Sign in

You're signed outSign in or to get full access.

BB

Blue Bird Corp (BLBD)·Q3 2025 Earnings Summary

Executive Summary

  • Blue Bird delivered record Q3 results: revenue $398.0M, GAAP diluted EPS $1.12, adjusted EBITDA $58.5M with a 14.7% margin; unit sales were 2,467 and adjusted free cash flow was $52.3M .
  • The company beat its Q3 guidance and raised FY2025 guidance: net revenue tightened to ~$1.45B, adjusted EBITDA raised to $205–$215M (midpoint $210M), adjusted FCF lifted to $90–$100M; long-term margin outlook increased to 16%+ on ~$$2B revenue .
  • Backlog declined to ~3,900 units due to tariff-driven order pauses, but management emphasized a margin-neutral tariff strategy and pricing stability through March; EV deliveries hit a record 271 units, with 1,200 EVs sold or in backlog .
  • A new $100M share repurchase program was announced, supported by record liquidity of ~$315M and strong cash generation, positioning shares for potential support from capital return and guidance raises .

What Went Well and What Went Wrong

What Went Well

  • Record quarterly revenue ($398.0M) and adjusted EBITDA ($58.5M, 14.7%) with unit sales of 2,467; gross profit rose to $85.9M, supported by pricing and mix .
  • EV momentum: record 271 EV buses delivered; 1,200 EV buses either sold or in firm backlog; management reiterated long-term EV optimism supported by EPA programs and state subsidies .
  • Guidance and capital allocation: FY2025 adjusted EBITDA raised to $205–$215M, adjusted FCF to $90–$100M; announced a new $100M buyback reflecting confidence in profitable growth .

Management quotes:

  • “We beat our Q3 guidance and increased our full year guidance… despite the impact and challenges associated with… tariffs” .
  • “We delivered a record 271 electric-powered buses this quarter… we have 1,200 EV buses either sold or in our firm order backlog” .
  • “We are tightening our full-year 2025 guidance… raising our Adj. EBITDA guidance to $205–215 million and Adj. Free Cash Flow to $90–$100 million” .

What Went Wrong

  • Backlog/orders pressure: backlog fell to ~3,900 units as districts paused orders amid tariff uncertainty; orders decreased industry-wide, though management views it as temporary .
  • SG&A inflation: Q3 SG&A increased by $6.2M YoY due to higher R&D and labor costs; year-to-date SG&A rose $17.5M on compensation, labor, and R&D .
  • Parts growth muted: parts revenue was flat YoY at $26M; overall segment contribution did not expand, reflecting channel/product mix .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$313.9 $358.851 $398.011
Gross Profit ($USD Millions)$60.317 $70.854 $85.928
Net Income ($USD Millions)$28.722 $26.046 $36.455
Diluted EPS ($)$0.86 $0.79 $1.12
Adjusted EBITDA ($USD Millions)$45.753 $49.206 $58.479
Adjusted EBITDA Margin (%)14.6% 13.7% 14.7%
Unit Sales (units)2,130 2,295 2,467

Segment breakdown (Q3 2025):

Segment KPIQ3 2025
Bus Net Revenue ($USD Millions)$372
Parts Revenue ($USD Millions)$26
Average Revenue per Bus ($USD)$151,000
Alt-Power Mix (% of units)61%
EV Units Delivered (units)271

KPIs (Q3 2025):

KPIQ3 2025
Backlog (units)~3,900
Adjusted Free Cash Flow ($USD Thousands)$52,317
Cash & Cash Equivalents ($USD Thousands)$173,066
Liquidity ($USD Millions)~$315
ASP Increase QoQ ($USD per bus)~$7,700

Vs. estimates (S&P Global):

  • Consensus EPS and revenue for Q3 2025 were not available via S&P Global in our tool pull; comparisons to Wall Street estimates are therefore unavailable. We anchor to company guidance instead [GetEstimates attempt returned empty; S&P Global data unavailable].

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net RevenueFY2025$1.4–$1.5B ~$1.45B Tightened to midpoint
Adjusted EBITDAFY2025$190–$210M $205–$215M (midpoint $210M) Raised
Adjusted FCFFY2025$60–$80M $90–$100M Raised
Adjusted EBITDA MarginFY202514% 14.5% Raised
Long-Term Adj. EBITDA MarginMulti-year15%+ @$~$2B 16%+ @$~$2B Raised
Share Repurchase AuthorizationNext 2 yearsPrior $60M program completed (context) New $100M program New authorization

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Tariffs/macro and pricing stabilityNot emphasized in Q1 PR; Q2 PR focused on mix/record results Margin-neutral tariff strategy; pricing stability extended through March; orders slowed industry-wide, viewed as temporary Elevated focus due to market uncertainty
Alternative power leadership (EV/propane)Q1: 94% ICE mix, leadership in alt-power; ~1,000 EVs sold/backlog Record 271 EVs; 1,200 EVs sold/backlog; alt-power mix 61% EV contributions rising; structural leadership sustained
Backlog trajectoryQ1 backlog ~4,400 units ; Q2 backlog ~4,900 units Backlog ~3,900 units amid tariff pause; “sweet spot” targeted near 4,000 units Down near-term, expected to recover
Manufacturing strategy/MES plantLimited in Q1/Q2 PRs Long-term strategy review; evaluating automation, MES; DOE MES grant progressing; new plant planning refined Intensifying capital investment and efficiency focus
Pricing cadence and protectionsNot detailed in Q1/Q2 PRs Two price hikes per year (~2% each) plus tariffs pass-through (additional ~1–1.5% Oct 1); stability through March Formalized cadence; resilience to cost changes
New products/expansionNot in Q1 PR; Q2 discussed EV record Micro Bird plant started production; commercial chassis entering final test, production in 2026 New revenue engines emerging

Management Commentary

  • CEO: “We beat our Q3 guidance and increased our full year guidance… despite the impact and challenges associated with… tariffs” .
  • CEO: “Backlog… is still at… 3,900 units… we delivered a record 271 [EV buses]… our long term outlook for EVs remains optimistic” .
  • CFO: “We are tightening our full-year 2025 guidance for Net Revenue at ~$1.45 Billion and raising our Adj. EBITDA guidance to $205–215 million and Adj. Free Cash Flow to $90–$100 million” .
  • CFO: “Gross margin for the quarter was 21.6%… our margins have not been negatively impacted [by tariffs]” .
  • CEO: “Average selling price… up almost $7,700 per unit… Alt Power… 61% of unit mix” .
  • CFO: “We are very happy to announce our next stock buyback program for up to $100,000,000 over the next two years” .

Q&A Highlights

  • Backlog/orders and seasonality: Orders slowed with tariff uncertainty; pricing stability through March expected to unlock orders; backlog decline matched industry, viewed as temporary .
  • Margin sustainability: Operational improvements (lean, efficiency) and future automation support margins; gross margins similar across powertrains, reducing mix sensitivity .
  • EV visibility and funding: ~500 EVs in backlog end-Q3; projecting ~200 EV deliveries in Q4; expect continued state/EPA funding (NY, CA, OR, IL, MI) and discrete fleet deals .
  • Pricing strategy and tariff pass-through: ~2% semiannual increases plus tariff-related ~2% (March) and additional ~1–1.5% (Oct 1); margin-neutral policy; customers accept tariff pass-through .
  • Working capital/inventories: Steady production; potential AR elongation on fleet/GSA; selective pre-buys to lock pricing, as needed .
  • New propane/EV chassis: 2026 production targeted; initial guidance conservative (100 units); strong interest, demos underway .
  • SG&A outlook: Growth to taper; low single-digit SG&A growth expected while revenue outpaces SG&A .

Estimates Context

  • S&P Global consensus EPS and revenue for Q3 2025 were unavailable via our data pull; we therefore benchmark results against company guidance and prior periods rather than Wall Street consensus [GetEstimates returned empty].
  • Implication: With FY2025 adjusted EBITDA/FCF guidance raised and a new buyback, sell-side models likely need upward revisions to EBITDA, FCF, and margin assumptions; near-term estimate changes may focus on EV mix, pricing cadence, and tariff neutrality .

Key Takeaways for Investors

  • Blue Bird’s profitable growth is intact: record Q3 revenue/EPS/adjusted EBITDA, beat-and-raise quarter, and stronger FY2025 EBITDA/FCF outlook underpin the bull case .
  • Tariff-driven order pauses compressed backlog, but pricing stability through March and margin-neutral management suggest transitory impact; watch order cadence through calendar 2H25 .
  • EV execution remains robust (271 in Q3; 1,200 sold/backlog), with incremental tailwinds from EPA/state programs; monitor rounds 4–5 timing and state allocations (NY/CA/OR/IL/MI) .
  • Capital returns and liquidity are strong: new $100M buyback and record ~$315M liquidity provide downside support and optionality for strategic investment and M&A .
  • Cost discipline and operational upgrades (lean, automation, MES plant) should support margin durability into FY2026–2027; management lifted long-term margin target to 16%+ .
  • New growth vectors (Micro Bird U.S. shuttle plant; commercial chassis in 2026) diversify revenue/margin drivers beyond EV cycles; track early chassis orders and shuttle production ramp .
  • Near-term trading implications: The guidance raise and buyback are catalysts; watch for incoming order trends as pricing stability takes hold and tariff noise abates .

Appendix: Additional Q3-Related Press Releases

  • Post-quarter EV delivery: Blue Bird delivered 25 electric school buses to Little Rock School District using EPA Clean School Bus funding, highlighting continued EV demand and operating cost benefits (e.g., $0.19/mile energy vs. up to $0.79/mile diesel) .