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Aebi Schmidt Holding AG (AEBI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered a profitability step-up: Adjusted EBITDA rose 25% year over year to $42.2m (9.0% margin, +160 bps y/y), driven by North America’s 10.2% margin and accelerated synergy realization, while sales were $471.3m (+3% y/y, +4% q/q) .
  • Versus consensus, EPS beat and revenue missed: Primary EPS $0.20* vs $0.13*, while revenue $471.3m vs $488.1m*; EBITDA $33.2m* vs $36.6m* reflects definitional differences vs company’s Adjusted EBITDA ($42.2m) .
  • Backlog and order momentum are strong: Order intake +33% y/y; backlog increased 6% since June to ~$1.13B, expected to convert to revenue within 15 months and underpin a stronger Q4 and 2026 growth .
  • Guidance reaffirmed: FY25 sales $1.85–$2.00B (midpoint expected) and Adjusted EBITDA $145–$165m (upper half expected), with synergy target lifted to the upper end of $40m and deleveraging to <3.0x by YE25 and <2.0x by YE26 .
  • Key stock reaction catalysts: accelerated synergy timeline, Q4 sales ramp (seasonally strongest), walk-in van demand recovery, and Salesforce-enabled sales execution enhancements .

What Went Well and What Went Wrong

What Went Well

  • North America delivered a double-digit adjusted EBITDA margin (10.2%), up 290 bps y/y, despite flat sales; cost management and faster synergy realization were key drivers .
  • Order momentum and backlog strength: order intake +33% y/y (and +17% q/q), backlog +6% since June to ~$1.13B, supporting a significant Q4 step-up and 2026 growth .
  • Integration execution and synergies: management raised synergy confidence to the upper end of $40m and expects roughly half by mid-2026 and full by mid-2027; “we can confidently say that we will reach the upper end of the increased target of $40 million” .

What Went Wrong

  • Legacy Shyft underperformance: a ~$200m FY25 sales shortfall vs the prior $969m plan, weighing on near-term revenue trajectory despite improving orders; walk-in vans remain a recovery story .
  • Elevated working capital and higher net debt post-close: net working capital $451.5m (still high to support growth) and net debt $468.6m, up $22m since June, with transaction/restructuring costs and inventory needs driving leverage near-term .
  • Europe/RoW profitability still early in recovery: Q3 Adjusted EBITDA $7.9m (5.8% margin), below prior year due to fewer one-off high-margin sales; summer seasonality weighed on quarter .

Financial Results

Consolidated Performance (Combined Non-GAAP)

MetricQ3 2024Q4 2024Q1 2025Q2 2025Q3 2025
Net Sales ($USD Thousands)$456,526 $499,659 $453,785 $453,706 $471,325
Net Income/(Loss) ($USD Thousands)$7,445 $6,068 $626 ($7,895) $1,194
Adjusted EBITDA ($USD Thousands)$33,696 $36,756 $31,245 $34,480 $42,197
Adjusted EBITDA Margin (%)7.4% 7.4% 6.9% 7.6% 9.0%

Notes: Combined non-GAAP metrics include Aebi Schmidt and Shyft for periods prior to the merger; see Non-GAAP discussion .

Q3 2025 vs Prior Periods and Estimates

MetricQ3 2024Q2 2025Q3 2025 ActualConsensus EstimateBeat/Miss
Revenue ($USD Millions)$456.5 $453.7 $471.3 $488.1*Miss
Primary EPS ($USD)N/AN/A$0.20*$0.13*Beat
EBITDA ($USD Millions)$33.7 $34.5 $42.2 (Adj.) / $33.2* (SPGI)$36.6*Miss (SPGI def.)
  • Values retrieved from S&P Global. Company-reported Adjusted EBITDA differs from SPGI EBITDA definition; see Non-GAAP measures .

Segment Performance – Q3 2025

SegmentSales ($USD Millions)Adjusted EBITDA ($USD Millions)Adjusted EBITDA Margin (%)
Europe / Rest of World$135.4 $7.9 5.8%
North America$336.0 $34.3 10.2%

KPIs and Balance Sheet

KPIQ3 2025Prior Ref/BaseCommentary
Order Intake Growth+33.4% y/y; +16.6% q/q Prior year/Q2 2025 Strength across Airport/Municipal and walk‑in vans; Europe and NA .
Backlog$1,127m (+5.6% since June) June 2025 Expected to convert within ~15 months; supports 2026 growth .
Net Working Capital$451.5m (−7.3% y/y) $487.2m prior year Actions underway to improve efficiency by YE25 .
Net Debt$468.6m $446.3m Jun‑25 Increase due to transaction, restructuring, and working capital needs; deleveraging targeted .

Guidance Changes

MetricPeriodPrevious Guidance (Aug 14, 2025)Current Guidance (Nov 13, 2025)Change
SalesFY 2025$1.85–$2.00B $1.85–$2.00B; midpoint expected Maintained; midpoint bias
Adjusted EBITDAFY 2025$145–$165m $145–$165m; upper half expected Maintained; upper-half bias
Synergies (run-rate)Mid‑2026 to Mid‑2027$35–$40m (raised in Q2) Upper end ($40m) confirmed; accelerated timeline Raised vs pre‑merger; timeline accelerated
Leverage TargetYE 2025 / YE 2026<3.0x by YE26 (prior deleveraging plan) <3.0x by YE25; <2.0x by YE26 Pulled forward (YE25 <3.0x)
DividendOngoing$0.025 quarterly declared (Sep 29 payable) Commitment to competitive quarterly dividend reiterated Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2/Q1)Current Period (Q3 2025)Trend
Integration & SynergiesPost‑close integration team; synergies at least $25–$30m; upside identified .Upper end ($40m) confirmed; half by mid‑2026, full by mid‑2027; accelerated realization; cost synergies leading .Improving; faster timeline.
Walk‑in Van DemandQ2: weakness; NA down 2% on walk‑in vans .Recovery in order entry; gaining share; tailwind into YE and 2026 .Recovering.
Airport & Municipal StrengthStrong wins; Europe/RoW backlog up 32% .Very strong order momentum; adding capacity; backlog supports 2026 .Strong and sustained.
Working Capital & DeleveragingPlan to cut NWC and delever to <2.0x by YE26 .NWC $451.5m; actions to improve by YE25; leverage <3.0x YE25 and <2.0x YE26 .Execution underway; timeline pulled forward.
Technology/Sales ExecutionSystems alignment implied; focus on sales excellence .Salesforce migration completed Nov 1; weekly KPIs and performance management; strategic client management .Structural improvement.
M&A/Tuck‑insFlexible for tuck‑ins; recent small deals .Opportunistic pipeline, but focus remains on integration near‑term .Opportunistic, not immediate.

Management Commentary

  • “We can confidently say that we will reach the upper end of the increased target of $40 million [synergies]. We’re also confident that we can deliver those synergies on an accelerated timeline versus our initial target.”
  • “Aebi Schmidt Group’s strategic vision is to establish itself as a premier leader in the specialty vehicles market, targeting revenues of $3 billion and achieving a mid‑teens Adjusted EBITDA margin.”
  • “North America achieved a double‑digit adjusted EBITDA margin of 10.2%… despite lagging sales at legacy Shyft.”
  • “We migrated all to Salesforce by 1st of November… with a weekly performance management… we see good results here.”
  • “We expect a continued, significantly improved net income beginning with the fourth quarter.”

Q&A Highlights

  • Walk‑in van recovery: Management attributes order pick‑up to market recovery and improved sentiment; trajectory duration uncertain but near‑term orders are healthy .
  • Sales excellence initiatives: Unified Salesforce platform, call reports, KPI discipline, and strategic client management across units aim to sustain commercial momentum .
  • 2026 growth composition: Confidence anchored in airport/municipal backlogs across both regions; walk‑in van momentum positive; truck bodies remain a question mark .
  • Margin drivers: US margins improved via pricing, overhead rationalization, and accelerated cost synergies; Europe recovering with better after‑sales and pricing, though still early in margin rebuild .
  • M&A posture: Active dialogues, especially in snow/ice in Canada, but near‑term priority is integration and profitability improvement .

Estimates Context

  • Q3 2025 vs SPGI consensus: EPS beat ($0.20* vs $0.13*), revenue missed ($471.3m vs $488.1m*), EBITDA missed on SPGI definition ($33.2m* vs $36.6m*), while company’s Adjusted EBITDA was $42.2m .
  • Implications: Expect upward EPS revisions driven by cost synergies and improved margins, while revenue forecasts may be tempered near‑term by legacy Shyft shortfall despite strong backlog and Q4 seasonality .
  • Coverage depth: 3 estimates for revenue and EPS indicate a nascent coverage universe post‑merger; model definitions should align on Adjusted vs GAAP EBITDA for comparability*.
  • Values retrieved from S&P Global.

Key Takeaways for Investors

  • Profitability inflection: Margin expansion (group +160 bps y/y; NA 10.2%) and synergy acceleration are driving EPS outperformance despite revenue softness; monitor sustained cost capture into Q4/Q1 .
  • Near‑term catalyst: Seasonally strong Q4 with September run‑rate >$180m sales suggests a sequential step‑up; management expects significantly improved net income in Q4 .
  • Demand recovery pockets: Walk‑in vans showing order recovery and potential share gains; airport/municipal remain robust with capacity additions planned .
  • Balance sheet strategy: Elevated NWC and net debt to support growth, but deleveraging underway with YE25 <3.0x target and <2.0x by YE26; positive Q4 cash flow expected .
  • Execution edge: Salesforce-enabled sales discipline and unified KPIs should enhance commercial velocity across NA and Europe .
  • Guidance credibility: FY25 sales midpoint and Adjusted EBITDA upper-half reaffirmed; synergy upper end ($40m) confirmed with faster realization timeline .
  • Risk watch: Legacy Shyft sales shortfall and truck bodies uncertainty temper top-line near-term; track backlog conversion and price/mix to validate margin trajectory .

Sources

  • Q3 2025 8‑K earnings press release and exhibits .
  • Q3 2025 earnings call transcript and .
  • Q2 2025 press release (Aug 14) .
  • SPGI consensus estimates for Q3 2025 (EPS, revenue, EBITDA, # of estimates)*.
  • Values retrieved from S&P Global.