Babcock & Wilcox Q3 2026 Earnings Call Transcript

Babcock & Wilcox (NYSE:BW) reported third-quarter financial results on Monday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Babcock & Wilcox Enterprises reported third quarter 2026 bookings of over $228 million, marking a 112% increase from the previous year, and a backlog of $2.5 billion, a 571% increase year-over-year.

The company repurchased $38 million of its common shares and fully paid down unsecured bonds, achieving the lowest debt levels in recent history.

Revenues for Q3 2026 were $290.8 million, a 109% increase from Q3 2025, with net income reaching $93.9 million, a $58.8 million increase, driven by improved operating income and warrant revaluation.

Babcock & Wilcox’s pipeline exceeds $16 billion, with significant growth in utility and industrial segments, including data center projects despite recent market sentiment.

The company maintains its full-year 2026 adjusted EBITDA target of $80-105 million and issues a 2027 target of $125-140 million, citing strong demand and a robust project pipeline.

Operational highlights include advancements in the North Dakota project and progress on the Bright Loop initiative, with the latter expected to support commercial deployment by late 2027.

Management expressed confidence in continued growth, supported by strong parts and services business performance and favorable market conditions for power generation technologies.

Full Transcript

OPERATOR

All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to turn the conference over to your host, Sharon Brooks, Babcock & Wilcox’s Director of Communications. Thank you. You may proceed, Ms. Brooks.

Sharon Brooks (Director of Communications)

Thank you, Chase, and thanks to everyone for joining us on Babcock & Wilcox Enterprises’ third quarter 2026 earnings conference call. I’m Sharon Brooks, Director of Communications. Joining the call today are Kenneth M Young, Babcock & Wilcox’s Chairman and Chief Executive Officer, and Cameron M Frymyer, Chief Financial Officer, to discuss our third quarter results. During this call, certain statements we make will be forward-looking. These statements are subject to risks and uncertainties, including those set forth in our Safe Harbor provision for forward-looking statements that can be found at the end of our earnings press release and in our Quarterly Report on Form 10-Q that was filed with the SEC earlier today. Additionally, as required by law, we undertake no obligation to update any forward-looking statement.

We also provide non-GAAP information regarding certain historical and targeted results to supplement the results provided in accordance with GAAP. This information, which includes our discussion on adjusted EBITDA and adjusted net income, should not be considered superior to or as a substitute for the comparable GAAP measures. A reconciliation of historical non-GAAP measures can be found in our third quarter 2026 earnings release published earlier today and in our Company Overview presentation filed on Form 8-K, which is posted on the Investor Relations section of our website at babcock.com.

Please also see our third quarter 2026 earnings release published on November 9, 2026 for more information on our bookings and backlog. I will now turn the call over to Kenny.

Kenneth M Young (Chief Executive Officer)

Thanks, Sharon. Well, good afternoon, everyone, and thanks for joining us on our third quarter 2026 earnings call. We achieved several significant accomplishments in the third quarter of 2026. Our robust utility and industrial businesses have achieved bookings of over 228 million in the third quarter of 2026, including record bookings from our parts and services business. We fully paid down our unsecured bonds and repurchased over 38 million of Babcock & Wilcox’s common shares to date.

We added over 2 gigawatts of non-data-center power generation opportunities from utility and industrial segments to our pipeline, and we now have over 10 billion in our pipeline from utility and industrial opportunities alone that directly support consumer and manufacturing power demand, and we anticipate significant bookings in the fourth quarter of 2026 and in the first quarter of 2027. These results reaffirm our full-year 2026 adjusted EBITDA target range of 80 to 105 million and support our full-year 2027 adjusted EBITDA target range of 125 million to 140 million.

In the third quarter of 2026, our pipeline, bookings, and backlog saw significant development. Our pipeline has expanded to more than 16 billion, including 6 gigawatts of new incremental power generation opportunities, and includes more than 10 billion in non-data-center power generation opportunities. We are in negotiations on several opportunities now that provide the power generation technologies required to support certain manufacturing and large protection facility customers.

Despite recent elections and capital market sentiment, our pipeline of over 6 billion in data center projects remains strong as we focus on customers and certain geographies that continue to support and seek data center developments. We are seeing strong interest from key customers that require utility-grade power technologies that will support the around-the-clock power demands of data centers while also providing dependable, scalable, and low-cost electricity.

Babcock & Wilcox is well positioned to meet those needs, and our technologies are backed by decades of experience with a proven track record of operating in some of the world’s largest and most demanding power environments. During the third quarter 2026, bookings were 228 million, which is an increase of 112% compared to the third quarter of 2025. Additionally, our backlog was 2.5 billion in the third quarter, which is a 571% increase compared to the third quarter of 2025. Our continued global demand for Babcock & Wilcox’s technologies, coupled with rising investment in power generation in both utility, industrial, and data centers, supports our positive outlook.

Turning to our core operations, our parts and services business continues to deliver strong results, benefiting from rising demand from dependable power baseload generation across North America and around the world. This growing need for reliable electricity is driving utilities to increase investment in the refurbishment, recommissioning, and ongoing operation of existing coal-fired power generation assets to enhance grid stability and to accommodate increasing electricity demand.

Additionally, discussions are underway with multiple prospective customers on large-scale projects across our business. Favorable market conditions represent a significant growth opportunity for Babcock & Wilcox, reinforcing our position as a key provider of technologies and services that support the reliability, efficiency, and long-term performance of the global power generation fleet. While we are seeing additional coal power opportunities both for new generation as well as large upgrades and enhancements, as more and more existing coal-fueled power plants are being used to meet baseload demand, we see this not only in the United States, but also in markets like India and Southeast Asia where natural gas is becoming more and more difficult to obtain for power demand. Our new generation project in North Dakota continues to advance, and significant progress has been made on permitting, with nearly all required applications submitted and county approval secured for the conditional use and zoning permits.

We are also continuing progress on our Bright Loop initiatives, including development of our commercial-scale facility in Matlin, Ohio. The manufacturing of all system components, including the various reactors, are nearly complete, and site work has started with foundations to be installed later this month and structural steel construction to begin by the end of the year. The Maslin project remains a strategic priority for Babcock & Wilcox, with planned operation in late 2027 expected to support future commercial deployment opportunities.

We believe this investment will further strengthen our leadership position in advanced energy technologies that could be deployed today and create additional foundation for long-term growth and shareholder value. Leveraging steam generation from multiple fuels such as coal, natural gas, biomass, and others provides utilities and data centers with fuel flexibility, as well as ability to utilize the captured CO2 for either enhanced oil and methane recovery, or can be utilized to assist in providing cooling for the data centers with lower water usage. We are in discussions on potential use cases of Bright Loop for data center and power generation utilizing steam turbines with further beneficial use around the isolated CO2 and minor source emissions.

In fact, we have over 2 billion in opportunities that are not in our pipeline that can leverage Bright Loop technologies within utilities and oil and gas facilities. I’ll now turn the call over to Cameron to discuss the financial details of the third quarter of 2026. Cameron.

Cameron M Frymyer (Chief Financial Officer)

Thanks, Kenny. I am pleased to review our third quarter 2026 financial results, further details of which can be found in the 10-Q that was filed with the SEC this afternoon. Our third quarter 2026 consolidated revenues were $290.8 million, which is a 109% increase compared to the third quarter of 2025, primarily driven by an increase in large project volume, including $77.8 million from our current large generation project. Operating income in the third quarter of 2026 was $13.8 million, a $10.4 million increase compared to the third quarter of 2025.

Net income was $93.9 million for the third quarter, a $58.8 million increase compared to the third quarter of 2025, driven by the improvement in operating income results as well as the revaluation of warrants. Finally, adjusted EBITDA was $17.7 million for the third quarter, an $8.3 million increase compared to the third quarter of 2025. These top-line metrics capture the recent growth we’ve seen across our business and illustrate Babcock & Wilcox’s positive trajectory moving forward.

Our gross margins for the quarter were impacted by product mix with increased revenue recognition from construction, which includes a labor availability issue on one construction project that will be completed by year-end. Although labor availability is a nationwide issue, we believe this event is isolated to one project for Babcock & Wilcox, as we have taken steps to mitigate the risk going forward. Our core project construction and parts and service businesses continue to perform well during the third quarter, driven by increased demand for power generation from our customers.

Momentum from our utility and industrial clients continues to drive strong booking performance, in addition to further backlog and pipeline development. I will now turn to the balance sheet, cash flow, and liquidity. Total debt at September 30, 2026 was $166.4 million, and the company had a cash, cash equivalents, and restricted cash balance of $128.9 million. In the third quarter of 2026, we completed the repurchase of the remaining $61.8 million in outstanding December 2026 bonds. This allowed us to achieve the lowest company debt levels in recent history. Also during this quarter, Babcock & Wilcox repurchased 38 million of common stock.

Our balance sheet remains strong and provides us with the ability to support future growth efforts. This is reflected by our ability to absorb periodic working capital increases, as will occur from time to time, and as evidenced by the third quarter working capital increase due to the short-term timing of our accounts receivables. As Kenny mentioned earlier, our results give us the confidence to issue a full-year 2027 adjusted EBITDA target range of 125 million to 140 million. With that, I’ll now turn the call back over to Kenny.

Kenneth M Young (Chief Executive Officer)

Thanks, Cameron. Well, in closing, we delivered strong operating results in the third quarter, and our core business remains well positioned for growth driven by the need for reliable baseload power and a growing focus on energy security. We believe these trends position Babcock & Wilcox well to capitalize on a broad range of opportunities, and development of our new generation project continues to progress, and we are actively pursuing additional opportunities in the expanding market.

Our project pipeline remains strong, exceeding 16 billion in potential opportunities, with bookings and backlog converting at a solid pace. We are encouraged by the continued momentum across our core markets and the opportunity to leverage our technologies and expertise to address growing demand for reliable power generation, strengthen energy security, and contribute to the ongoing evolution of the global energy landscape. I would like to close by expressing our appreciation, as always, for our employees, customers, suppliers, partners, and shareholders around the world that directly contribute to our ongoing success. And I will now turn the call back over to Chase to take three or four questions. Chase.

OPERATOR

We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Aaron Spajala with Craig-Hallum. Your line is open. Please go ahead.

Aaron Spajala (Analyst)

Yeah, good afternoon, Kenny and Cameron. Thanks for taking the questions. Maybe first for us on the North Dakota project. Can you just give us an update there? It sounds like, you know, confident in permitting progressing and just, you know, maybe an update on the project timeline and construction getting started as we head into next year.

Kenneth M Young (Chief Executive Officer)

Yeah, as you know, a lot of permitting has been accomplished and will be completed, you know, here over the next few weeks or so on the project. We are full speed ahead as it relates to the manufacturing side as we’ve been doing. Obviously the turbines and the boiler and some of the electrical aspects, also some of the balance of plant as well, continue on that side. And we’re still anticipating starting on ground or on site here in the early part of next year and well into construction towards the middle of next year.

And that will continue obviously through 2029 and going into 2030. So we’re still progressing with the customer on, you know, specific aspects around natural gas lines and other components that are being installed on the timeframes, and obviously laydown areas so we can begin shipping some of the initial items, especially some of the steel structural elements that we need to get to site as we begin the on-site work as well. So, you know, it’s progressing as we had planned and at this point in time with the customer from that standpoint, and obviously excited to really get into some of the early stuff, you know, early next year.

But everything is on track at this point in time on that project.

Aaron Spajala (Analyst)

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, including parts and services and anything else?

Kenneth M Young (Chief Executive Officer)

Yeah, I mean we, as mentioned in the comments on the quarter, parts and services for Q3 had a record booking quarter which actually surpassed 2025, which was another record booking quarter for parts and services. So honestly, we see that progressing as we go into 2027 at this stage, not only from North America, but around the world. Right. We see that demand continuing, especially in some of the coal markets that are, you know, as I mentioned in the comments, having a really difficult time obtaining natural gas.

So we’re seeing a lot of new, renewed opportunities on different things to support some of those coal facilities and have them run more past a peaker status, but, you know, actually participating in full baseload generation. So a lot of work and activities on that. We see that into our numbers next year. At the same time, you know, obviously the project in North Dakota will continue on that particular piece as it relates to contributing to 2027. But we, as mentioned, also have a number of projects and do really anticipate some bookings of significant size, 200, 300, 400 million and higher, that could potentially come here in the fourth quarter of 2026 and the early part of 2027. That will have some uptake into a little bit in 2027, but those projects will head to ’28–’29 as we move forward on some of those areas.

So as we progress on some of these bookings, there potentially could be some upside to 2027, but we’ll look at that later on once we get more into those contracts and timing of those things. But some of those negotiations are well down a path that we hope to announce a few of those still this year, at least the initial start of those, and early next year as well on that. So we’ll just, we’ll see how it goes. So we wanted to be a little bit conservative on the 2027 numbers right now, and we’ll relook at that as some of these bookings take place, you know, either later this year or early next.

Aaron Spajala (Analyst)

Understood, thanks. And then maybe if I can just sneak one more in on, you know, free cash flow. Can you just talk a little bit about the drivers in the third quarter and just confidence outlook for improvement in the fourth quarter or heading into 2027?

Kenneth M Young (Chief Executive Officer)

Yeah, we can.

Cameron M Frymyer (Chief Financial Officer)

Let me take that one. I mean, you can see how our conscious receivable grew quite a bit, Aaron, in Q3 and obviously that was a big part of it. Right. It’s sitting in the conscious yield versus cash at the end of September, and we fully expect that to be paid in Q4. So we expect Q4 to be a pretty decent amount of cash flow.

Aaron Spajala (Analyst)

All right, thanks. I’ll turn it over.

OPERATOR

Your next question comes from the line of Rob Brown with Lake Street Capital Markets. Your line is open. Please go ahead.

Rob Brown (Analyst)

Good afternoon. Just wanted to get a little more detail on the pipeline. Really outside of the data center market, what areas are sort of active? What do you kind of see there in terms of customer demand?

Kenneth M Young (Chief Executive Officer)

We’re seeing, I mean I think it’s actually really exciting about it because I’ve tried to really state that, 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 working on a number of upgrades and large projects for customers that are looking either for, you know, 200, 300, 400 megawatt kind of baseload generation demand where they need to put in, you know, and we talk about it from our enhanced combined cycle technology which is just reversing: steam generation and then a combustion turbine at a later date.

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, you know, that were going in that are really not made to work in this 24-hour power demand nor have the emission control systems like utility-grade technology. So we’re really working with customers that want that more high-end quality aspect that’s reliable. And obviously speed is important in getting those units out in a, you know, 18- to 20-month period of time is our heavy focus and concentration.

But we’re seeing a number of utilities and I would say also large, you know, manufacturing companies that are increasing their manufacturing facilities right now or building new facilities and would like to have direct power generation to those facilities. And they are obviously, because of the growth in the marketplace, looking at our technologies to deploy there on that. And some of those, as I mentioned, are well down a path in final negotiations and hopefully we get an announcement or two out here this quarter and obviously going into next year.

But they’re across the board in that area where we see, especially amongst midsize utilities, some of these manufacturing. But we’re obviously in discussions with several that are purchasing power for data centers. But as I mentioned, you know, without naming them but, you know, in geographies probably obvious to most, but in geographies that now support data centers and are seeking those, you know, especially after the latest elections as well. So I don’t know if that helps, Rob, but those are kind of the heavy descriptions on that without giving names.

Rob Brown (Analyst)

Perfect, very helpful, thank you. And then you kind of alluded to a bit of a labor issue that you’ve—labor cost issue that you had your hands around. But just could you give some color on kind of the labor environment and how you’re addressing that?

Kenneth M Young (Chief Executive Officer)

Yeah, it’s, you know, the overall labor, obviously nationwide, right, across everything from boilermakers to pipefitters to electricians to, you know, welders and the like, are obviously at a high demand right now because of all of the work that’s being done and contemplated to being done in that area. So it’s kind of twofold. One is, as we work with customers of various sizes on that, is that we put in the right risk management aspect of those resources.

Obviously when you have a shortage of resources, you get into situations where you need to increase per diems and other benefits to attract those high-quality workers to various sites. And, you know, for the most part we’ve figured out a good, 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 from a labor standpoint. 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, and working with the union to help attract that labor and to increase the hiring of that labor force. And it’s also working with unions to help modify certain rules and other aspects where we can ensure that we have availability from key welders from time to time on certain areas. So 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. And that’s true not only for us, it’s true for the major EPC companies, the large construction companies, and anyone else that’s touching these data centers are all adopting different ways to transfer that risk and make sure that that risk is absorbed. And we’re doing the same things as well. And as we mentioned, we had one project specifically that had a labor availability issue that we’ve been able to work through. And that project should wrap up by the end of this year. So don’t see that one project going into next year being an issue at all. But that project actually started over two and a half years ago, so long before this labor shortage was ever 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 attract and train and continue to increase the workforce to help, you know, as we plan out, you know, ’28, ’29, and ’30—just trying to get ahead of that. And I think a lot of things are in motion to be able to address it, and feel like we’re in a much better situation going forward than we were even a year ago.

Rob Brown (Analyst)

Okay, great. Thank you. I’ll turn it over.

OPERATOR

Your next question comes from the line of Jeff Gramp with Northland Capital Markets. Your line is open. Please go ahead.

Jeff Gramp (Analyst)

Hey, guys. Kenny, seems like you guys have a pretty good degree of confidence and optimism regarding these significant bookings or orders over the next couple of quarters. Just curious to review, like, what are the main risks you see from these? Seems like you guys are pretty far down the path here. But, you know, are there any material risks from your perspective that could derail these from a project viability or timeline perspective? Thanks.

Kenneth M Young (Chief Executive Officer)

No, it’s a great question. I mean, there’s always risk in anything until they’re signed. Right. But on that front and can’t promise until they’re signed out the door. But several of these are, well, you know, underway on these opportunities that we think will happen. You know, probably again, there’ll be initial notice to proceeds and then a full notice to proceed coming in early next year. So, you know, partial bookings and then full bookings going into Q1, which is what we’re trying to indicate.

But some of these are well down a path right now that we were in hopeful final stages of approval and to be able to get one or two of these out the door. Again, they’re in various sizes. Right. We’re working on opportunities. When I say significant, obviously things over 100 million, but, you know, 200 to 300 to 300 to 500 to. Obviously a couple of things we’re working on are much larger than that that we’ve expressed before. You know, in the data center arena, I think the great news is most of, or I should say most, but a lot of those are in with utilities and manufacturing customers that are not related to data centers. So it doesn’t have the data center overhang that you constantly hear about. But, you know, as we tell everyone at the same time, our projects that we’re working on at data centers are in markets where our 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 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 hour, there’s been one or two. So 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 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 balancing risk versus speed versus performance versus guarantees that you constantly work through. And we’re in the process of doing that as we speak.

Jeff Gramp (Analyst)

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 where the stock’s at relative to when you guys first announced that? Thanks.

Cameron M Frymyer (Chief Financial Officer)

Yeah, 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.

Jeff Gramp (Analyst)

All right, we’ll stay tuned. I’ll turn it back. Thank you.

OPERATOR

Your next question comes from the line of Shawn Milligan with Needham. Your line is open. Please go ahead.

Shawn Milligan (Analyst)

Hey, Kenny. Hey, Cam. Thanks for all the color today and thanks for taking the questions. I guess first, when you look at 2027 EBITDA, the guidance you gave, how much of that is supported by backlog versus book-and-turn business that you expect to have next year? So obviously, within the backlog, it 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.

Cameron M Frymyer (Chief Financial Officer)

I would say probably — this is just spitballing it here, Sean — but, you know, you’re probably in the range of 75% would be either backlog today or would be the book-and-bill kind of stuff.

Shawn Milligan (Analyst)

Okay, great. And then on the parts side, I think revenue is, 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 if you’re seeing that start to flow through more — like get better comps next year from aftermarket part demand — what you’re seeing in the pipeline for that piece of the business.

Cameron M Frymyer (Chief Financial Officer)

I guess, can you repeat that? I didn’t quite—

Shawn Milligan (Analyst)

Are you seeing something— Yeah. Are you seeing something in the aftermarket 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 for the last year?

Cameron M Frymyer (Chief Financial Officer)

So I would expect to see a larger Q4 in our parts and service business, mainly because the backlog. The backlog — we had 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 with that — happens as well. So our fourth quarter is, if not the largest revenue, it’s going to be 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 in parts and services, and that will spill over to Q1.

Kenneth M Young (Chief Executive Officer)

I would maybe 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 be part of baseload generation. So when we add those plants to the fleets or increase the utilization of those plants in the fleets, it leads to more and more parts next year as well.

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 I think that trend will continue.

Shawn Milligan (Analyst)

Okay, very helpful. And then on BrightLoop, with Mason coming online late next year, I’m just curious about your outlook for BrightLoop. Do you think it can become a revenue contributor in 2028, or is it more of a 2029 opportunity? What are you seeing in your pipeline with regards to that?

Kenneth M Young (Chief Executive Officer)

Real. I mean, significant material revenues 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 Mason commercialization aspect of that. We’re working with the Department of Energy and a couple other clients on a couple locations to leverage BrightLoop at this point in time and get it out on a larger commercial basis on a couple projects.

So that’s why I mentioned we have a few billion of those in the discussion phases right now. In fact, we’ve got a few FEED studies where we’re getting revenues today from BrightLoop on FEED studies and other engineering projects — not material, but, you know, covers the cost of the engineering work that’s associated with that today. The feedback from the hyperscalers and others on BrightLoop is very positive, and we feel confident that if we had it at a commercial state and a TRL level that would support investment grade, 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. 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. 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 center. 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 environments for the same reason. And so we’re confident on 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 ’28, but materially it should hit ’29 as we come out of ’27 and start to look at bookings in ’28.

OPERATOR

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

Sharon Brooks (Director of Communications)

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

OPERATOR

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

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.