Executive Summary

Q2 FY2025 revenue was $762.1M with GAAP diluted EPS of $1.56 and Core diluted EPS of $1.69; aggregate gross margin held strong at 18.2% despite lower deliveries and $6.6M European facility rationalization costs impacting EPS by $0.13 .
Versus S&P Global consensus, the quarter missed on EPS ($1.69 vs $1.78*) and revenue ($0.762B vs $0.899B*); EBITDA also missed versus consensus ($104.4M* vs $137.6M*) as delivery timing and European footprint actions weighed on results (Values retrieved from S&P Global).
Guidance was mixed: deliveries and revenue were lowered (21.5–23.5k units; $3.15–$3.35B) but aggregate gross margin and operating margin were raised to 17.0–17.5% and 10.2–10.7% respectively, reflecting confidence in mix and operational efficiencies .
Strategic catalysts: dividend increased 7% to $0.32 (44th consecutive), strong leasing performance (70.7% gross margin, 98.3% utilization), and $2.6B backlog (20,400 units) providing revenue visibility; investor focus centered on lower volumes offset by margin resilience and capital returns .

What Went Well and What Went Wrong

What Went Well

Sustained margin quality: aggregate gross margin at 18.2% for the sixth consecutive quarter in/above mid-teens; operating margin 11.0% despite lower volumes .
Leasing strength: Leasing & Fleet Management gross margin 70.7% and operating margin 73.8%; utilization 98.3% with healthy renewals and syndication activity, supporting recurring revenue .
Strategic discipline and ROIC: Management raised FY margin guidance and reported ROIC of 12.4% on TTM basis, progressing toward the 10–14% target; dividend increased to $0.32 per share .
- Quote: “We are raising aggregate gross margin percent… and operating margin percent… Updated guidance reflects better visibility into our mix and disposition of our production plan for the second half…” — CFO Michael Donfris .
- Quote: “Our strong aggregate gross margin… driven by a more favorable product mix, continued optimization… and performance of our leasing business…” — CEO Lorie Tekorius .

What Went Wrong

Volume and revenue pressure: Revenue fell to $762.1M (from $875.9M in Q1), reflecting fewer deliveries and timing of syndication; deliveries declined to 5,500 units .
European footprint costs and tax: $6.6M rationalization costs (EPS impact $0.13) and a higher-than-anticipated 32.3% tax rate due to discrete items, trimming earnings quality .
Guidance reduction on deliveries and revenue: FY2025 deliveries narrowed and revenue lowered due to European closure and North American production changes, signaling near-term demand headwinds .
- Analyst concern: Near-term demand uncertainty and ASP mix shifts noted in Q&A; management emphasized mix and margin protection tools .

Financial Results

Metric	Q4 FY2024	Q1 FY2025	Q2 FY2025
Revenue ($USD Millions)	$1,053.0	$875.9	$762.1
Diluted EPS ($)	$1.92	$1.72	$1.56 (Core: $1.69)
Aggregate Gross Margin %	18.2%	19.8%	18.2%
Operating Margin %	11.8%	12.8%	11.0%
Deliveries (units)	7,000	6,000	5,500
New Orders (units)	4,400	3,800	3,100

Segment breakdown (Manufacturing vs Leasing & Fleet Mgmt):

Segment Metric	Q1 FY2025	Q2 FY2025
Manufacturing Revenue ($M)	$820.4	$700.3
Manufacturing Gross Margin %	17.1%	13.6%
Manufacturing Operating Margin %	14.2%	9.9%
Manufacturing Deliveries (units)	5,600	5,000
Leasing & Fleet Mgmt Revenue ($M)	$55.5	$61.8
Leasing & Fleet Mgmt Gross Margin %	60.5%	70.7%
Leasing & Fleet Mgmt Operating Margin %	48.1%	73.8%
Owned Fleet (units)	16,700	16,600
Fleet Utilization (%)	98.6%	98.3%

KPIs and Operating Metrics:

KPI	Q4 FY2024	Q1 FY2025	Q2 FY2025
Backlog (units)	26,700	23,400	20,400
Backlog (Value, $USD Billions)	$3.4	$3.0	$2.6
New Orders (units)	4,400	3,800	3,100
Deliveries (units)	7,000	6,000	5,500
Lease Fleet Utilization (%)	98.5	98.6	98.3
Operating Cash Flow ($M)	$192	n/a	$94

Guidance Changes

Metric	Period	Previous Guidance (Jan 8, 2025)	Current Guidance (Apr 7, 2025)	Change
Deliveries (units)	FY2025	22,500 – 25,000	21,500 – 23,500	Lowered
Revenue ($USD Billions)	FY2025	$3.35 – $3.65	$3.15 – $3.35	Lowered
Aggregate Gross Margin %	FY2025	16.0% – 16.5%	17.0% – 17.5%	Raised
Operating Margin %	FY2025	9.2% – 9.7%	10.2% – 10.7%	Raised
Manufacturing CapEx ($M)	FY2025	$120	$120	Maintained
Leasing & Fleet Mgmt CapEx ($M)	FY2025	$360	$300	Lowered
Gross CapEx ($M)	FY2025	$480	$420	Lowered
Equipment Sales Proceeds ($M)	FY2025	$60	$60	Maintained
Net CapEx ($M)	FY2025	$420	$360	Lowered
Dividend per share ($)	Q2 FY2025	$0.30	$0.32 (payable May 13, 2025)	Raised

Earnings Call Themes & Trends

Topic	Q4 FY2024 (prior)	Q1 FY2025 (previous)	Q2 FY2025 (current)	Trend
Margins and ROIC	Achieved mid-teens aggregate margins; EBITDA near-record; ROIC near target	Aggregate gross margin 19.8%; ROIC 11.2%	Guidance raised to 17–17.5% aggregate; ROIC 12.4% TTM	Improving
Supply chain/tariffs	Stable market conditions; disciplined lessors	Anticipated policy clarity post-election	Tariffs largely pass-through; inputs (steel) affected; U.S. MCA compliant	Manageable headwind
New orders/backlog	26.7k units; $3.4B backlog	23.4k units; $3.0B backlog; pipeline strengthening	20.4k units; $2.6B backlog; inquiries slower, picking up with clarity	Softer volumes; visibility intact
Leasing economics	Growing lease fleet; high renewals	Double-digit renewal rates; recurring revenue growth	Rates holding at high levels; fixed fleet debt; strong secondary market	Strong
Maintenance/refurbishment	Several thousand units planned FY2025	Continued rebodying/retrofits; accretive	Will utilize footprint flexibly to buffer new-car demand	Structural
European operations	Healthy pipeline, capacity mostly allocated	Lease originations stabilize production	Facility closure in Romania; consolidating capacity to lower cost	Restructuring for efficiency
Mexico in-sourcing	In-sourcing progress to drive efficiencies	On track, benefits expected	“Amazing progress” in Mexico in-sourcing	Positive execution

Management Commentary

“Greenbrier continued to deliver strong results… driven by a more favorable product mix, continued optimization in manufacturing operations and the performance of our leasing business…” — CEO Lorie Tekorius .
“We are raising aggregate gross margin percent… [to] 17% to 17.5%… operating margin percent [to] 10.2% to 10.7%… [with] deliveries 21,500 to 23,500 units; revenue $3.15B to $3.35B.” — CFO Michael Donfris .
“Syndication activity to accelerate in the back half… pipeline remains robust… inquiries have been slow… customers waiting [for] clarity on U.S. trade policy.” — President, Americas Brian Comstock .
“Quarterly dividend… increased by nearly 7% to $0.32 per share… reflecting confidence… while investing in the business.” — CEO Lorie Tekorius .

Q&A Highlights

Production downshift and mix: Deliveries reduced in Europe due to facility closure and North American line adjustments; management raised margin guidance despite lower volume .
Tariffs and pricing: U.S. MCA compliance limits direct tariff exposure; contracts include pass-through; ASP movements largely mix-driven (shift away from auto to tanks/gondolas/hoppers), not pricing degradation .
Leasing and secondary markets: Lease rates holding at high levels; fleet debt fixed; strong renewal momentum and secondary market liquidity .
Syndication visibility: Market remains liquid; timing tied to customer delivery schedules and build cycles .
CapEx adjustments: Leasing investment pulled back to $300M with disciplined portfolio mix; manufacturing visibility improved for H2 .

Estimates Context

Metric (Q2 FY2025)	Consensus*	Actual*
Primary EPS ($)	1.78	1.69
Revenue ($USD Millions)	898.5	762.1
EBITDA ($USD Millions)	137.6	104.4
EPS - # of Estimates	2	—
Revenue - # of Estimates	2	—
Target Price Consensus Mean ($)	46.5	46.5

Values retrieved from S&P Global. Company-reported GAAP diluted EPS was $1.56 and Core diluted EPS $1.69; Core EBITDA was $123.9M (16% of revenue) . The misses vs consensus were driven by fewer deliveries (timing and planned production changes) and European rationalization costs, partially offset by strong leasing performance and favorable mix .

Key Takeaways for Investors

Margin quality remains the story: Despite lower volumes, aggregate gross margin and operating margin were raised, indicating improved mix/efficiency resilience; near-term demand softness is being offset by operational gains .
Watch orders and H2 production fill: Backlog fell to 20.4k units ($2.6B); management flagged normal “open space” mid-year but expects to fill lines as policy clarity improves .
Leasing is a defensive ballast: High utilization, strong renewals, and fixed-rate debt support predictable cash flows and margin stability across cycles .
European footprint action is near-term headwind, long-term tailwind: Closure/consolidation reduces cost footprint; expect lower European deliveries in H2 but improved competitive positioning longer term .
Capital returns and liquidity: Dividend raised to $0.32; liquidity >$750M post-quarter with renewed/extended $850M bank facilities; opportunistic buybacks remain authorized .
Guidance mix matters for thesis: Lowered deliveries/revenue but raised margins point to earnings power durability; monitor conversion of pipeline to orders and syndication acceleration in H2 .
Trading setup: Near-term sentiment may hinge on order cadence and H2 execution; narrative likely pivots on maintaining mid-teens+ margins while volumes reset—positive if backlog stabilizes and leasing/maintenance continue to buffer cycles .

GREENBRIER COMPANIES INC (GBX)·Q2 2025 Earnings Summary