to first quarter ebitda being roughly flat year-over-year yielding a margin that is slightly below the full year guidance rate In commercial operations, margins are expected to start the year well below our full year guidance before improving sequentially each quarter throughout the remainder of the year, reflecting program timing and mix. in commercial operations margins are expected to start the year well below our full year guidance before improving sequentially each quarter throughout the remainder of the year reflecting program timing and mix These assumptions lead to non-GAAP earnings per share guidance of $4.55-$4.70, up mid to high teens, driven largely by growth in both segments, with a modest contribution from non-operational items as lower interest expense is partially offset by a slightly higher tax rate and share count and lower pension and other income. these assumptions lead to non-gaap earnings per share guidance of $4.55-$4.70 up mid to high teens driven largely by growth in both segments with a modest contribution from non-operational items as lower interest expense is partially offset by a slightly higher tax rate and share count and lower pension and other income From a quarterly perspective, while we anticipate earnings per share to follow a similar pattern to our operating earnings, with first quarter EPS relatively flat compared to last year, we are highly confident in delivering our full-year earnings growth outlook. Finally, we expect free cash flow of $305 million-$320 million, inclusive of low to mid-teens operating cash flow growth, in line with our Adjusted EBITDA growth outlook. Importantly, this level of cash generation supports both continued reinvestment and long-term shareholder value creation. Overall, we see 2026 as another year of meaningful operational growth for BWXT. We've strengthened our balance sheet, expanded our commercial platform, and positioned the company for continued margin improvement and cash generation. Our focus remains on disciplined execution, prudent investment, and long-term shareholder value creation. With that, I will turn it back to Rex for closing remarks. From a quarterly perspective, while we anticipate earnings per share to follow a similar pattern to our operating earnings, with first quarter EPS relatively flat compared to last year, we are highly confident in delivering our full-year earnings growth outlook. from a quarterly perspective while we anticipate earnings per share to follow a similar pattern to our operating earnings with first quarter eps relatively flat compared to last year we are highly confident in delivering our full-year earnings growth outlook Finally, we expect free cash flow of $305 million-$320 million, inclusive of low to mid-teens operating cash flow growth, in line with our Adjusted EBITDA growth outlook. finally we expect free cash flow of $305 million-$320 million inclusive of low to mid-teens operating cash flow growth in line with our adjusted ebitda growth outlook Importantly, this level of cash generation supports both continued reinvestment and long-term shareholder value creation. importantly this level of cash generation supports both continued reinvestment and long-term shareholder value creation Overall, we see 2026 as another year of meaningful operational growth for BWXT. overall we see 2026 as another year of meaningful operational growth for bwxt We've strengthened our balance sheet, expanded our commercial platform, and positioned the company for continued margin improvement and cash generation. we've strengthened our balance sheet expanded our commercial platform and positioned the company for continued margin improvement and cash generation Our focus remains on disciplined execution, prudent investment, and long-term shareholder value creation. our focus remains on disciplined execution prudent investment and long-term shareholder value creation With that, I will turn it back to Rex for closing remarks. with that i will turn it back to rex for closing remarks

Speaker 10: Thanks, Mike. 2025 was a monumental year for BWXT. We sit at the intersection of the national security and commercial nuclear power markets in a market-leading position with unmatched scale, experiential qualifications, and regulatory credentials. It's an exciting place to be, and the outlook is bright. This position demands that we execute to drive quality, earnings growth, and shareholder value. Our priorities are executing against our robust backlog, process optimization, new technology adoption throughout the organization, and on disciplined growth investments, both organic and inorganic. With that, we look forward to taking your questions. Thanks, Mike. 2025 was a monumental year for BWXT. thanks mike 2025 was a monumental year for bwxt We sit at the intersection of the national security and commercial nuclear power markets in a market-leading position with unmatched scale, experiential qualifications, and regulatory credentials. we sit at the intersection of the national security and commercial nuclear power markets in a market-leading position with unmatched scale experiential qualifications and regulatory credentials It's an exciting place to be, and the outlook is bright. it's an exciting place to be and the outlook is bright This position demands that we execute to drive quality, earnings growth, and shareholder value. this position demands that we execute to drive quality earnings growth and shareholder value Our priorities are executing against our robust backlog, process optimization, new technology adoption throughout the organization, and on disciplined growth investments, both organic and inorganic. our priorities are executing against our robust backlog process optimization new technology adoption throughout the organization and on disciplined growth investments both organic and inorganic With that, we look forward to taking your questions. with that we look forward to taking your questions

Speaker 9: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via speakerphone in your device, please pick up your handset to ensure that your phone is not on mute when asking your question. Again, press star one to join the queue. We do request for today's session that you please limit to one question and one follow-up question only. Thank you. Our first question comes from the line of Scott Deuschle with Deutsche Bank. Your line is open. Thank you. thank you We will now begin the question and answer session. we will now begin the question and answer session If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. if you have dialed in and would like to ask a question please press star one on your telephone keypad to raise your hand and join the queue If you would like to withdraw your question, simply press star one again. if you would like to withdraw your question simply press star one again If you are called upon to ask your question and are listening via speakerphone in your device, please pick up your handset to ensure that your phone is not on mute when asking your question. if you are called upon to ask your question and are listening via speakerphone in your device please pick up your handset to ensure that your phone is not on mute when asking your question Again, press star one to join the queue. again press star one to join the queue We do request for today's session that you please limit to one question and one follow-up question only. we do request for today's session that you please limit to one question and one follow-up question only Thank you. thank you Our first question comes from the line of Scott Deuschle with Deutsche Bank. our first question comes from the line of scott deuschle with deutsche bank Your line is open. your line is open

Speaker 12: Hi, good evening. Mike, should we expect government operations margins to trough in 2026 on these mixed headwinds, or could there be incremental mix pressure in 2027 that we should be mindful of? Hi, good evening. hi good evening Mike, should we expect government operations margins to trough in 2026 on these mixed headwinds, or could there be incremental mix pressure in 2027 that we should be mindful of? mike should we expect government operations margins to trough in 2026 on these mixed headwinds or could there be incremental mix pressure in 2027 that we should be mindful of

Speaker 7: Thanks, Scott. I, no, I don't see any real incremental pressure as we look at 2027. I, I think as I've mentioned in the last call and, and maybe over the last couple of earnings calls, we feel really good about the current pricing agreement. If you look at our core naval propulsion business, we're actually performing really well. Efficiency and utilization are up at our best sites and our largest sites, and so we see a lot of opportunity as we move through the future. I think what you're seeing in 2026 is a little bit of this mixed pressure. As we discussed, half of the growth is coming from these new programs where we're making infrastructure investments, and so you're seeing a little bit of a decline there, but we would expect a rebound in 2027. Thanks, Scott. thanks scott I, no, I don't see any real incremental pressure as we look at 2027. i no i don't see any real incremental pressure as we look at 2027 I, I think as I've mentioned in the last call and, and maybe over the last couple of earnings calls, we feel really good about the current pricing agreement. i i think as i've mentioned in the last call and and maybe over the last couple of earnings calls we feel really good about the current pricing agreement If you look at our core naval propulsion business, we're actually performing really well. if you look at our core naval propulsion business we're actually performing really well Efficiency and utilization are up at our best sites and our largest sites, and so we see a lot of opportunity as we move through the future. efficiency and utilization are up at our best sites and our largest sites and so we see a lot of opportunity as we move through the future I think what you're seeing in 2026 is a little bit of this mixed pressure. i think what you're seeing in 2026 is a little bit of this mixed pressure As we discussed, half of the growth is coming from these new programs where we're making infrastructure investments, and so you're seeing a little bit of a decline there, but we would expect a rebound in 2027. as we discussed half of the growth is coming from these new programs where we're making infrastructure investments and so you're seeing a little bit of a decline there but we would expect a rebound in 2027

Speaker 12: Okay. Rex, can you talk about how BWXT is using AI internally today? Are there any business functions where you're particularly excited about the potential impact of AI over the medium term, whether that be from cost, synergy, opportunity, or something else? Thank you. Okay. okay Rex, can you talk about how BWXT is using AI internally today? rex can you talk about how bwxt is using ai internally today Are there any business functions where you're particularly excited about the potential impact of AI over the medium term, whether that be from cost, synergy, opportunity, or something else? are there any business functions where you're particularly excited about the potential impact of ai over the medium term whether that be from cost synergy opportunity or something else Thank you. thank you

Speaker 10: Yeah, sure, Scott. I think, thanks for the question. I think there's an outside story for AI with BWXT, and there's an inside story. I think you obviously know the outside story, which is there's an expectation that nuclear power will power the data centers of the future, and I think that's a reasonable expectation, but that's all in the windshield for us. Certainly, that's not part of the current business mix. The inside story shapes up like this: I think there are, I think of it in kind of three phases. The first phase was BWXT using machine learning to improve certain in-internal functions, particularly manufacturing processes. We, for example, put hyperspectral sensors on complex weld processes and used a machine learning algorithm to figure out when those things were going out of spec, which saved us a ton of expensive rework. Yeah, sure, Scott. yeah sure scott I think, thanks for the question. i think thanks for the question I think there's an outside story for AI with BWXT, and there's an inside story. i think there's an outside story for ai with bwxt and there's an inside story I think you obviously know the outside story, which is there's an expectation that nuclear power will power the data centers of the future, and I think that's a reasonable expectation, but that's all in the windshield for us. i think you obviously know the outside story which is there's an expectation that nuclear power will power the data centers of the future and i think that's a reasonable expectation but that's all in the windshield for us Certainly, that's not part of the current business mix. certainly that's not part of the current business mix The inside story shapes up like this: I think there are, I think of it in kind of three phases. the inside story shapes up like this i think there are i think of it in kind of three phases The first phase was BWXT using machine learning to improve certain in-internal functions, particularly manufacturing processes. the first phase was bwxt using machine learning to improve certain in-internal functions particularly manufacturing processes We, for example, put hyperspectral sensors on complex weld processes and used a machine learning algorithm to figure out when those things were going out of spec, which saved us a ton of expensive rework. we for example put hyperspectral sensors on complex weld processes and used a machine learning algorithm to figure out when those things were going out of spec which saved us a ton of expensive rework We did it, and there are other examples I can cite, so I'd call that phase one. Phase two is, you know, with re-release of large language models, we're figuring out ways to use those in our business to improve functional efficiencies and the like. In this phase of it, we're basically democratizing access to the tools, I mean tools like Databricks and ChatGPT and the like. The third phase is going to be factory automation. That's kind of our burning platform in the sense that we've got a lot of traditional plants that need to be automated and digitized. In the future, it's our expectation to have fully digitized quality records, automated inspection, digital twin representations of every component that we manufacture. We did it, and there are other examples I can cite, so I'd call that phase one. we did it and there are other examples i can cite so i'd call that phase one Phase two is, you know, with re-release of large language models, we're figuring out ways to use those in our business to improve functional efficiencies and the like. phase two is you know with re-release of large language models we're figuring out ways to use those in our business to improve functional efficiencies and the like In this phase of it, we're basically democratizing access to the tools, I mean tools like Databricks and ChatGPT and the like. in this phase of it we're basically democratizing access to the tools i mean tools like databricks and chatgpt and the like The third phase is going to be factory automation. the third phase is going to be factory automation That's kind of our burning platform in the sense that we've got a lot of traditional plants that need to be automated and digitized. that's kind of our burning platform in the sense that we've got a lot of traditional plants that need to be automated and digitized In the future, it's our expectation to have fully digitized quality records, automated inspection, digital twin representations of every component that we manufacture. in the future it's our expectation to have fully digitized quality records automated inspection digital twin representations of every component that we manufacture That's the phase that we're going into right now, and we're quite excited about that. That's the phase that we're going into right now, and we're quite excited about that. that's the phase that we're going into right now and we're quite excited about that

Speaker 12: That's really interesting. For Phase III, do you see any limitations from, the security clearances required, things like that, that would prohibit your ability to deploy those types of systems, particularly for government operations? Or do you, do you think you would have the, the ability to use things like digital twins and, you know, some of those classified areas as well? That's really interesting. that's really interesting For Phase III, do you see any limitations from, the security clearances required, things like that, that would prohibit your ability to deploy those types of systems, particularly for government operations? for phase iii do you see any limitations from the security clearances required things like that that would prohibit your ability to deploy those types of systems particularly for government operations Or do you, do you think you would have the, the ability to use things like digital twins and, you know, some of those classified areas as well? or do you do you think you would have the the ability to use things like digital twins and you know some of those classified areas as well

Speaker 10: I'd say not much, Scott. I mean, certainly we have to be concerned about using Wi-Fi and, and Bluetooth kind of systems in a classified manufacturing environment. There are things that we will have to work around, but I think we will work around them with support from our customers. I'd say not much, Scott. i'd say not much scott I mean, certainly we have to be concerned about using Wi-Fi and, and Bluetooth kind of systems in a classified manufacturing environment. i mean certainly we have to be concerned about using wi-fi and and bluetooth kind of systems in a classified manufacturing environment There are things that we will have to work around, but I think we will work around them with support from our customers. there are things that we will have to work around but i think we will work around them with support from our customers

Speaker 12: Okay, thank you. Okay, thank you. okay thank you

Speaker 10: Thank you. Thank you. thank you

Speaker 9: Our next question comes from the line of Matt Akers with BNP Paribas. Your line is open. Our next question comes from the line of Matt Akers with BNP Paribas. our next question comes from the line of matt akers with bnp paribas Your line is open. your line is open

Speaker 6: Yeah. Hey, guys. Good afternoon. Thanks for taking my question. I, I wanted to ask, I, I think some of the commentary from the shipbuilder this quarter was, was relatively positive in terms of just some of the supply chain bottlenecks they, they had seen maybe starting to get a little better. Just curious if you're seeing any of that flow through to you in terms of maybe more, you know, pulling demand forward or anything like that, or if you're, you're seeing anything along those lines. Yeah. yeah Hey, guys. hey guys Good afternoon. good afternoon Thanks for taking my question. thanks for taking my question I, I wanted to ask, I, I think some of the commentary from the shipbuilder this quarter was, was relatively positive in terms of just some of the supply chain bottlenecks they, they had seen maybe starting to get a little better. i i wanted to ask i i think some of the commentary from the shipbuilder this quarter was was relatively positive in terms of just some of the supply chain bottlenecks they they had seen maybe starting to get a little better Just curious if you're seeing any of that flow through to you in terms of maybe more, you know, pulling demand forward or anything like that, or if you're, you're seeing anything along those lines. just curious if you're seeing any of that flow through to you in terms of maybe more you know pulling demand forward or anything like that or if you're you're seeing anything along those lines

Speaker 10: Yeah, we've seen that encouraging news, too. I, I'd say, our reaction to it is that from the very beginning, I think we've held the view, and I believe that the Navy and, and the government held the view that instead of slowing down the supply chain, what you got to do is fix the bottleneck, and so I think we're seeing that now. I think we're seeing pretty encouraging progress at the shipyards. I think you'll know, and we announced this a couple of quarters ago at least, that, that Admiral McCoy, who'd been running our government operations business, was seconded into the Department of Defense to support the Navy for that specific purpose, the express purpose of improving throughput at the shipyards. That's what the-- that's what the certainly what the nation needs to do. That's what the Navy needs to have. Yeah, we've seen that encouraging news, too. yeah we've seen that encouraging news too I, I'd say, our reaction to it is that from the very beginning, I think we've held the view, and I believe that the Navy and, and the government held the view that instead of slowing down the supply chain, what you got to do is fix the bottleneck, and so I think we're seeing that now. i i'd say our reaction to it is that from the very beginning i think we've held the view and i believe that the navy and and the government held the view that instead of slowing down the supply chain what you got to do is fix the bottleneck and so i think we're seeing that now I think we're seeing pretty encouraging progress at the shipyards. i think we're seeing pretty encouraging progress at the shipyards I think you'll know, and we announced this a couple of quarters ago at least, that, that Admiral McCoy, who'd been running our government operations business, was seconded into the Department of Defense to support the Navy for that specific purpose, the express purpose of improving throughput at the shipyards. i think you'll know and we announced this a couple of quarters ago at least that that admiral mccoy who'd been running our government operations business was seconded into the department of defense to support the navy for that specific purpose the express purpose of improving throughput at the shipyards That's what the-- that's what the certainly what the nation needs to do. that's what the-- that's what the certainly what the nation needs to do That's what the Navy needs to have. that's what the navy needs to have I'd say we're continuing at the pace we were, you know, delivering on our delivery schedules and very, very, very pleased to see the shipyards turning the corner and bouncing off the bottom in terms of delivery rate. I'd say we're continuing at the pace we were, you know, delivering on our delivery schedules and very, very, very pleased to see the shipyards turning the corner and bouncing off the bottom in terms of delivery rate. i'd say we're continuing at the pace we were you know delivering on our delivery schedules and very very very pleased to see the shipyards turning the corner and bouncing off the bottom in terms of delivery rate

Speaker 6: Yeah. Thanks. I, I guess as a follow-up, just, I wanted to ask on capital deployment and sort of what your priority is now and how big, how big could M&A be as a part of that after AOT and Kinectrics? Yeah. yeah Thanks. thanks I, I guess as a follow-up, just, I wanted to ask on capital deployment and sort of what your priority is now and how big, how big could M&A be as a part of that after AOT and Kinectrics? i i guess as a follow-up just i wanted to ask on capital deployment and sort of what your priority is now and how big how big could m&a be as a part of that after aot and kinectrics

Speaker 7: Yeah, so look, we're really excited about some of the things that we've done to strengthen our balance sheet. You know, we, we did the convertible in the fourth quarter, I think, which really gave us a lot of flexibility. So we, we feel well-positioned for, you know, potential M&A as we come into 2026. You know, I will say, as we look at a number of different targets that are out there, you know, we're highly focused on continuing to drive something within our core and also very highly focused on driving an increase in our overall capacity as we prepare to support our customer needs in the future. So those are the things that we're gonna be looking for. Yeah, so look, we're really excited about some of the things that we've done to strengthen our balance sheet. yeah so look we're really excited about some of the things that we've done to strengthen our balance sheet You know, we, we did the convertible in the fourth quarter, I think, which really gave us a lot of flexibility. you know we we did the convertible in the fourth quarter i think which really gave us a lot of flexibility So we, we feel well-positioned for, you know, potential M&A as we come into 2026. so we we feel well-positioned for you know potential m&a as we come into 2026 You know, I will say, as we look at a number of different targets that are out there, you know, we're highly focused on continuing to drive something within our core and also very highly focused on driving an increase in our overall capacity as we prepare to support our customer needs in the future. you know i will say as we look at a number of different targets that are out there you know we're highly focused on continuing to drive something within our core and also very highly focused on driving an increase in our overall capacity as we prepare to support our customer needs in the future So those are the things that we're gonna be looking for. so those are the things that we're gonna be looking for We have a number of assets that we always, you know, look at on a consistent basis, but I do think that we will continue to see M&A as a big part of our capital deployment strategy. We have a number of assets that we always, you know, look at on a consistent basis, but I do think that we will continue to see M&A as a big part of our capital deployment strategy. we have a number of assets that we always you know look at on a consistent basis but i do think that we will continue to see m&a as a big part of our capital deployment strategy

Speaker 6: Great. Thank you. Great. great Thank you. thank you

Speaker 9: Next question comes from the line of Jeffrey Campbell with Seaport Research Partners. Your line is open. Next question comes from the line of Jeffrey Campbell with Seaport Research Partners . next question comes from the line of jeffrey campbell with seaport research partners Your line is open. your line is open

Speaker 5: Congratulations on the quarter, and thanks for taking my question. I'll just stick with one. Rex, you mentioned your U.S. commercial facility might be built at Mount Vernon. I just wondered, are there any particular challenges in siting a commercial facility adjacent to one that's dedicated to defense purposes? Thanks. Congratulations on the quarter, and thanks for taking my question. congratulations on the quarter and thanks for taking my question I'll just stick with one. i'll just stick with one Rex, you mentioned your U.S. commercial facility might be built at Mount Vernon. rex you mentioned your u.s commercial facility might be built at mount vernon I just wondered, are there any particular challenges in siting a commercial facility adjacent to one that's dedicated to defense purposes? i just wondered are there any particular challenges in siting a commercial facility adjacent to one that's dedicated to defense purposes Thanks. thanks

Speaker 10: Yeah. Thanks, Jeff, for the question. Good to hear you. No, I, I think it's the opposite, right? There's some synergies between our government business there and the, you know, the would-be commercial facility there. For example, you'd share radiography facilities. I did mention that we have a 1,000 metric ton crane capacity to stevedore components right onto the Ohio River there. We would certainly jointly share those assets and be able to amortize the cost over those assets together. I think there's certain advantages. We would segregate those businesses for, for certain reasons, financially. Yeah, no, very good reasons and very good synergies for putting those two things on the same site. Yeah. yeah Thanks, Jeff, for the question. thanks jeff for the question Good to hear you. good to hear you No, I, I think it's the opposite, right? no i i think it's the opposite right There's some synergies between our government business there and the, you know, the would-be commercial facility there. there's some synergies between our government business there and the you know the would-be commercial facility there For example, you'd share radiography facilities. for example you'd share radiography facilities I did mention that we have a 1,000 metric ton crane capacity to stevedore components right onto the Ohio River there. i did mention that we have a 1,000 metric ton crane capacity to stevedore components right onto the ohio river there We would certainly jointly share those assets and be able to amortize the cost over those assets together. we would certainly jointly share those assets and be able to amortize the cost over those assets together I think there's certain advantages. i think there's certain advantages We would segregate those businesses for, for certain reasons, financially. we would segregate those businesses for for certain reasons financially Yeah, no, very good reasons and very good synergies for putting those two things on the same site. yeah no very good reasons and very good synergies for putting those two things on the same site

Speaker 5: Great. Thank you. Great. great Thank you. thank you

Speaker 10: Thank you. Thank you. thank you

Speaker 9: Next question comes from the line of Robert Labick with CJS Securities. Your line is open. Next question comes from the line of Robert Labick with CJS Securities. next question comes from the line of robert labick with cjs securities Your line is open. your line is open

Speaker 13: Hi, this is Will in for Bob. As a U.S. company with obviously strong operations in Canada, what is the latest impact, if any, on the tariff situation? In general, does the seemingly souring of U.S.-Canada relations have an impact on BWX? Hi, this is Will in for Bob. hi this is will in for bob As a U.S. company with obviously strong operations in Canada, what is the latest impact, if any, on the tariff situation? as a u.s company with obviously strong operations in canada what is the latest impact if any on the tariff situation In general, does the seemingly souring of U.S.-Canada relations have an impact on BWX? in general does the seemingly souring of u.s.-canada relations have an impact on bwx

Speaker 10: You know, knock on wood, it hasn't so far because we're still operating under the framework of the USMCA trade agreement, the US, Mexico, Canada trade agreement, that, you know, that was struck in the, in the last Trump administration. There, there are no tariffs in that, in that framework on medical products or on nuclear components, happily. This last announcement, around 10 and then 15% tariffs across the board, does not apply to the USMCA agreement, so we're still operating in that framework. Now, that's being renegotiated right now, so we'll see how that comes out. I'm certainly hopeful that trade relations between the U.S. and Canada and Mexico remain normal and continue to, you know, not have a negative influence on our business. You know, knock on wood, it hasn't so far because we're still operating under the framework of the USMCA trade agreement, the US, Mexico, Canada trade agreement, that, you know, that was struck in the, in the last Trump administration. you know knock on wood it hasn't so far because we're still operating under the framework of the usmca trade agreement the us mexico canada trade agreement that you know that was struck in the in the last trump administration There, there are no tariffs in that, in that framework on medical products or on nuclear components, happily. there there are no tariffs in that in that framework on medical products or on nuclear components happily This last announcement, around 10 and then 15% tariffs across the board, does not apply to the USMCA agreement, so we're still operating in that framework. this last announcement around 10 and then 15% tariffs across the board does not apply to the usmca agreement so we're still operating in that framework Now, that's being renegotiated right now, so we'll see how that comes out. now that's being renegotiated right now so we'll see how that comes out I'm certainly hopeful that trade relations between the U.S. and Canada and Mexico remain normal and continue to, you know, not have a negative influence on our business. i'm certainly hopeful that trade relations between the u.s and canada and mexico remain normal and continue to you know not have a negative influence on our business

Speaker 13: Thank you. One more: As we look over the next several years, we have DEUC and HPDU incremental growth this year and naval growth coming in 2027. Beyond that, can you discuss the timing of SMRs, Canadian new builds, micro reactors, and other long-term layers to your growth map? Thank you. thank you One more: As we look over the next several years, we have DEUC and HPDU incremental growth this year and naval growth coming in 2027. one more as we look over the next several years we have deuc and hpdu incremental growth this year and naval growth coming in 2027 Beyond that, can you discuss the timing of SMRs, Canadian new builds, micro reactors, and other long-term layers to your growth map? beyond that can you discuss the timing of smrs canadian new builds micro reactors and other long-term layers to your growth map

Speaker 10: Yeah, I'd say, you know, a variety of different time frames for all of that stuff. Then we mentioned on the script that, that we now have business with AP1000 in Europe, with that Kozloduy owner's engineer contracts. We certainly have an SMR. We have SMR contracts at hand right now, but we're certainly making the reactor pressure vessel for GE, and we're doing a number of other components for different small modular reactor suppliers. So I think you just see that building over the years. It's my expectation that we'll have additional orders for the BWRX-300 this year. It's also my expectation that we'll have orders for the AP1000 this year. We'll see. Yeah, I'd say, you know, a variety of different time frames for all of that stuff. yeah i'd say you know a variety of different time frames for all of that stuff Then we mentioned on the script that, that we now have business with AP1000 in Europe, with that Kozloduy owner's engineer contracts. then we mentioned on the script that that we now have business with ap1000 in europe with that kozloduy owner's engineer contracts We certainly have an SMR. we certainly have an smr We have SMR contracts at hand right now, but we're certainly making the reactor pressure vessel for GE, and we're doing a number of other components for different small modular reactor suppliers. we have smr contracts at hand right now but we're certainly making the reactor pressure vessel for ge and we're doing a number of other components for different small modular reactor suppliers So I think you just see that building over the years. so i think you just see that building over the years It's my expectation that we'll have additional orders for the BWRX-300 this year. it's my expectation that we'll have additional orders for the bwrx-300 this year It's also my expectation that we'll have orders for the AP1000 this year. it's also my expectation that we'll have orders for the ap1000 this year We'll see. we'll see Those aren't in hand yet, but I think we're starting to see the commercial side of our business build very nicely, and we have forecasted pretty aggressive organic growth there, but most of that is in hand. I think you can see small modular reactors ramping up, you know, starting now, essentially. Microreactors, of course, we've had a good program going for several years now, but we now have the Janus program as, as sort of a follow-on program to Pele, and we're in a good competitive position for that, and we're hoping for a good outcome. You can see that building over the next few years. Medical's been growing at this sort of 20% compounded clip. Those aren't in hand yet, but I think we're starting to see the commercial side of our business build very nicely, and we have forecasted pretty aggressive organic growth there, but most of that is in hand. those aren't in hand yet but i think we're starting to see the commercial side of our business build very nicely and we have forecasted pretty aggressive organic growth there but most of that is in hand I think you can see small modular reactors ramping up, you know, starting now, essentially. i think you can see small modular reactors ramping up you know starting now essentially Microreactors, of course, we've had a good program going for several years now, but we now have the Janus program as, as sort of a follow-on program to Pele, and we're in a good competitive position for that, and we're hoping for a good outcome. microreactors of course we've had a good program going for several years now but we now have the janus program as as sort of a follow-on program to pele and we're in a good competitive position for that and we're hoping for a good outcome You can see that building over the next few years. you can see that building over the next few years Medical's been growing at this sort of 20% compounded clip. medical's been growing at this sort of 20% compounded clip you know, we're seeing generally very good demand in all of our markets, and we expect it to build, you know, at various timings over the years. you know, we're seeing generally very good demand in all of our markets, and we expect it to build, you know, at various timings over the years. you know we're seeing generally very good demand in all of our markets and we expect it to build you know at various timings over the years

Speaker 13: Thank you. Thank you. thank you

Speaker 10: Thank you. Thank you. thank you

Speaker 9: Next question comes from the line of Jeff Grampp with Northland Securities. Your line is open. Next question comes from the line of Jeff Grampp with Northland Securities. next question comes from the line of jeff grampp with northland securities Your line is open. your line is open

Speaker 4: Evening. Thanks for the time. Rex, to, to, to go back on the, the AP1000 comments that you had in your prepared remarks, can you give us a sense for BWXT's revenue content per project you're competing on or, or any generalities there, just to kind of get a sense of, of materiality for some of these projects for the company? Thanks. Evening. evening Thanks for the time. thanks for the time Rex, to, to, to go back on the, the AP1000 comments that you had in your prepared remarks, can you give us a sense for BWXT's revenue content per project you're competing on or, or any generalities there, just to kind of get a sense of, of materiality for some of these projects for the company? rex to to to go back on the the ap1000 comments that you had in your prepared remarks can you give us a sense for bwxt's revenue content per project you're competing on or or any generalities there just to kind of get a sense of of materiality for some of these projects for the company Thanks. thanks

Speaker 10: Yeah, I think we've characterized it historically, for the large reactors, I think on a CANDU new build, which was not your question, but on that one, it's CAD 500 million to CAD 1 billion, perhaps. particularly in Canadian, with our, with the Kinectrics contribution, maybe pushing to the high end of that. I'd say on an AP1000, depending on the components that we win, steam generators and whatnot, you could think of, you know, in the hundreds of millions of dollars, maybe in the low hundreds of millions of dollars. But that's a bit of guesswork, right? We don't know what content we're gonna win yet. We're bidding on a lot of different things, and we'll just have to wait and see how that comes out. Yeah, I think we've characterized it historically, for the large reactors, I think on a CANDU new build, which was not your question, but on that one, it's CAD 500 million to CAD 1 billion, perhaps. particularly in Canadian, with our, with the Kinectrics contribution, maybe pushing to the high end of that. yeah i think we've characterized it historically for the large reactors i think on a candu new build which was not your question but on that one it's cad 500 million to cad 1 billion perhaps particularly in canadian with our with the kinectrics contribution maybe pushing to the high end of that I'd say on an AP1000, depending on the components that we win, steam generators and whatnot, you could think of, you know, in the hundreds of millions of dollars, maybe in the low hundreds of millions of dollars. i'd say on an ap1000 depending on the components that we win steam generators and whatnot you could think of you know in the hundreds of millions of dollars maybe in the low hundreds of millions of dollars But that's a bit of guesswork, right? but that's a bit of guesswork right We don't know what content we're gonna win yet. we don't know what content we're gonna win yet We're bidding on a lot of different things, and we'll just have to wait and see how that comes out. we're bidding on a lot of different things and we'll just have to wait and see how that comes out

Speaker 4: Understood. That, that's helpful. Thank you. For my follow-up on some of the recent government contracts, you guys alluded to having some, some lower margins at the front end. I, I'm just wondering structurally, as these ramp over time, should we expect just kind of a kind of linear progression in margin over time as these mature? Or is it kind of a more of a stair-step function as milestones are reached? Just kind of wondering to, to level set expectations as those contracts kind of roll through the results here. Understood. understood That, that's helpful. that that's helpful Thank you. thank you For my follow-up on some of the recent government contracts, you guys alluded to having some, some lower margins at the front end. for my follow-up on some of the recent government contracts you guys alluded to having some some lower margins at the front end I, I'm just wondering structurally, as these ramp over time, should we expect just kind of a kind of linear progression in margin over time as these mature? i i'm just wondering structurally as these ramp over time should we expect just kind of a kind of linear progression in margin over time as these mature Or is it kind of a more of a stair-step function as milestones are reached? or is it kind of a more of a stair-step function as milestones are reached Just kind of wondering to, to level set expectations as those contracts kind of roll through the results here. just kind of wondering to to level set expectations as those contracts kind of roll through the results here

Speaker 7: I, you know, I would say that the, the contracts are structured slightly differently. You know, we, we are in the first phase of negotiating under the Defense Fuels Program, and then for HPDU, that's, that's a longer kind of upfront negotiated program. I think in both cases, what we would typically do, along with our processes, is kind of evaluate, you know, the overall margin performance. Usually, as we meet various milestones and reduce risk into those programs, is when we would incrementally adjust margin. Those programs, we, we feel like we have a great opportunity to perform well, but, but it's a little early days and, and we talked a little bit about how we're doing some infrastructure build-out, and so we have some lower margin components associated with those initial, those initial costs. I, you know, I would say that the, the contracts are structured slightly differently. i you know i would say that the the contracts are structured slightly differently You know, we, we are in the first phase of negotiating under the Defense Fuels Program, and then for HPDU, that's, that's a longer kind of upfront negotiated program. you know we we are in the first phase of negotiating under the defense fuels program and then for hpdu that's that's a longer kind of upfront negotiated program I think in both cases, what we would typically do, along with our processes, is kind of evaluate, you know, the overall margin performance. i think in both cases what we would typically do along with our processes is kind of evaluate you know the overall margin performance Usually, as we meet various milestones and reduce risk into those programs, is when we would incrementally adjust margin. usually as we meet various milestones and reduce risk into those programs is when we would incrementally adjust margin Those programs, we, we feel like we have a great opportunity to perform well, but, but it's a little early days and, and we talked a little bit about how we're doing some infrastructure build-out, and so we have some lower margin components associated with those initial, those initial costs. those programs we we feel like we have a great opportunity to perform well but but it's a little early days and and we talked a little bit about how we're doing some infrastructure build-out and so we have some lower margin components associated with those initial those initial costs We do expect that as we start to get into full ramp of, you know, processing of the materials and production, that ultimately we'll have an opportunity to outperform. We do expect that as we start to get into full ramp of, you know, processing of the materials and production, that ultimately we'll have an opportunity to outperform. we do expect that as we start to get into full ramp of you know processing of the materials and production that ultimately we'll have an opportunity to outperform

Speaker 4: Got it. That's helpful. That's helpful. Okay, thank you, guys, for the time. Got it. got it That's helpful. that's helpful That's helpful. that's helpful Okay, thank you, guys, for the time. okay thank you guys for the time

Speaker 9: Next question comes from the line of Jed Dorsheimer with William Blair. Your line is open. Next question comes from the line of Jed Dorsheimer with William Blair. next question comes from the line of jed dorsheimer with william blair Your line is open. your line is open

Speaker 3: Hey, thanks for taking my question, and congrats on the quarter. Rex, I guess, first question, Pentagon just released the, you know, $29.2 billion spending, added a, a new, sub... I'm just wondering how that compares to, to your expectations. Was that ahead, in line, behind your expectations? Any surprises as you, as you look through the, the, the budget allocation? I have a follow-up. Hey, thanks for taking my question, and congrats on the quarter. hey thanks for taking my question and congrats on the quarter Rex, I guess, first question, Pentagon just released the, you know, $29.2 billion spending, added a, a new, sub... rex i guess first question pentagon just released the you know $29.2 billion spending added a a new sub I'm just wondering how that compares to, to your expectations. i'm just wondering how that compares to to your expectations Was that ahead, in line, behind your expectations? was that ahead in line behind your expectations Any surprises as you, as you look through the, the, the budget allocation? any surprises as you as you look through the the the budget allocation I have a follow-up. i have a follow-up

Speaker 10: Yeah, sure, Jed. The, that appropriation of funding really doesn't influence our business, right? Our, our programs are funded through different lines, it's, it was a neutral for us. We are still on the shipbuilding schedule at 2 Virginias a year, 1 Columbia a year, and, and 4 is more or less on 5-year intervals. It was a, it was a, we were indifferent to that news. Yeah, sure, Jed. yeah sure jed The, that appropriation of funding really doesn't influence our business, right? the that appropriation of funding really doesn't influence our business right Our, our programs are funded through different lines, it's, it was a neutral for us. our our programs are funded through different lines it's it was a neutral for us We are still on the shipbuilding schedule at 2 Virginias a year, 1 Columbia a year, and, and 4 is more or less on 5-year intervals. we are still on the shipbuilding schedule at 2 virginias a year 1 columbia a year and and 4 is more or less on 5-year intervals It was a, it was a, we were indifferent to that news. it was a it was a we were indifferent to that news

Speaker 3: Got it. Thank you. Maybe for both you and Mike, as you think about capital allocation on the commercial side of things, you know, you're in the CANDU in, in Canada and abroad. You're -- you've just gotten into AP1000, and you're in a variety of SMRs, between GE, Rolls-Royce, and also, you know, some of the new players. I'm just curious, how, with, with that level of visibility, you know, are you... How are you thinking about the business? Are you seeing, i-is it, is it sort of, you know, growth at a steady pace, but in different regions that you're able to support? Or do you see any particular technology that's, that's, you know, advancing at a, at a faster pace? Got it. got it Thank you. thank you Maybe for both you and Mike, as you think about capital allocation on the commercial side of things, you know, you're in the CANDU in, in Canada and abroad. maybe for both you and mike as you think about capital allocation on the commercial side of things you know you're in the candu in in canada and abroad You're -- you've just gotten into AP1000, and you're in a variety of SMRs, between GE, Rolls-Royce, and also, you know, some of the new players. you're -- you've just gotten into ap1000 and you're in a variety of smrs between ge rolls-royce and also you know some of the new players I'm just curious, how, with, with that level of visibility, you know, are you... i'm just curious how with with that level of visibility you know are you How are you thinking about the business? how are you thinking about the business Are you seeing, i-is it, is it sort of, you know, growth at a steady pace, but in different regions that you're able to support? are you seeing i-is it is it sort of you know growth at a steady pace but in different regions that you're able to support Or do you see any particular technology that's, that's, you know, advancing at a, at a faster pace? or do you see any particular technology that's that's you know advancing at a at a faster pace How are you thinking about, you know, adding resources to, to supply those markets? How are you thinking about, you know, adding resources to, to supply those markets? how are you thinking about you know adding resources to to supply those markets

Speaker 10: Yeah, I'd say when you look at our capacity in Cambridge, Jed, it's, you know, it's not. You could see a couple of years into the future where we start to look capacity constrained, and so we're looking for assets, in particular, in the US. We've got things in, you know, interesting targets in the acquisition pipeline, and I mentioned explicitly on the call the thought of building a plant at Mount Vernon. We think we need US capacity first and soonest, and we put a high emphasis on that. I think the second interesting opportunity is around Europe, that there's an appetite for small modular reactors there. I think, you know, whether we would invest there, I think depends somewhat on localization demands. Yeah, we need capacity. Yeah, I'd say when you look at our capacity in Cambridge, Jed, it's, you know, it's not. yeah i'd say when you look at our capacity in cambridge jed it's you know it's not You could see a couple of years into the future where we start to look capacity constrained, and so we're looking for assets, in particular, in the US. you could see a couple of years into the future where we start to look capacity constrained and so we're looking for assets in particular in the us We've got things in, you know, interesting targets in the acquisition pipeline, and I mentioned explicitly on the call the thought of building a plant at Mount Vernon. we've got things in you know interesting targets in the acquisition pipeline and i mentioned explicitly on the call the thought of building a plant at mount vernon We think we need US capacity first and soonest, and we put a high emphasis on that. we think we need us capacity first and soonest and we put a high emphasis on that I think the second interesting opportunity is around Europe, that there's an appetite for small modular reactors there. i think the second interesting opportunity is around europe that there's an appetite for small modular reactors there I think, you know, whether we would invest there, I think depends somewhat on localization demands. i think you know whether we would invest there i think depends somewhat on localization demands Yeah, we need capacity. yeah we need capacity We need it pretty soon because we see a lot of demand coming in the future, and we'll start in the U.S. with it. We need it pretty soon because we see a lot of demand coming in the future, and we'll start in the U.S. with it. we need it pretty soon because we see a lot of demand coming in the future and we'll start in the u.s with it

Speaker 3: Great. Great. great

Speaker 7: Yeah, Jed, the only thing I'm going to add is, I would just say that- Yeah, Jed, the only thing I'm going to add is, I would just say that- yeah jed the only thing i'm going to add is i would just say that-

Speaker 3: Yeah. Go ahead, Mike. Yeah. yeah Go ahead, Mike. yeah go ahead mike

Speaker 7: ... in addition to expanding footprint, you know, we are also investing in technologies to drive throughput within the factory. It's not just a, you know, let's go get as much footprint as we can, because we're trying to drive throughput through our operational excellence initiatives, which really supports the overall workforce as well. That, that's an important aspect of, as we look to capital deployment and where we want to spend money on additional machinery and technology. ... in addition to expanding footprint, you know, we are also investing in technologies to drive throughput within the factory. in addition to expanding footprint you know we are also investing in technologies to drive throughput within the factory It's not just a, you know, let's go get as much footprint as we can, because we're trying to drive throughput through our operational excellence initiatives, which really supports the overall workforce as well. it's not just a you know let's go get as much footprint as we can because we're trying to drive throughput through our operational excellence initiatives which really supports the overall workforce as well That, that's an important aspect of, as we look to capital deployment and where we want to spend money on additional machinery and technology. that that's an important aspect of as we look to capital deployment and where we want to spend money on additional machinery and technology

Speaker 3: Great. Thank you. Great. great Thank you. thank you

Speaker 9: Next question comes from the line of Samuel Struhsaker with Truist Securities. Your line is open. Next question comes from the line of Samuel Struhsaker with Truist Securities. next question comes from the line of samuel struhsaker with truist securities Your line is open. your line is open

Speaker 11: Hi, good evening, guys. On for Michael Ciarmoli. I appreciate you taking the questions. I think just to start, kind of a two-part, building off of the conversation around SMRs and microreactors. I was curious if you guys could just put a little more detail on kind of where you are with the NASA and military microreactor programs, and then also with the growth that you're seeing in small modular reactors, how are you guys looking at the TRISO fuel market overall in terms of where it's at now and potential opportunities moving forward? Thanks. Hi, good evening, guys. hi good evening guys On for Michael Ciarmoli. on for michael ciarmoli I appreciate you taking the questions. i appreciate you taking the questions I think just to start, kind of a two-part, building off of the conversation around SMRs and microreactors. i think just to start kind of a two-part building off of the conversation around smrs and microreactors I was curious if you guys could just put a little more detail on kind of where you are with the NASA and military microreactor programs, and then also with the growth that you're seeing in small modular reactors, how are you guys looking at the TRISO fuel market overall in terms of where it's at now and potential opportunities moving forward? i was curious if you guys could just put a little more detail on kind of where you are with the nasa and military microreactor programs and then also with the growth that you're seeing in small modular reactors how are you guys looking at the triso fuel market overall in terms of where it's at now and potential opportunities moving forward Thanks. thanks

Speaker 10: Yeah, sure. A few questions embedded there. On microreactors, we're in the middle of Pele. We deliver that to Idaho National Laboratory next year. You know, we announced the delivery of the fuel for that reactor at the end of last year, so we're proceeding apace, and that reactor will start undergoing testing, 2027, 2028 timeframe. Think of that as a precursor to the Janus program, which is in procurement right now. They're soliciting offers, offers from various technology providers, including us. We see that one as a super interesting opportunity. On the NASA side, we're still doing some work on nuclear thermal propulsion, although it's not within the context of the DRACO program, we still have some level of effort with NASA. I think the bigger opportunity in the space market is around fission surface power. Yeah, sure. yeah sure A few questions embedded there. a few questions embedded there On microreactors, we're in the middle of Pele. on microreactors we're in the middle of pele We deliver that to Idaho National Laboratory next year. we deliver that to idaho national laboratory next year You know, we announced the delivery of the fuel for that reactor at the end of last year, so we're proceeding apace, and that reactor will start undergoing testing, 2027, 2028 timeframe. you know we announced the delivery of the fuel for that reactor at the end of last year so we're proceeding apace and that reactor will start undergoing testing 2027 2028 timeframe Think of that as a precursor to the Janus program, which is in procurement right now. think of that as a precursor to the janus program which is in procurement right now They're soliciting offers, offers from various technology providers, including us. they're soliciting offers offers from various technology providers including us We see that one as a super interesting opportunity. we see that one as a super interesting opportunity On the NASA side, we're still doing some work on nuclear thermal propulsion, although it's not within the context of the DRACO program, we still have some level of effort with NASA. on the nasa side we're still doing some work on nuclear thermal propulsion although it's not within the context of the draco program we still have some level of effort with nasa I think the bigger opportunity in the space market is around fission surface power. i think the bigger opportunity in the space market is around fission surface power Looks like NASA intends to procure a fission reactor for a lunar base. Certainly we have, you know, got the right credentials to compete for that. In terms of TRISO fuel, I think there are two interesting things going on here. One is demand on the government side that's related to programs like Project Janus, where the microreactor technologies generally are calling for TRISO fuel or designed around TRISO fuel. I think there's also an interesting commercial play there, and we're certainly evaluating that. You know, either, you know, sub-grid or below-grid capacity, power output, and certainly remote applications for high-density power. A very interesting opportunity around TRISO, and we're looking pretty hard at whether we make an investment there, a larger scale investment. Looks like NASA intends to procure a fission reactor for a lunar base. looks like nasa intends to procure a fission reactor for a lunar base Certainly we have, you know, got the right credentials to compete for that. certainly we have you know got the right credentials to compete for that In terms of TRISO fuel, I think there are two interesting things going on here. in terms of triso fuel i think there are two interesting things going on here One is demand on the government side that's related to programs like Project Janus, where the microreactor technologies generally are calling for TRISO fuel or designed around TRISO fuel. one is demand on the government side that's related to programs like project janus where the microreactor technologies generally are calling for triso fuel or designed around triso fuel I think there's also an interesting commercial play there, and we're certainly evaluating that. i think there's also an interesting commercial play there and we're certainly evaluating that You know, either, you know, sub-grid or below-grid capacity, power output, and certainly remote applications for high-density power. you know either you know sub-grid or below-grid capacity power output and certainly remote applications for high-density power A very interesting opportunity around TRISO, and we're looking pretty hard at whether we make an investment there, a larger scale investment. a very interesting opportunity around triso and we're looking pretty hard at whether we make an investment there a larger scale investment

Speaker 11: Great. I'll leave it at that for now. Thank you. Great. great I'll leave it at that for now. i'll leave it at that for now Thank you. thank you

Speaker 10: Thank you. Thank you. thank you

Speaker 9: Again, if you would like to ask a question, press star, then the 1 on your telephone keypad. Our next question comes from the line of Jan Engelbrecht with Baird . Your line is open. Again, if you would like to ask a question, press star, then the 1 on your telephone keypad. again if you would like to ask a question press star then the 1 on your telephone keypad Our next question comes from the line of Jan Engelbrecht with Baird . our next question comes from the line of jan engelbrecht with baird Your line is open. your line is open

Speaker 2: Good afternoon, Rex and Mike. Progressing a strong quarter. I think just wanted to return to the, the AP1000 and the CANDU market. As we think about, you know, the AP1000 that, that owner, owner's engineer contract you won, and just in terms of components, do you consider your bid on sort of the component work to be more competitive if it's a North American project that gets announced versus, you know, something in Europe? Because, you know, on, on AP1000 in Poland, there's they've announced sort of the steam generator, supplier on that one, and I know you guys didn't bid on that. Good afternoon, Rex and Mike. good afternoon rex and mike Progressing a strong quarter. progressing a strong quarter I think just wanted to return to the, the AP1000 and the CANDU market. i think just wanted to return to the the ap1000 and the candu market As we think about, you know, the AP1000 that, that owner, owner's engineer contract you won, and just in terms of components, do you consider your bid on sort of the component work to be more competitive if it's a North American project that gets announced versus, you know, something in Europe? as we think about you know the ap1000 that that owner owner's engineer contract you won and just in terms of components do you consider your bid on sort of the component work to be more competitive if it's a north american project that gets announced versus you know something in europe Because, you know, on, on AP1000 in Poland, there's they've announced sort of the steam generator, supplier on that one, and I know you guys didn't bid on that. because you know on on ap1000 in poland there's they've announced sort of the steam generator supplier on that one and i know you guys didn't bid on that How should we think about as a new AP1000 contract or project gets announced, do you see that you have a sort of a better probability on which continent it's on? Or just, just how should we think think about that? How should we think about as a new AP1000 contract or project gets announced, do you see that you have a sort of a better probability on which continent it's on? how should we think about as a new ap1000 contract or project gets announced do you see that you have a sort of a better probability on which continent it's on Or just, just how should we think think about that? or just just how should we think think about that

Speaker 10: I don't think we're thinking of it that way, J.F. The owner's engineer contract with, with Bulgaria was a unique opportunity for us to team up with a component of Ontario Power Generation. We have their imprimatur, and we have our deep engineering capability, which is augmented by Kinectrics. That was a very particular opportunity there. I think, I think we're sort of geographic agnostic when it comes to component supply. We hope to be able to compete reasonably well in all these markets. But I would also say that, you know, as the market really starts to warm up and we start to see real capacity constraint, I think we'll be more competitive and we'll have more pricing power. I'm optimistic about all of it. I don't think we're thinking of it that way, J.F. i don't think we're thinking of it that way j.f The owner's engineer contract with, with Bulgaria was a unique opportunity for us to team up with a component of Ontario Power Generation. the owner's engineer contract with with bulgaria was a unique opportunity for us to team up with a component of ontario power generation We have their imprimatur, and we have our deep engineering capability, which is augmented by Kinectrics. we have their imprimatur and we have our deep engineering capability which is augmented by kinectrics That was a very particular opportunity there. that was a very particular opportunity there I think, I think we're sort of geographic agnostic when it comes to component supply. i think i think we're sort of geographic agnostic when it comes to component supply We hope to be able to compete reasonably well in all these markets. we hope to be able to compete reasonably well in all these markets But I would also say that, you know, as the market really starts to warm up and we start to see real capacity constraint, I think we'll be more competitive and we'll have more pricing power. but i would also say that you know as the market really starts to warm up and we start to see real capacity constraint i think we'll be more competitive and we'll have more pricing power I'm optimistic about all of it. i'm optimistic about all of it

Speaker 2: Perfect. Thanks. Thanks, Rex. Just a quick follow-up on the naval nuclear business. You know, a lot of shipbuilding, and reconciliation funding for shipbuilding, and then you just got the news from Australia. They're gonna invest, I think, close to $3 billion in their own shipyard. In terms of second source opportunities, can you just sort of how are you thinking about long term, you know, all this new funding that's going on, it seems that there's really a lot of attention being placed into sort of reducing the bottlenecks? How does that set you up, you know, beyond 2030 for long-term growth in that segment? Perfect. perfect Thanks. thanks Thanks, Rex. thanks rex Just a quick follow-up on the naval nuclear business. just a quick follow-up on the naval nuclear business You know, a lot of shipbuilding, and reconciliation funding for shipbuilding, and then you just got the news from Australia. you know a lot of shipbuilding and reconciliation funding for shipbuilding and then you just got the news from australia They're gonna invest, I think, close to $3 billion in their own shipyard. they're gonna invest i think close to $3 billion in their own shipyard In terms of second source opportunities, can you just sort of how are you thinking about long term, you know, all this new funding that's going on, it seems that there's really a lot of attention being placed into sort of reducing the bottlenecks? in terms of second source opportunities can you just sort of how are you thinking about long term you know all this new funding that's going on it seems that there's really a lot of attention being placed into sort of reducing the bottlenecks How does that set you up, you know, beyond 2030 for long-term growth in that segment? how does that set you up you know beyond 2030 for long-term growth in that segment

Speaker 10: Yeah, maybe a little hard to say. I mean, right now we're, you know, we're sort of building our, building our guidance and our internal forecast around the shipbuilding plan. We do have some business on the AUKUS side related to production capacity that's giving us a bit of growth here in 2026. Of course, there's the sort of the wild card of South Korea out there. We would hope to be involved in, say, fuel manufacturing at least, if not reactor cores. There are interesting possibilities out there. I would say that if you, if you think about reconciliation and just a broader defense budget, I think you'd see more opportunities around microreactors, fuel, and other such things that are sort of not prescriptively mapped into the shipbuilding schedule. Yeah, maybe a little hard to say. yeah maybe a little hard to say I mean, right now we're, you know, we're sort of building our, building our guidance and our internal forecast around the shipbuilding plan. i mean right now we're you know we're sort of building our building our guidance and our internal forecast around the shipbuilding plan We do have some business on the AUKUS side related to production capacity that's giving us a bit of growth here in 2026. we do have some business on the aukus side related to production capacity that's giving us a bit of growth here in 2026 Of course, there's the sort of the wild card of South Korea out there. of course there's the sort of the wild card of south korea out there We would hope to be involved in, say, fuel manufacturing at least, if not reactor cores. we would hope to be involved in say fuel manufacturing at least if not reactor cores There are interesting possibilities out there. there are interesting possibilities out there I would say that if you, if you think about reconciliation and just a broader defense budget, I think you'd see more opportunities around microreactors, fuel, and other such things that are sort of not prescriptively mapped into the shipbuilding schedule. i would say that if you if you think about reconciliation and just a broader defense budget i think you'd see more opportunities around microreactors fuel and other such things that are sort of not prescriptively mapped into the shipbuilding schedule A bit of a TBD for us, but, you know, certainly exciting on the national security side of our business. A bit of a TBD for us, but, you know, certainly exciting on the national security side of our business. a bit of a tbd for us but you know certainly exciting on the national security side of our business

Speaker 2: Perfect. Thanks, Rex. Thanks for taking my questions, Rex. Appreciate it. Perfect. perfect Thanks, Rex. thanks rex Thanks for taking my questions, Rex. thanks for taking my questions rex Appreciate it. appreciate it

Speaker 10: Thank you. Thank you. thank you

Speaker 9: Next question comes from the line of Andre Madrid with BTIG. Your line is open. Next question comes from the line of Andre Madrid with BTIG. next question comes from the line of andre madrid with btig Your line is open. your line is open

Speaker 8: Hey, this is Ned Morgan on for Andre. I just want to ask and get the latest on the Canadian Competition Bureau's investigation into the Kinectrics acquisition. Hey, this is Ned Morgan on for Andre. hey this is ned morgan on for andre I just want to ask and get the latest on the Canadian Competition Bureau's investigation into the Kinectrics acquisition. i just want to ask and get the latest on the canadian competition bureau's investigation into the kinectrics acquisition

Speaker 10: It's been pretty quiet on, on our front. No news on that one. It's been pretty quiet on, on our front. it's been pretty quiet on on our front No news on that one. no news on that one

Speaker 8: All right. A follow-up. Is there any update on when we could see approval of Tech 99? All right. all right A follow-up. a follow-up Is there any update on when we could see approval of Tech 99? is there any update on when we could see approval of tech 99

Speaker 10: Yeah, not much new there. I've said the last couple of quarters that we are in the sort of the grueling last mile of that, around some issues with product quality, filtration, concentration, things that we've been working on. We do have new leadership in that medical business, and the, and the person of Jason Van Wart is showing a lot of strong leadership in that business and has Jason has some compelling new ideas around our commercial product strategy, including Tech 99. Early days on that, but we'll see how that forms up. I find myself encouraged about that business broadly. We have not submitted to the FDA yet, and I don't and I have, frankly, imperfect clarity around that because of these product quality issues that we're having to sort through. Yeah, not much new there. yeah not much new there I've said the last couple of quarters that we are in the sort of the grueling last mile of that, around some issues with product quality, filtration, concentration, things that we've been working on. i've said the last couple of quarters that we are in the sort of the grueling last mile of that around some issues with product quality filtration concentration things that we've been working on We do have new leadership in that medical business, and the, and the person of Jason Van Wart is showing a lot of strong leadership in that business and has Jason has some compelling new ideas around our commercial product strategy, including Tech 99. we do have new leadership in that medical business and the and the person of jason van wart is showing a lot of strong leadership in that business and has jason has some compelling new ideas around our commercial product strategy including tech 99 Early days on that, but we'll see how that forms up. early days on that but we'll see how that forms up I find myself encouraged about that business broadly. i find myself encouraged about that business broadly We have not submitted to the FDA yet, and I don't and I have, frankly, imperfect clarity around that because of these product quality issues that we're having to sort through. we have not submitted to the fda yet and i don't and i have frankly imperfect clarity around that because of these product quality issues that we're having to sort through I will say that we did not contemplate Tech 99 revenue in 2026 in our guidance to that we just published, and so it's, it's not in our numbers. It'd be, it would be an upside for us if it, if it did occur. I will say that we did not contemplate Tech 99 revenue in 2026 in our guidance to that we just published, and so it's, it's not in our numbers. i will say that we did not contemplate tech 99 revenue in 2026 in our guidance to that we just published and so it's it's not in our numbers It'd be, it would be an upside for us if it, if it did occur. it'd be it would be an upside for us if it if it did occur

Speaker 8: Okay. Thank you very much. Okay. okay Thank you very much. thank you very much

Speaker 10: Thank you. Thank you. thank you

Speaker 9: There are no further questions at this time. I would like to turn the call back over to Chase Jacobson for closing remarks. There are no further questions at this time. there are no further questions at this time I would like to turn the call back over to Chase Jacobson for closing remarks. i would like to turn the call back over to chase jacobson for closing remarks

Speaker 1: Yeah, thanks, Desiree. Thanks, everybody, for joining us today. We look forward to speaking with many of you and seeing you at upcoming investor events or on calls. If you have any questions, please feel free to reach out to me at [email protected]. Have a great night. Thank you. Yeah, thanks, Desiree. yeah thanks desiree Thanks, everybody, for joining us today. thanks everybody for joining us today We look forward to speaking with many of you and seeing you at upcoming investor events or on calls. we look forward to speaking with many of you and seeing you at upcoming investor events or on calls If you have any questions, please feel free to reach out to me at [email protected]. if you have any questions please feel free to reach out to me at [email protected] Have a great night. have a great night Thank you. thank you

Speaker 9: Ladies and gentlemen, that concludes today's call. Thank you all for joining in. You may now disconnect. Ladies and gentlemen, that concludes today's call. ladies and gentlemen that concludes today's call Thank you all for joining in. thank you all for joining in You may now disconnect. you may now disconnect