Ladies and gentlemen, welcome to BWX Technologies' third quarter 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, and instructions will be given at that time. I would now like to turn the call over to our host, Chase Jacobson, BWX Technologies' Vice President of Investor Relations. Please go ahead. Thank you. 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 third quarter 2025 earnings presentation that is available on the investor section of the BWX Technologies 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 BWX Technologies website. I would now like to turn the call over to Rex. Thank you, Chase, and good evening to all of you. I'm excited to report another strong quarter for BWX Technologies, showcasing the effectiveness of our battle plan strategy and our leading position in nuclear solutions for the global security, clean energy, and medical end markets, all of which are enjoying unprecedented demand. Third quarter financial results exceeded our expectations, driven by focused execution and revenue growth in both government and commercial operations. We delivered 12% organic revenue growth and roughly 20% adjusted EBITDA and earnings per share growth, alongside robust free cash flow generation. Book-to-bill was a stout 2.6 this quarter, driven by large multi-year national security contracts for the production of defense fuels and high purity depleted uranium in our special materials line of business. This led to a total backlog of $7.4 billion, up 23% from last quarter and up 119% year- over- year. Our year-to-date financial results, deep backlog, and unprecedented end market demand position us to enter 2026 from a position of financial strength. Our preliminary 2026 outlook calls for another year of record financial results, with a posture to exceed our medium-term financial targets. Turning to segment results and market outlook, government operations revenue was up 10%, and adjusted EBITDA was up 1%, both ahead of expectations. In the naval propulsion business, our teams are intensely focused on meeting delivery commitments for submarine and aircraft carrier programs and driving operational excellence. In addition to traditional process optimization strategies, we are finding new ways to leverage artificial intelligence and advanced manufacturing to drive efficiencies around quality control and workflow in our facilities that will lead to improved productivity, throughput, and margin performance. Technical services is on a growth trajectory powered by a win streak that unfolded over the last several years. Our team began transition for the Strategic Petroleum Reserve M&O contract in early October, and the BWX Technologies-led joint venture, which includes Kinectrics, is in the preferred bidder period, which is the transition period for management and operations of the Canadian Nuclear Laboratories. We expect to assume full operational control before the end of the year. In microreactors and advanced nuclear technologies, the market is evolving positively. We are currently manufacturing the reactor core for Project PELE, which is on track for delivery in 2027. Related to PELE, last month, the Army announced the Janus program, which aims to deploy a nuclear reactor on a military installation no later than September 2028, building on lessons learned from Project PELE. BWX Technologies' qualifications should be a differentiator for Janus and other important national security projects that are within our cost and capital risk tolerances. During the quarter, we announced a collaboration with Kairos Power to commercially optimize TRISO nuclear fuel production. We are excited to have a partner that is aligned with Google. BWX Technologies is currently producing TRISO fuel for Project PELE and a variety of other customers and will continue to evaluate options to enter the commercial market on a larger scale as the demand for advanced reactors grows. Lastly, over the last several quarters, we pointed to our special materials business line having some of the most exciting growth opportunities within the company. I'm pleased to say two of these opportunities, both within and in the NNSA, materialized during the quarter. First, we were selected for the defense fuels contract valued at $1.5 billion to establish a domestic uranium enrichment capability for defense purposes. We booked the first task order under the contract. We are building a centrifuge manufacturing development facility in Oak Ridge, Tennessee. Over the next several years, our focus will be on centrifuge manufacturing and designing and licensing a plant for defense uranium enrichment. Second, we were awarded a $1.6 billion 10-year contract to supply high purity depleted uranium to the NNSA. This is a direct result of our foray into special materials and our deliberate strategy of expanding into the depleted uranium assay through the AOT acquisition. Under this contract, we will build a manufacturing plant adjacent to our existing facility in Jonesboro, Tennessee, capable of producing up to 300 metric tons of high purity depleted uranium per year that will be used for multiple defense purposes. These are both exciting long-term projects for BWX Technologies, not only for the revenue growth, but also the demonstration of trust our customers put in BWX Technologies to execute on mission-critical national security programs. Turning now to commercial operations. Reported revenue grew 122% and organic revenue grew 38% year over year, driven by the Kinectrics acquisition, strong growth in commercial nuclear power, and medical isotopes. BWX Technologies medical revenue grew double digits, driven by PET and other diagnostic product lines, for which the outlook remains favorable. We expect this trend, along with the increasing therapeutic isotope sales for clinical trials, to support continued revenue growth in 2026. Consistent with our commentary last quarter, the PET-99 development is progressing nicely and is on track for an FDA submittal in the near future. In the therapeutics market, Kinectrics commissioned four new electromagnetic isotope separator units that increased production capacity of Ytterbium-176, the precursor material for Lutetium-177, to over 500 grams annually. This expansion reinforces our role as a global supplier of highly enriched stable isotopes needed for cancer radiotherapy. Turning now to commercial power, where demand is very strong and our opportunity set is expanding across various geographies and with many of the leading reactor technology OEM providers. In the CANDU market, we have a deep backlog of heavy nuclear components supporting life extensions in Canada, including the 48 generators for the Pickering life extension, which are driving significant revenue growth this year. Beyond that, BWX Technologies and Kinectrics are tracking opportunities for international CANDU life extensions and the Canadian new builds we have discussed in the past. Cover large-scale opportunities, including the Westinghouse AP1000 and multiple SMR projects. In the SMR sector, we are a key partner with the majority of leading technology providers in this rapidly expanding market. To this point, we recently signed a contract with Rolls-Royce to design steam generators for its SMR, along with an MOU for the manufacturing phase, highlighting the power of our merchant supplier position in the market. With that, I'll 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. Third quarter revenue was $866 million, up 29%, driven by both segments. Excluding contributions from acquisitions, organic revenue was up 12%. Adjusted EBITDA was $151 million, up 19% year over year, driven by robust double-digit growth in commercial operations, a modest increase in government operations, and lower corporate expense. Adjusted earnings per share were $1, up 20%, driven by strong operating performance. Non-operating items were neutral on a net basis. Our adjusted effective tax rate in the quarter was 23.6%, and we continue to expect a tax rate of approximately 21% for the year. In 2026, given a greater percentage of international earnings following the Kinectrics acquisition, we expect our tax rate to be slightly higher year- over- year. Third quarter free cash flow was $95 million, driven by solid earnings performance and timing of cash receipts from major awards. We anticipate free cash flow in 2025 to be approximately $285 million, the high end of our previous outlook range. Capital expenditures were $48 million in the quarter and $114 million year to date. We anticipate full-year CapEx to be approximately 6% of sales, indicating an increase in the fourth quarter due to timing of spend on growth initiatives, including capacity expansion for commercial nuclear and a number of smaller projects in our government business. In 2026, we expect CapEx to remain at 5.5%-6% of sales, supportive of our longer-term growth outlook. Moving now to the segment results on slide six. In government operations, third quarter revenue was up 10%, driven by naval propulsion, long and fleet material procurement, special materials, and a roughly 3% contribution from the AOT acquisition, partially offset by a decline in microreactor volume. Adjusted EBITDA of $118 million was up modestly compared to last year, resulting in adjusted EBITDA margin of 19.2%. We expect government operations revenue to be up mid-single digits organically in 2025, plus just over 2% contribution from the AOT acquisition, slightly ahead of our previous outlook. We continue to expect adjusted EBITDA margin of approximately 20.5%. Turning to commercial operations. Revenue was up a robust 122%, driven by contributions from the Kinectrics acquisition. Organic revenue growth was 38%, driven by strong year-over-year growth in our commercial power business and double-digit growth in medical. Adjusted EBITDA in this segment was $36 million, up 163%. This results in adjusted EBITDA margin of 14.2%, a nice improvement compared to our first half results and up from the 11.9% in the same quarter last year. Margin expansion was driven by solid operational performance and more favorable mix compared to recent periods. We now anticipate 2025 commercial revenue to be up approximately 60% compared to last year, driven by high teens organic growth and contribution from Kinectrics, which is performing slightly ahead of our expectations since the closing of the acquisition in May. We expect segment adjusted EBITDA margins to be approximately 13.5%. Below end of our previous range due to the timing of the recovery of higher material procurement costs, which acutely impacted our results in the first half of the year. Turning to our consolidated guidance for the remainder of 2025 and our preliminary outlook for 2026. In 2025, we anticipate adjusted EBITDA to be approximately $570 million, the midpoint of our previous range. However, we now expect adjusted earnings per share to be $3.75-$3.80, up 7.5% at the midpoint, given the benefit from non-operating items, including foreign currency gains and slightly lower interest expense. Looking to 2026, we anticipate another year of strong financial performance with low double digit to low teens adjusted EBITDA growth, yielding high single digit to low double digit adjusted earnings per share growth, given modest non-operating headwinds. This should lead to another year of solid cash generation, although near-term working capital investments related to the significant growth in our business will likely lead to flat to slightly higher free cash flows. In our segments, government operations revenue is expected to grow in the mid-teens, led by growth in special materials and supported by higher revenue in naval propulsion and micro-reactors. Of note, the defense fuels program and HPDU will account for over half of the segment's growth in 2026. This growth includes a significant amount of what is essentially customer-funded CapEx to build the unique infrastructure required for these programs, meaning they are expected to have below average margin in the first phases compared to the rest of our special materials portfolio. As such, we anticipate government operations' adjusted EBITDA to grow in the high single-digit percentage range compared to 2025, ahead of our medium-term outlook for mid-single digit growth in this segment. In commercial operations, we anticipate another year of robust revenue performance with low double digit organic revenue growth plus contribution from Kinectrics. We anticipate adjusted EBITDA growth to outperform revenue growth, driven by better margins due to the favorable mix and solid execution. Overall, we had a strong quarter, and we are well positioned for another year of record financial results. Our backlog is robust. We have good visibility into the future, and we remain focused on driving improved margin performance and cash generation in our business. With that, I will turn it back to Rex for closing remarks. Thanks, Mike. It is an exciting time for BWX Technologies. The secular trends of decarbonization, electrification, and data center power demand, combined with an increasing appetite for nuclear solutions in the national security space, are meaningful tailwinds to BWX Technologies. We are proud of our strong market position and the customer trust we have earned, built upon the expertise of our workforce, our differentiated infrastructure and credentials, and our strategic organic and inorganic investments. We are winning in our core businesses and expanding into new and exciting areas. During this period of exceptional growth, we are doubling down on operational excellence focus and expanding its application across the entire BWX Technologies enterprise. We are driving further process improvements and increasing the use of industrial automation and artificial intelligence to optimize cost structure, product quality, and cash generation to maintain our winning position and drive shareholder value. And with w e 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 * 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press * 1 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. We do request for today's session that you please limit to one question and one follow-up question only. Thank you. First question comes from the line of Pete Skibitski with Alembic Global Advisors. Your line is open. Good evening, guys. Nice quarter. I guess for anyone, you know, certainly on an absolute basis, this is one of the bigger revenue beats of consensus that you guys have ever had, I think. Just wonder if you could clarify, did you book any revenue on the two new contracts in the quarter? I know it went into backlog, but did you book any actual revenue on those two new ones? Just kind of the modest full-year sales guidance increase implies a fourth quarter that will be down pretty sharply sequentially. I'm wondering if you could explain that also. I don't know if there's some conservatism or something else. I'll stop there. Yeah, thanks, Kate. As it relates to the new contracts, very, very modest contributions, so not a big driver here. One of the things I think that you're seeing a little bit, and we've seen this trend this year in the second and third quarter, is the seasonality around some of our large material procurements. If you remember what we've discussed in the past is as we enter into our pricing arrangements, we ultimately will work to get some of those long lead material procurements done as quickly as possible to lock in pricing. We've been working to try to do that in the second and third quarter. We were able to accomplish that a little bit earlier this quarter in comparison to when we had originally forecasted it in the fourth quarter. That is why you're seeing, you know, a large feat this quarter and ultimately a little bit of seasonality in the fourth quarter just as some of those material procurements have shifted to the right. I would say outside of that, we're seeing really strong performance in the shops, and we're continuing to see them outperform both on our government ops and our commercial ops segment. We're very encouraged by that and highly focused on driving continued operational excellence initiatives within the factories. Okay, just one last one for me, maybe for Rex. Hey, Rex, in the new Janus program. It seems like this is supposed to be kind of a co-co arrangement, which I know you guys typically do not like to actually operate reactors in the field. I am wondering kind of what the approach is going to be for BWX Technologies here. And maybe it is just a simple team agreement is all that is needed, but was curious as to your thoughts on that. Yeah, hi, Pete. We certainly do intend to compete for that Janus program. It's very interesting. The government's obviously looking at putting a number of reactors at a number of different sites, and I think they'll pick at least two contract teams for that. Yeah, we typically don't own and operate reactors. You know, that's normally the job of the nuclear utility. So it'll be a matter of finding the right teammates to go after that opportunity, but we'll do that and we'll go in and compete hard for it. Got it. Thanks so much, guys. Thank you. Our next question comes from the line of Robert Levick with CJS Securities. Your line is open. Hi, this is Will on for Bob. With six months or so under your belt now, what are the key takeaways from the Kinectrics acquisition and what are some of the new market and revenue synergy opportunities? As I said on the call, Kinectrics is outperforming so far. In fact, you know, I might speak more broadly and just say the two acquisitions that we did this year, the Jonesboro acquisition, AOT, and the Kinectrics acquisition are both outperforming. I think, frankly, we created a lot of value there. We bought both of those businesses well within our multiples, and both of them are doing quite well for us. For Kinectrics itself, the outperformance relates to the transmission and distribution business, which is growing very smartly right now because of two things going on there. One is the aging infrastructure requires a lot of testing, so we're doing that. Then we've got a nice business in offshore wind cable testing, particularly focused in Europe. We're seeing outsized growth there. The life extension programs at the Pickering plant are creating a lot of opportunities that Kinectrics is well suited for, so we're attacking that one. Finally, you know, we're seeing some business, sizable business around licensing support to the Canadian nuclear utilities for the new build large projects, large reactor projects in that market. I find that encouraging from multiple perspectives, obviously for Kinectrics itself, but I think that demonstrates the seriousness of the nuclear utilities to proceed with their plans for large nuclear reactors. You know, a lot of goodness in the Kinectrics business, and it's a really great match for BWX. I might add that, by the way, that medical business of theirs is doing very nice, and there's a lot of talent in that part of the business, which has been helpful and synergistic to BWX Technologies Medical. Thank you. Just one more. With the exponential increase in the focus on energy production and security, where are the biggest and nearest term opportunities for BWX Technologies to participate in the growth in nuclear energy? How are you prioritizing investment into so many opportunities? Yeah, I'd say we see demand everywhere. We see it on the commercial side of the business. We see it on the government side of the business. If you're speaking to commercial power in particular, I'd say the opportunities in order are kind of, you know, small modular reactors everywhere. And you know that we face the market as a merchant supplier. We participate on the X300. We participate on the TerraPower Natrium reactor. We did a deal with Rolls-Royce, so we're supporting that reactor and steam generator design and ultimately manufacturing. That and the geography is, you know, Canada, US, Europe, and Poland, and the U.K., and other places. That one is super interesting to us. I do expect to see SMR announcements in the U.S. in the fairly near future. I'd say the large reactor opportunities are expressing pretty strongly based on what I just said about the plans in Canada. I think they'll build at least eight, you know, CANDU derivative large reactors at Wesleyville and at the Bruce site. Obviously the Westinghouse announcement for $80 billion worth of reactors in the U.S. is, I think, quite a positive sign for the industry as it relates to capacity and the need for that. We're actively bidding on 81,000 components kind of every day. That's in the commercial side of it. Now, Pete mentioned the Janus program, which is a, you know, kind of a quasi-commercial program because it's a contractor-owned contractor-operated facility for U.S. military sites. That one's interesting in itself. Of course, we see commercial outlets for TRISO, growth in nuclear medicine. It's everywhere. Thank you. Well. Next question comes from the line of Peter Arment with Baird. Your line is open. Hey, good afternoon, Rex, Mike, Chase. Nice results. Could you, Rex, on the two large contracts that you booked in the quarter, the uranium enrichment and then the depleted uranium awards, I think Mike mentioned that there's just going to be some government-funded CapEx to help stand some of that up. How does the revenue kind of cadence roll out when both of those programs kick off? I guess related to that, Mike, you said it would probably initially come in at some lower margins. Just how long of a period does that last? Thanks. Yeah, for both of those contracts, they're kind of over an extended period of time. I think for HBDU, we announced 10 years and induced, we've talked about that being a roughly 10-15 year program. We will see a little bit of front-loading as we build up kind of the infrastructure investments on those in the early parts of the year. Generally speaking, they're pretty distributed over the life of the period of performance. You know, maybe a little bit weighting early, but certainly not significant. It will be relatively distributed over those 10 or 10-15 years, depending on the contract that you're talking about. Those contracts are structured as fixed-price programs. As you know, we typically will enter into kind of a base-level margin percentage and then ultimately work to outperform those over a period of time. Our special materials business has had a long history of being able to outperform. Typically, we do not make any of those kind of large-scale adjustments from an EAC perspective until we're probably around 25% or more on the contract. I would expect that the kind of lower margin to last for the first couple of years. Ultimately, you know, we would be highly focused on driving improvement in that EAC and being able to recognize a higher profit. Appreciate that color, Mike. Rex, just on Project PELE, could you just give us the latest update on how that's going? Because it sounds like you said delivery in 2027. I thought that was, is that later than previously planned? Just give us any more updates there. Thanks. Yes, Peter, that is later than the contract originally called for. You know, that said, the requirements for that program have been evolving, particularly the role of the national labs in that. It is not unexpected. The program's doing very nicely. We are assembling the reactor core down in Lynchburg, Virginia right now and do expect to deliver that reactor and that fuel to Idaho National Laboratory in 2027. They will fire it up and test it out there. The program's going great. Thanks, guys. Nice results. Thanks, Peter. Next question comes from the line of Jeffrey Campbell with Seaport Research Partners. Your line is open. First of all, congratulations on the strong quarter. Regarding DUSE, the press release announcing the $1.5 billion award said that the pilot plant will demonstrate LEU production for defense missions before being repurposed to produce HEU for naval propulsion applications. To be clear, will the capabilities to produce HEU be accomplished in the current appropriation, or will it require additional funding? That initial tranche of funding is about licensing. Licensing and preparation for the high-enriched uranium cascade, which ultimately will be based at our fuel services business in Erwin, Tennessee. That combined with a centrifuge manufacturing development capability that we are doing up in Oak Ridge, Tennessee. So that actually, the first tranche of funding does not relate to the production of the material itself. Okay, thanks. Yeah, thank you. Regarding the four new second-generation electromagnetic isotope separator units that you announced being commissioned by Kinectrics, does the entirety of that 500 kilogram of ytterbium output now belong, or will it belong to BWX Technologies Medical? And were there any noteworthy differences between the first and the second-generation EMIS units? Yeah, that's 500 grams of output, the Ytterbium-176, which of course is the base material for lutetium-177. It's an important precursor for that nuclear medicine product. There's no essential difference between this generation and the prior generation. It's really just an increase in capacity of about 500%, by the way. It's an impressive capability. We haven't integrated Kinectrics' medical business into BWX Technologies' medical business for some good reasons. Those businesses are supporting one another, and we're finding strategic synergies there that are pretty powerful. Okay, thank you. You're welcome. Next question comes from the line of Scott Deuschle with Deutsche Bank. Your line is open. Hey, good evening. Mike, could you slice up the chipset value of the steam generator content you won with Rolls-Royce? We have not given specifics around that. I think, you know, Scott, when we talk about the SMR opportunity with Rolls, we have discussed kind of similar to the rest of our SMR, you know, in the $50 million-$100 million range. I think we are, you know, squarely in the middle of that as it relates to the Rolls content. We feel comfortable kind of being in that range from a Rolls perspective, but we have not disclosed, you know, the specifics. Okay. The press release announcing that discussed a localization plan for future manufacturing work. I think most of what Rolls-Royce is currently bidding on is for reactors in Europe. Is the implication here that you may elect to build out a manufacturing footprint in Europe if the demand is there? Yeah, I think, Scott, we were evaluating that and other opportunities for localization. That seems to be the trend in commercial nuclear power. So we certainly are considering it. Okay. Last question, and sorry to be a pig, but Mike, can you walk us through the puts and takes on 2026 free cash flow that result in that guide of flat to slightly up? I heard some of the pieces in the script. I'm just curious if you could put a bow on it for us. Yeah. So I think, you know, we've seen a pretty significant step change over the last couple of years. As we mentioned in our investor day, our kind of medium-term outlook was to see, you know, a continued kind of one-day and call it cash conversion cycle days, which is the internal metric that we use. That's roughly about a $10 million improvement each year. We've seen a sizable improvement going from 2023 to 2024 and then from 2024 to 2025. You know, if you remember, we started the year at low end of the range of $265. Now we're guiding to $285 approximately for 2025. Part of this is driven by some of these investments in the newer contracts. We were able to negotiate some milestones on DUSE and HBDU that are hitting in the fourth quarter of 2025, which is good, but it creates a steps function as you look into next year, in just the timing of when you get to that next milestone. And so that's a little bit of what we're seeing. In addition to that, you know, we do have, we're going to be on the a little bit higher end of the range on CapEx. You know, we went up to 6% for this year. We'll be 5.5%-6% of revenue for next year. So you're seeing a little bit of, you know, CapEx as we continue to invest in our growth initiatives across the board. And so when you kind of take a look at that, you're seeing that. Basically, we're going to end up flat based on even though we'll have a probably one-day working capital improvement that's going to be offset by, call it, $10-$15 million of timing related to kind of milestone payments for some of these larger new contracts. Thank you. Next question comes from the line of Jeff Grampp with Northland Securities. Your line is open. Evening, folks. Thanks for the time. I'm curious, when we look at this 2026 outlook, what do you guys view as kind of the main risks to achieving that outlook? And then maybe this is more of a 2025 discussion point, but does an extended government shutdown represent a risk at all to this year's or next year's outlook? Thanks. Yeah, so. I think I'll start with the second question just on the government shutdown. And just to clarify that the majority of the impact of our government shutdown is specific to our technical services part of the business within government operations where we run, based, you know, different joint ventures with external partners to do M&O and other environmental cleanup on DOE sites. I think the teams have done a great job of managing funding. The majority of our sites are fully operational still at this point. And, you know, we're kind of making sure that we're continuing with the mission. I would say we have not contemplated a long-term shutdown in our guidance. To the extent that we're seeing an extended shutdown, I don't see that as a major driver for 2025, but I would say that that would create some risk if it extended into 2026 for an extended period of time. As far as kind of the puts and takes from next year, I would say, yeah, from an opportunity perspective, we continue to focus on operational performance and OpEx initiatives, which we've discussed a lot. When you look at our kind of guidance for next year, we are still working through some of the old pricing agreements. I mentioned last quarter that, you know, I anticipated some of that to continue in through 2026. To the extent that we can drive continued performance in the business and we're able to, you know, see that productivity, we could have some upside as it relates to opportunities and EAC potential write-ups. We have not assumed a substantial amount of EAC write-ups in our current guidance. In addition to that, you know, based on the timing of some of the new special materials contracts we've seen, you know, earlier this year, we had strong performance in those contracts. We'll continue to focus on performing well on that part of the business, and so that could result in, you know, ultimately some opportunities to the guidance that we've laid out. From a risk standpoint, I would say a lot of this relates to just kind of the overall timing of our commercial nuclear opportunities. You know, we're seeing a flurry of activity in RFP and RFIs, and we certainly have a decent visibility into when the timing of those orders are. If you had some delays in the timing of those orders, it could have an impact or create some risk for next year. We always will highlight just, you know, defense spending. You know, we haven't seen a major impact on that, but that's always a potential risk. I mentioned the extended government shutdown that could be also a potential risk. Those are the big puts and takes. Awesome. I appreciate that thorough answer. That's really helpful. It kind of ties into my follow-up. Rex, you mentioned, you know, this demand market is being unprecedented. It seems like the last couple of quarters have been more headlined, more on the government segment of the business. I'm curious how you see the commercial side playing out, the potential acceleration there. I mean, it sounds like the pipeline is robust. Maybe is this something that you guys think kind of materializes or accelerates from a kind of order backlog standpoint over the coming quarters? Or do you have that level of conviction or insight at this point in the cycle? No, I do think, Jeff, that we'll see that order start to accelerate. I think, you know, obviously the Westinghouse announcement was maybe the first domino to fall. If you look at small modular reactors, OPG seems committed to building out those four. We'll see who the next, we'll see what the next announcement for SMRs is in the U.S. I think that should be Tennessee Valley Authority or another nuclear utility. There's a lot of chatter about that. I do fully expect the nuclear utilities in Canada to go forth with the large builds pretty soon. Like I said, we have task orders, contracts already to study the licensing for those CANDU derivatives. A lot of things are falling into place, a lot of announcements, a lot of demand. I think next year for this business will be more about commercial orders and commercial announcements than about government orders and announcements which characterize 2025. Got it. Great. Thank you guys for the time. Appreciate it. You're welcome. Next question comes from the line of Michael Ciarmoli with Truist Securities. Your line is open. Hey, evening, guys. Thanks for taking the questions. Maybe, Rex, not to derail things, but maybe talk more about, I guess, the boring portion of your business. No one's asked about. Navy subs, shipbuilding, and just kind of general thoughts. You know, Mike, I heard you talk about the CapEx. I think we still have a commitment to AUKUS out there, but any kind of general update on kind of what you're seeing in terms of, you know, VA, Columbia cadence, you know, how you're thinking about, you know, whether or not AUKUS flows in at some point, do you need more CapEx or more capacity? Yeah, thanks for the question, Mike. I think it's taken quite a positive turn here in the last quarter. Our boring business in naval nuclear propulsion. You know, AUKUS had been in question because it's being examined by the Department of Defense, but you saw the, you know, the sort of love fest between the Australian Prime Minister and the President. It looks like AUKUS is absolutely going forward now. We're also seeing, at the same time, we're seeing positive things at the shipyards at both GD and HII seem to be turning the corner on production. I think that's quite a positive for all of us. Then, of course, there's that announcement, that surprise announcement about South Korea. The idea that the South Koreans have built a shipyard for nuclear-powered submarines in the U.S. Now, that thing, excuse me, that theme is not well formed from my perspective, but we don't know what that looks like yet. You know, but to the extent that the U.S. is involved in the nuclear propulsion system, that could be an interesting opportunity for us. I see a lot of upside in the business relative to a couple of quarters ago. We do need more capacity to meet the demand for the AUKUS program. We do have CapEx projects that are underway with our customer and naval reactors for that purpose. There's been that going on already. Full steam ahead. Got it. Got it. And then just one more, Mike, I think I've got this. I mean, the implied government EBITDA margins, you know, look to be down next year. Sounds like it's just the front-end loading of some of that lower margin work and, you know, maybe even some of the other pilot progression projects. Is anything changing, you know, with that core navy business, or is it really just kind of some lower margin startup contracts that's weighing on the margins? No, that's exactly right. You're, you know, if you look at 2026, most of it is mixed pressure. Half of the revenue growth is driven by DUSE and HBDU. And as we mentioned, we start off at a, you know, pretty low margin. And then would anticipate, you know, higher positive EACs in the future. I would say in addition to that, we're still dealing with a little bit of just the burn-off of the pricing arrangements that we had entered into shortly before COVID, before we saw significant labor costs and those types of things. As I mentioned before, that mix will start to change next year. You know, as we work through that and into the new pricing arrangements that we just recently entered into. We're hopeful that we're going to focus on that. The other thing I would just say is we're highly focused on operational excellence initiatives, and we have a large focus on margin improvement that we're going to be driving into the business. We continue to focus on that every day. We'll continue to make investments to drive performance in the business, and hopefully we'll be able to outperform and see some positive EACs next year. Got it. Helpful. Thanks, guys. Next question comes from the line of Jed Dorsheimer with William Blair. Your line is open. Hey, thanks for taking my question. Yeah, I'll echo the other sentiments. Congratulations on a great quarter here, guys. I guess just first one, if I just kind of unpack the, you know, commercial growth, I noticed that you had separated out growth from Kinectrics and specifically in your radiopharma business. You know, that supply with Novartis, it looks, you know, Pluvicto got off-label from pre-chemo, which expands. My question is, were you supply constrained in the quarter in terms of, you know, at the precursor or for the Lutetium-177? You know, previously you had talked about, I think, 30-plus phase three. I'm just wondering how we should expect radiopharma growth and whether or not that was limited by the capacity. Yeah, I don't, hey, Jed, I don't think we were supply constrained for that product. You know, we're pretty far downstream. We do the base material, the Ytterbium-176 and Lutetium-177. We don't produce the active pharmaceutical ingredient that goes to a customer upstream of us. You know, we don't feel, we're not in a position of supply constraint for that product. As to how that's going to grow, I do expect Lutetium growth to continue to accelerate. I can't predict that one for our business right now, but certainly there will be higher demand in the future. Got it. And then just sticking with commercial, but switching to the reactor side. It sounds, you know, if you received an RFP for, you know, a Rolls-Royce SMR, for example, just as an example here, or even for, you know, an AP1000, you know, that would obviously drive the backlog, but would not contribute anything to growth next year. Is that correct? I just wanted to make sure that it seems like that would be the case, but just wanted to confirm it. In other words, 2026 is a year of, you know, RFPs, wins. And, you know, while most of the reactor side would be Bruce and OPG up in Canada, correct? Yeah, that's correct. Yeah, that's correct. Yeah, we don't have a lot of that kind of scope in the forecast, if that's what you're asking. Yeah, you know, f from my. Yeah. Right. From my perspective, the growth numbers that we put out there for 2026, those kind of early targets for growth. I don' t see much, I mean, I frankly don' t see much risk on the revenue side because we book so much business in naval reactors, special materials, and even on the commercial side and on the medical side. It is a low-risk outlook from the standpoint of revenue. We just need to drive margins. Yeah, anything that we would get on the commercial side, say from the AP1000, would be additive to that. Great. Thanks, guys. Thank you. Next question comes from the line of Andre Madrid with BTIG. Your line is open. Rex, Mike, Chase, good afternoon. Hey, good afternoon. Could you maybe give us a status update on Draco? I know you said last quarter it kind of lives on through NASA, but we did see you guys call out some weaker micro reactor volumes in the quarter, and I wanted to know if it was attributable to this. Yeah, that's exactly right. The Draco program devolved into single agency support. It was DARPA, it was a DARPA and NASA joint program. Now it's a NASA nuclear thermal propulsion program called Sentry. The funding hasn't really shaped up for that in a meaningful way yet. We do have some task orders under that contract, and we're able to keep our team together, but it's a lower level of revenue. It's hard to predict what the outcome of that will be. Certainly, NASA seems to be focused on lunar efficient surface power right now, and we've assembled a team to go attack that opportunity. Nuclear thermal propulsion is still a need on the civil space and national security side. I do think that program goes forward in some form in the future. It's just hard to predict right now. Got it. Got it. No, that makes sense. Mike, on, I think you called it out earlier, but on the $80 billion nuclear partnership that was recently announced, I mean, what gains could be, you know, captured there, if any? I mean, how do we assess that opportunity for you guys if it is an opportunity? Yeah, I don't think, I mean, we haven't given specific guidance on what the size of that opportunity is at this point. I would just add to that that the opportunity there is for component manufacturing, which is obviously right in our sweet spot. It could be, you know, steam generators, reactor pressure vessels, those kinds of things. I think the opportunity set's pretty interesting, but it's not specific yet. Got it. Got it. Super helpful. I'll leave it there. Thanks, gentlemen. Next question comes from the line of Ron Epstein with Bank of America. Your line is open. Hi, good afternoon. This is Alex Preston on for Ron today. I was just curious on M&A, right? Obviously, talked through a couple of times AOT and Kinectrics performing really well. Curious if you could just walk us through a little bit about the environment you're seeing, any appetite going forward for more investments. It seems like you'll be well within your sort of two to three times leverage range going even to like the end of the year. Yeah, then maybe I'll make a broad comment about that and then flip it over to Mike. We've been historically pretty picky about doing acquisitions because our philosophy there is to go and get things that amplify our strategic intentions in the nuclear space. I think that means you're necessarily limited on the number of targets. That said, we did a couple of really good ones this year with Kinectrics and AOT, and we've done some very good ones in the past. Nordion was a good acquisition for us. The GE-Hitachi assets in Canada, very good acquisition for us. I would say that we are interested in acquiring right now because, as I said on the call, or as I said in one of the answers, we certainly can get assets within our multiple. You've got an opportunity to create value there. We're continuing to look. I think it's super interesting and we'll acquire if it matches what we're trying to do strategically. Otherwise, we'll stay away from it. Yeah, and I think we feel comfortable where we are from a leverage standpoint. One of my priorities is to continue to clean up some of the balance sheet and create some capacity and dry powder to be opportunistic about acquisitions going forward. Got it. I appreciate the color. Thank you. Next question comes from the line of Pete Skibitski with Alembic Global Advisors. Your line is open. Yeah, just a quick housekeeping question, I guess, for Mike. Mike, the $15 million step up in DNA in 2026? This is a small EBIT impact, but I'm just wondering, does that relate to the two new contracts in government or is it, you know, from Tech 99 or something completely different? It's not related to either. I mean, part of this is the timing difference between when we get recovery under, you know, cost accounting standards and financial accounting standards. No major step changes that relates to Tech 99. That will not happen until that program has gone through full approval. From the initial investments that we've been doing related to the new contracts, you know, we're starting to spend that, but those are not placed in service. You are not going to see, you know, a significant step up of that in 2026. That will kind of bleed in over a period of time. Got it. Okay. Thank you. Our last question comes from the line of Scott Deuschle with Deutsche Bank. Your line is open. All right. I saved this question for the end of the call because it's probably where it belongs. But Rex, is rare earth handling or processing at all an area of strategic interest to the company, given your existing experience in the handling and processing of hazardous materials? Thank you. I do not think so, Scott. You know, our capabilities are around special nuclear materials and the materials handling and the accountability systems that go with that. We just are not involved with rare earths typically, I mean, apart from, you know, Ytterbium-176, but just not in our playbook. I would say the answer to that is broadly no. Okay. Thank you. You're welcome. That concludes the question and answer session. I would like to turn the call back over to Chase Jacobson for closing remarks. Thank you, Desri. Thank you, everybody, for joining us today. We appreciate your questions. We appreciate your interest in BWXT. We look forward to seeing many of you and speaking with you in the coming days and weeks and seeing you at investor events. If you have any questions, please reach out to me at investors@bwxt.com. Thank you. Ladies and gentlemen, that concludes today's call. Thank you all for joining in. You may now disconnect.