BWX Technologies (BWXT 3.35%), a key supplier of nuclear components to the U.S. government and commercial markets, reported its Q2 2025 results on August 4, 2025. Revenue (GAAP) was $764.0 million, handily beating analysts' GAAP estimates of $711.1 million. Non-GAAP earnings per share reached $1.02, outperforming the $0.79 non-GAAP consensus. The company's backlog grew sharply, reaching $6.0 billion, supporting a raised revenue and non-GAAP earnings forecast for 2025. Overall, the quarter delivered strong growth and operational results, though ongoing challenges in commercial profit margins were noted.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $1.02 | $0.79 | $0.82 | 24% |
| Revenue (GAAP) | $764.0 million | $711.06 million | $681.5 million | 12% |
| Adjusted EBITDA | $145.9 million | $126.2 million | 16% | |
| Operating Income (GAAP) | $102.4 million | $98.8 million | 4% | |
| Free Cash Flow | $126.3 million | $35.5 million | 256.1% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Key Success Factors
BWX Technologies operates in two main segments: Government Operations and Commercial Operations. The Government segment designs and manufactures nuclear components for the U.S. Navy and Department of Energy, including propulsion systems for submarines and aircraft carriers. The Commercial segment supplies nuclear power components, life-extension services for nuclear plants, and medical isotopes used in healthcare imaging and treatments.
The company's growth depends on demand from the U.S. government, which usually provides steady, multi-year contracts. Its commercial business responds to global demand for nuclear power and medical isotopes. Strategic investments and acquisitions, such as the recent purchase of Kinectrics, help expand BWXT's technical capabilities and address new markets.
Notable Developments in the Quarter
The quarter saw a sharp rise in revenue, driven by outperformance in both core segments. Government Operations produced $589.0 million in GAAP revenue, up 9% from the prior-year quarter, with operating income (GAAP) rising 18%. A highlight was a record backlog of $4.44 billion in this segment, up over 54% compared to Q2 2024. Key contract wins included new pricing agreements for naval reactors—a core business anchored in federal defense spending priorities. Management noted, "exceptionally strong second quarter 2025 financial results driven by solid operational performance and pacing of work, particularly in Government Operations,"
Commercial Operations delivered revenue of $176.1 million, representing 24% growth compared to Q2 2024, but the segment's operating income (GAAP) dropped 59%. The decline resulted from unfavorable project mix and increased costs, especially raw material inflation in products like nuclear fuel tubing. Import cost pressures, most notably zirconium, affected profitability. Management expects relief in the second half of 2025 as cost pass-through mechanisms kick in under existing contracts. The commercial backlog more than doubled from $669 million in Q2 2024 to $1.58 billion, reflecting demand in nuclear and medical markets.
The company closed its acquisition of Kinectrics in May 2025. This move aims to grow BWXT's capacity in nuclear lifecycle services and radiopharmaceuticals, contributing to the Commercial segment. Both recent acquisitions—Kinectrics and Aerojet Ordnance Tennessee—added to revenue during the quarter and contributed to the consolidated order backlog reaching a record $6.0 billion at quarter end. Alongside this, the company kept pace with expansion plans, including scaled-up manufacturing at its Cambridge facility in Canada.
On a consolidated basis, adjusted EBITDA rose 16% to $145.9 million. Operating income (GAAP) was up 4%, reflecting gains in Government Operations mostly offset by lower profits in Commercial. Free cash flow (non-GAAP) improved significantly, rising to $126.3 million from $35.5 million in Q2 2024, aided by improved working capital discipline and contract award timing. BWXT paid $23.1 million in dividends during the quarter, reflecting a steady $0.25 per share payout.
Financial Outlook and What to Watch Next
Management raised its financial outlook for 2025, increasing guidance for adjusted EBITDA, non-GAAP EPS, and free cash flow, now projecting revenue near $3.1 billion (previously ~$3.0 billion) and non-GAAP EPS of $3.65–$3.75 (up from $3.40–$3.55). Adjusted EBITDA is now expected between $565 million and $575 million, while free cash flow guidance climbed to $275–$285 million. This enhanced forecast is backed by the strong backlog and robust first-half order trends. The company's CEO stated, ""Based on our strong year-to-date results, robust bookings, and favorable market outlook, we are increasing our 2025 financial guidance metrics,""
Investors will want to watch margin recovery in Commercial Operations as cost pass-through protections are implemented, and how well BWXT integrates newly acquired businesses. The company's exposure to U.S. government budgets remains a central factor—any major changes in defense spending or procurement could affect financial results in future periods. Raw material costs and progress in expanding medical radioisotopes capability are also key variables.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
