BW-PA Q3 2026 earnings call transcript, November 9, 2026

All right. Thanks. And then maybe second, on 2027 guidance, can you just talk to the confidence and visibility that you have into that? Maybe just how much contribution from that North Dakota project versus other areas of the business, including, you know, parts and services? And, and, and. Anything else? Yeah. Over, I mean, we, uh, as you know, mentioned in the comments, um, on the quarter, uh, parts and services for Q3 had a record booking quarter, um, which actually surpassed the 2025, which was another record booking quarter for parts and services. So, um, honestly, we see that progressing as we go into 2027 at this stage, uh, not only in, from North America, but around the world, right? We, we see that demand continuing. Um, the. Especially in some of the coal markets that are, um, you know, as I mentioned in the comments that are having a really difficult time obtaining natural gas. So we're, uh, we're seeing a lot of new renewed opportunities on different things to, to support some of those coal facilities and have them run more, uh, past a peaker status, but, you know, actually participating in, in full base load generation. So a lot of work and activities on that. We, we see that into our numbers next year. Um, at the same time, um, you know, obviously the project North Dakota will continue on that particular piece, um, uh, as it relates to contributing to 2027. But we, we're, you know, as mentioned also, we have a number of projects and do really anticipate some bookings of a significant size, you know, two, three, 400 million and higher. But, um, that could potentially come here in the fourth quarter of 2026 and early part of 2027. Um, that will, uh, you know, have some uptake into 2020, you know,

a little bit in 2027, but those projects will have a bigger impact in 28, 29, um, as we, you know, move forward on some of those areas. So, um, you know, as, as we progress on some of these in bookings, there, you know, there potentially could be some upside to 2027, but, you know, we'll, we'll look at that, um, later on once we get more into those contracts and timing of those things. But, you know, some of those negotiations are, um, are well down a path that, you know, we, we hope to announce a few of those, you know, still this year, at least the initial start of those and, and early next year as well, um, on that. So we'll just, we'll see how it goes. So we wanted to be a little bit conservative on the, the 2027 numbers right now. And we'll relook at that as some of these bookings, uh, take place, you know, either later this year or early next. Understood. Uh, thanks. And then maybe if I can just sneak one more in on, um, you know, free cashflow, can you just talk a little bit about the, the drivers and in the third quarter and, and just. You know, confidence outlook for, for improvement in the fourth quarter or, uh, heading into 2027. Yeah, we can. Yeah, let me take that one. I mean, you can see how our, our conscious evil grew quite a bit, Aaron and, uh, in Q3. And, um, obviously that was just, that's a big part of it, right? It's, it's sitting in the conscious evil versus cash at the end of September. And we fully expect that to be paid in Q4. So we expect Q4 to be, uh, a pretty decent amount.

All right. Thanks. I'll, I'll turn it over.

We're seeing, I mean, they're, they're, um, I think it's actually really excited about it because it's tried to really state and it's, you know, there's a lot of market sentiment out there about data centers and other aspects, but, you know, twofold for us, we're, we're working on a number of, uh, upgrades and large projects for customers that are, that are looking either for, um, you know, uh, two, three, 400 megawatt kind of baseload generation demand where they need to put in, um, you know, and we talk about it from our. enhanced combined cycle, uh, technology, which is just reversing steam generation, um, and then a combustion turbine at a later date, um, and the, and the value of that for a lot of these utilities that really want utility grade technologies versus, you know, I'll say gimmicky technologies that are, um, you know, that we're going in that are really not made to, to work in this, um, 24 hour power demand, nor, uh, have the emission control systems like utility grade technology. So we're. We're really working with customers that want that, um, more high end quality aspect that's reliable. Um, and obviously speed's important in getting those units out in a, you know, 18 to 20 month period of time is our, our heavy focus and concentration. But we're, we're seeing a number of utilities. And I would say also large, you know, manufacturing companies that are increasing their, uh, manufacturing facilities right now, um, or building new facilities and, and we'd like to have direct power generation to,

those facilities. Um, and they're obviously because of the, the growth in the marketplace are, are looking at our technologies to deploy there on that. And, and some of those, as I mentioned, are, are, you know, well down a path and final negotiations. And hopefully we get a announcement or two out here, um, this quarter and obviously going into next year, but, um, they're, they're across the board in that area where we see, you know, especially amongst midsize utilities, some of these manufacturing, but we're obviously in, in discussions with, several that are, um, purchasing power for data centers, but as I mentioned, you know, in, in, without naming them, but, you know, in geography is probably obvious to most, but in geographies that, that's, that now support data centers and are seeking those, uh, you know, especially after the latest elections as well. So I don't know if that helps, Rob, but that's, that's, those are the kind of the heavy descriptions on that without giving names.

Perfect. Very helpful. Thank you. Uh, and then, and then you kind of. alluded to a bit of a labor issue that you've, uh, labor cost issue that you, I think you said you had your hands around, but just could you give some color on kind of the labor environment and how you're addressing that? Yeah, it's, um, you know, the, the overall labor by obviously nationwide, right? Across, uh, everything from boiler makers to pipe fitters to electricians to, uh, you know, welders and the like are, are obviously at a high demand, um, right now because of all of the, the work that's being done and, and contemplated to being done. Um, in that area. So it's, there's, it's kind of twofold. One, one is, um, you know, as we work with, uh, customers, um, of various sizes, uh, on that is that we put in the right, uh, risk management aspect of those resources. Um, you know, it's, uh, obviously when you have a shortage of resources, you get into situations where you need to increase per games and, you know, other benefits to attract, um, those high quality workers to, to various sites. and, uh, you know, for the, for the most part, we've figured out a good, um, if you will, mix of what those incentives have to be. And so it's working with customers to make sure that those are all accounted for, um, from a labor standpoint. And, and it's also, how do we work within that area, right? On specific jobs and things like that, where we need to attract a certain amount or a certain type of welder, um, and working with the, the unions to help attract that labor and to increase the,

the, hiring, um, of those, uh, labor force. And it's also working with unions to help modify, you know, certain rules and other aspects where we can, um, you know, ensure that we have availability from, from key welders from time to time, um, on certain areas. So it's, it's kind of a twofold. One is more of a contractual aspect. We're working with customers on how to manage the risk on those. Um, and, and, and that's true not only for us, it's true for the major EPC companies, the large construction companies and, you know, anyone else that's touching these data centers, uh, are all adopting, you know, different ways to, to transfer that risk and make sure that that risk isn't absorbed. Um, and we're doing the same things as well. And, you know, as we mentioned, we had one project specifically that had a labor, uh, availability issue that we've been able to work through and that project should wrap up by the end of this year. So you don't see that, that one project, you know, going into the next year being an issue at all. But, um, you know, it's, uh, that project actually started over two and a half years ago. So, uh, long before this labor shortage was ever, whatever thought of, but we've taken the necessary steps both on the contract side to defer the risk. And I think we've taken the steps to help with the unions and others to, to attract and train and continue to increase the workforce, um, to help, you know, as we plan out, you know, 28, 29 and 30 is trying to get ahead of that. And I think things, a lot of things are in motion to be able to address it and feel like that we're going to,

much better situation going forward than we were even a year ago. Okay, great. Thank you. I'll turn it over.

utility technologies bode very well. They're in markets where we have, you know, better access to labor overall. And, you know, they're in an environment where they're, the, the local markets are very supportive of data centers and want to continue to add. So we don't see the slowdown of data center requests or demand. They're actually growing as we sit here and speak, even in the last, you know, hour, there's been one or two. So it's, it's happening more based on the elections because things are just migrating to different states. That are stronger for us. And we're excited to support those the best we can. But, you know, I, I would just say we just got to get through. There's, you know, there's obviously when you get into these final negotiations, there's always a matter of, of balancing risk versus speed versus performance versus guarantees that, you know, you're constantly worked through and we're in the process of doing that as we speak. Understood. I appreciate that, Kenny. And for my follow-up, you guys used a pretty good chunk of the buyback in the quarter. What are your thoughts or comfort in reloading or continuing to utilize that given, you know, where the stock's at relative to when you guys first announced that? Thanks.

Yeah, it's huge.

I mean, it's a discussion we're having, obviously, around that based on where the stock is today. We think it's obviously very undervalued and we're thinking about additional aspects around those buybacks, you know, all the time. So nothing I could commit to on the call today, but it's something that's top of mind for sure based on where we are right now in price. All right. Well, stay tuned. I'll turn it back. Thank you.

Hey, Cam.

So, obviously, what's in the backlog doesn't reflect all that book and bill kind of business, which comes in, as you guys know, right around a couple hundred million dollars of revenue a year. I would say probably, and this is just spitballing it here, Sean, but, you know, you're probably in the range of 75% would be either backlogged today or would be the book and bill kind of stuff. Okay, great. And then on the parts side, I think revenues, you know, not necessarily up year over year, but you kind of gave some commentary that you're seeing strong aftermarket part demand. So I'm just curious, like, if you're seeing that start to flow through more, like get better comps next year from aftermarket part demand, like what you're seeing in the pipeline for that piece of the business.

I guess, can you, can you repeat that? I didn't quite, like, are you seeing something, yeah, are you seeing something in the aftermarket, you know, parts demand? Like, are you seeing that start to inflect a little bit more here and into the fourth quarter and then 2027 versus kind of the run rate it's been at, you know, for the last year? So I would expect to see a larger. Q4 and our parts and service business mainly because the backlog, the backlog, we'd have a huge booking. So we actually built some backlog there. So I would expect to see a much larger Q4 and that's typically seasonality when that happens as well. So our fourth quarter is, if not the largest revenue, it's going to be the second largest. And then same thing with Q1. So I'd expect a pretty large Q1 as well because everybody will be getting ready for their, spring outages. So they'll be buying lots of parts. So yeah, I would say definitely Q4, you'll see an uptick in revenue and parts and services. And that will spill over to Q1. Okay. I would maybe add to that. Sorry. Just to add to that, some of the opportunities we're seeing are actually taking former coal plants that have been maybe either decommissioned or that are in a more limited use basis to upgrade those. either with new boilers or other aspects in order to get those to run, again, to come out of peaker mode and part of base load generation. So when we add those plants to the fleets or increase the utilization of those plants in the fleets, that leads to more and more parts next year as well, too.

So as we are growing more and getting more parts demand, we're also adding to and seeing upgrades and projects and things that will add to the fleets that will just create more and more parts opportunities. So, thank you. I think that trend will continue. Okay, very helpful. And then on BrightLoop, with Massillion coming online late next year, I guess I'm just curious, kind of your outlook for BrightLoop. Do you think it can become a revenue contributor in 2028, or is it more of a 2029 opportunity? Like, what are you seeing in your pipeline with regards to that? You know, real, I mean, significant mature revenue. It's probably 2029, but there's a number of projects that we are working on right now that basically are relying on the fact that we'll have the TRL level on BrightLoop up because of the Maslin commercialization aspect of that. You know, we're working with the Department of Energy and a couple other clients on a couple of stations to leverage BrightLoop at this point in time and get it out on a larger commercial basis. On a couple projects. So I mentioned we have a few billion of those in the discussion phases right now. I mean, in fact, we've got a few feed studies where we're getting revenues today from BrightLoop on feed studies and other engineering projects. Side, not material, but, you know, covers the cost of the engineering work that's associated with that today.

You know, the feedback from the hyperscalers and others on BrightLoop is very positive and, you know, feel confident. That if we had it at a commercial state and a TRL level that would support investment grade, that we would actually see opportunities now for data center power and others because it does give the ability to leverage that CO2 without any increase in parasitic load. So the levelized cost of electricity, including the CO2 capture that has beneficial use, especially from coal and natural gas, is something very favorable. in the marketplace, because it would allow for minor source emissions, whether you use coal or natural gas, it allows us to leverage that CO2 for other beneficial use like enhanced oil or enhanced methane recovery. But further from that, after the CO2 is compressed, it's actually at a temperature where we can provide cooling capabilities for the data centers direct. And as you know, BrightLoop actually leverages the water from the hydrocarbon of the fuel. And therefore, it's a very low water intensive technology, including creating the cooling systems for the data centers. So there's inherent benefits that could impact that marketplace. And we're seeing those behind the scenes and those opportunities. We're also in discussions with some oil and gas companies around the use of it in production environment for the same reason. And so we're confident on the leveraging that tech once it's on.

a commercialized basis out there. And we're progressing on a couple of those opportunities so that when the technology is at the TRL level, we're ready to really get those booked and begin operating those. So, you know, anticipate maybe potentially some revenue coming in at 28, but materially it'll really hit, it should hit 29 as we come out of 27 and start to look at bookings in 28.

We have reached the end of the Q&A session. I will now turn the call back to Sharon Brooks for closing remarks.

Thank you for joining us.