Broadwind, Inc. (BWEN) | The Buildout — AI Infrastructure
The Verdict
Broadwind is a precision manufacturer. It makes gearing, gearboxes, precision-machined parts, and fabricated structures for equipment makers in power generation and critical infrastructure. Its clearest link to the AI buildout runs through natural gas turbines: Broadwind supplies components to the turbine OEMs whose order books are being filled by data-center power demand. It does not sell into data centers or to hyperscalers, so AI demand reaches it only indirectly, through its customers.
| Market Cap | — |
| Revenue (TTM) | $140M |
| Revenue Growth | −3.3% |
| EBITDA Margin (TTM) | 3.7% |
| Net Debt | $5M |
| Earnings Beats | 6 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Combined Gearing and Industrial Solutions backlog rose 93% year over year as of June 30, 2026.
- Industrial Solutions set record orders of $17.2M and record backlog of $47.4M — its eighth consecutive quarter of backlog growth.
- Gearing orders rose 138% year over year to $15.2M, with backlog at $37.6M, a fourth straight quarterly increase.
- The wind exit removes a policy-dependent business: the last tower orders complete in Q3 2026, and the Abilene, Texas facility was sold in April 2026.
- Liquidity was more than $40M at the end of Q2 2026, or $31.3M after a minimum-availability adjustment.
What We’re Watching
- Industrial Solutions EBITDA margin was nearly 19% in Q2 2026; management expects it to adjust down to more typical levels, so the peak is not assumed to repeat.
- Guidance stays withdrawn until the Abilene wind-down completes in Q3 2026, and management has not said a reinstated frame will match the prior $140–150M / $8–10M.
- GE Vernova is the only disclosed >10% customer, and management cites that customer's 18–20% growth expectation as the backdrop it believes it can keep up with.
- Management did not address whether state or regional data-center bans are affecting the pipeline, and it does not separately measure AI-driven demand.
The core business is accelerating — record orders, record backlog, and revenue growing again — while the company shrinks by design through the wind exit. Momentum looks stronger, but visibility is thinner: guidance is withdrawn, one customer anchors revenue, and the AI-linked demand is not separately measured. The open question is whether guidance returns at or near the prior scale once the wind-down finishes.
Earnings Beat
Q2 2026 revenue was $24.3M on a continuing-operations basis, up 67% year over year, with gross margin of 15.6%. The standout was Industrial Solutions, which set a quarterly revenue record of $13.2M — up almost 80% — and a segment EBITDA margin of nearly 19%. Gearing revenue rose 24% to $9.0M.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $24M | $34M | $39M | −38.0% |
| Gross margin | 15.6% | 13.8% | 9.7% | +590bps |
| EBITDA | −$0M | $2M | $2M | −106.7% |
| EPS | $-0.03 | $-0.02 | $-0.04 | −41.8% |
| Book-to-bill | 1.5x | n/a | n/a | — |
| Industrial Solutions backlog | $47.4M | $43.3M | n/a | 8th straight quarter of growth |
while we think about 30% to 40%, of our revenue in gearing, is in power gen. And a higher percentage of industrial solutions in power gen, I do not have a specific breakdown as the drivers of that demand coming from AI, but I know it is significant.— Eric Blashford, CEO, 2026-08-11
Management tone: Between the Q1 and Q2 2026 calls, management's language on the demand cycle grew more hedged: the CEO called it "the beginning of a super cycle" in Q1 and the "early stages of a sustained multiyear investment cycle" in Q2. Management was direct on backlog, liquidity, and the condition for reinstating guidance, and did not address an analyst question on state or regional data-center bans.
Management Guidance
FY2026 guidance remains withdrawn. Management pulled the prior full-year range of $140–150M revenue and $8–10M adjusted EBITDA with the Abilene sale, and had not reinstated it as of the Q2 2026 call. The CEO said completing the Abilene wind-down in Q3 2026 is the "first domino" before guidance returns, and has not said a reinstated frame will match the prior range. On segments, Industrial Solutions revenue is expected to stay above recent historical levels while its EBITDA margin adjusts down to more typical levels, and Gearing margins are expected to improve with volume.
Trajectory
Reported revenue has fallen for two straight quarters, from $44.2M in Q3 2025 to $37.7M, then $34.1M, then $24.3M — but the last step reflects the wind exit and continuing-operations reporting, not a collapse in core demand. Gross margin tells the other side: it rose to 13.8% in Q1 2026 and 15.6% in Q2 2026, from 8.3% in Q4 2025, on a higher-value Industrial Solutions mix. The forward numbers come from the order book, where combined Gearing and Industrial Solutions backlog rose 93% year over year and book-to-bill was 1.5x.
The Model
The model projects FY+1 revenue of $96.7M and EBITDA of $3M, a 3.6% margin. For FY+2 it projects revenue of $120.0M and EBITDA of $7M, a 5.5% margin. The near-term figure reflects a smaller continuing-operations base after the wind exit, growing from a core backlog that rose 93% year over year. FY+2 depends on that backlog converting into revenue, which management says is timed by customer schedules, not by Broadwind's capacity.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $158M | $97M | $120M |
| YoY Growth | — | −38.8% | +24.1% |
| EBITDA | $7M | $3M | $7M |
| EBITDA Margin | 4.3% | 3.6% | 5.5% |
Projections are the median of 5 independent model runs.
FY2026 guidance remains withdrawn. Management pulled the prior full-year range of $140–150M revenue and $8–10M adjusted EBITDA with the Abilene sale, and had not reinstated it as of the Q2 2026 call. The CEO said completing the Abilene wind-down in Q3 2026 is the "first domino" before guidance returns, and has not said a reinstated frame will match the prior range. On segments, Industrial Solutions revenue is expected to stay above recent historical levels while its EBITDA margin adjusts down to more typical levels, and Gearing margins are expected to improve with volume.
What Could Go Right — and Wrong
- Guidance is reinstated at or near the prior scale after the Q3 2026 wind-down, restoring a forward frame.
- Core order momentum holds: another quarter of record Industrial Solutions backlog and rising Gearing backlog.
- Industrial Solutions margin normalizes gently rather than dropping sharply from the nearly 19% peak.
- Defense converts from the CMMC 2.0 and AS9100 certification milestones into a disclosed revenue stream.
- A bolt-on acquisition adds power-generation, grid-hardening, defense, or aerospace capacity.
- Gearing or Industrial Solutions orders fall from record levels and book-to-bill drops below 1.0.
- Industrial Solutions margin normalizes faster or lower than management implies.
- GE Vernova demand slows and the anchor customer's 18–20% growth expectation is not met.
- Steel-plate prices and tariffs raise input costs while Industrial Solutions margin is already guided down.
- Guidance returns well below the prior $140–150M frame, confirming the pivot shrinks the near-term business.
Looking Ahead
Over the next 12 months, Broadwind finishes its wind exit and reports as a continuing-operations precision manufacturer. Management has said guidance returns once the Abilene wind-down completes in Q3 2026, and it is pursuing bolt-on acquisitions in power generation, grid hardening, defense, and aerospace. Defense stays a milestone story until CMMC 2.0 and AS9100 certifications convert into disclosed revenue, and the AI-specific share of power-generation demand remains unquantified.
- Q3 2026Wind exit complete — Last tower orders ship; continuing-operations reporting begins.
- Q3 2026Guidance decision — Tests whether management restores a forward frame.
- September 5, 2026Abilene lease ends — Facility fully vacated as the wind exit wraps up.
- 2026CMMC 2.0 certification — Could open defense revenue; no update since Q1.
- Next callBacklog-by-year split — Formal 2027/2028 conversion timing promised.
- No dateBolt-on acquisition — Would add capacity beyond the Sanford ceiling.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $143M | $158M | $140M | +10.3% |
| Gross Margin | 14.7% | 9.8% | 11.4% | 493bps |
| EBITDA | $11M | $7M | $5M | -38.2% |
| EBITDA Margin | 7.7% | 4.3% | 3.7% | 338bps |
| Net Income | $1M | $5M | $6M | +333.3% |
| Free Cash Flow | $10M | −$19M | −$0M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)11.4%
- EBITDA Margin (TTM)3.7%
- Net Margin (TTM)3.9%
- ROIC0.8%
- FCF Conversion-9.6%
- SBC / Revenue0.8%
The Company
Broadwind is a precision manufacturer of structures, equipment, and components for power generation, critical infrastructure, and other specialized markets. Its two core segments are Gearing, which makes loose gearing, custom gearboxes, and precision-machined parts, and Industrial Solutions, which provides supply-chain solutions, light fabrication, inventory management, and kitting and assembly, mainly for the combined-cycle natural gas turbine market. It also retains PRS, a modular pressure-reducing system for the compressed natural gas "virtual pipeline" market. It sells to equipment makers, not to utilities or data-center operators.
Broadwind operates out of facilities in Chicago, Pittsburgh, and Sanford, North Carolina, with more than 450,000 square feet of manufacturing space. It sold its Abilene, Texas tower plant in April 2026 and is completing its exit from wind-tower production in Q3 2026. Management describes the company as one of the most vertically integrated U.S. manufacturers of high-speed reduction gearing, and it commissioned new precision grinding and balancing equipment in Q1 2026. The Sanford Industrial Solutions plant was expanded by about 30% in the second quarter of 2026.
Business Segments
Competitive Landscape
The 10-K names competitors by segment. In gearing, it lists Overton Chicago Gear, Cincinnati Gearing Systems, Milwaukee Gear, and Horsburgh & Scott. In Industrial Solutions, it names Gexpro and other small independent companies. In wind towers — a business Broadwind is exiting — it names Arcosa as the largest North American-based competitor, alongside C.S. Wind, Marmen Industries, and GRI Renewable Industries, each with U.S. production facilities. The 10-K does not claim any sole-source position; management's positioning claim is that its precision grinding and balancing investment makes it one of the most vertically integrated U.S. makers of high-speed reduction gearing.
- Arcosa Inc.Named in the 10-K as the largest North American-based wind-tower competitor; Broadwind is exiting wind towers.
- Overton Chicago GearNamed in the 10-K as a key gearing competitor.
- Cincinnati Gearing SystemsNamed in the 10-K as a key gearing competitor.
- Milwaukee GearNamed in the 10-K as a key gearing competitor.
- Horsburgh & ScottNamed in the 10-K as a key gearing competitor.
Supply Chain
Broadwind sits one step upstream of the gas-turbine OEMs. It supplies gearing and fabricated components to those OEMs, which sell the turbines data centers rely on for power. GE Vernova is its only disclosed >10% customer. No neighbor transcript names Broadwind.
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