Executive Summary

Q1 2025 delivered modest top-line growth with profitability improvement: sales rose 3.4% YoY to $204.6M, GAAP EPS improved to $(0.04) from $(0.14), and adjusted EBITDA doubled to $12.3M (6.0% margin) as cost actions and mix offset end-market softness .
Management maintained full-year 2025 guidance (Sales $870–$970M, Adj. EBITDA $62–$72M, Adj. EPS $0.69–$0.92, FCF $25–$30M); Q1 outperformed internal expectations but the team remains cautious on parcel and motorhome recoveries skewing profitability to 2H (≈70% of FY adj. EBITDA) .
Blue Arc EV is scaling commercially: $26.3M revenue in Q1 tied to the FedEx 150-unit order (completion targeted in Q2) with positive field feedback and a growing trial pipeline; the pivot from EV development spend to revenue contribution supported corporate margin improvement .
Strategic backdrop and potential stock catalysts: reaffirmed FY outlook, visible EV commercialization milestones, service truck strength, and a pending Aebi Schmidt merger (S-4 filed, $600M facility syndicated) expected to close mid-2025; integration planning is underway and on track .

What Went Well and What Went Wrong

What Went Well
- Adjusted profitability inflected: adjusted EBITDA rose to $12.3M (6.0%) vs. $6.1M (3.1%) YoY on productivity gains and mix; adjusted EPS improved to $0.07 from $(0.04) .
- Specialty Vehicles sustained high-teens margin (Adj. EBITDA 17.3%) despite lower sales; management highlighted “another solid quarter” and robust service truck order intake .
- Blue Arc execution: “completed a majority of our first contract for FedEx in the quarter,” with trucks on the road and positive customer feedback; battery supply from ONE remains on plan and meeting expectations .
What Went Wrong
- End-market softness lingered: FVS sales fell 11% YoY to $96.1M on parcel weakness; FVS backlog down 31% YoY though margin improved on productivity and mix .
- Motorhome demand remained weak, pressuring Specialty sales YoY; SV sales of $82.2M were down 9% YoY, albeit with resilient profitability .
- Tariff/macro uncertainty: management is mitigating with pricing and supplier diversification, but continues to monitor a fluid policy environment; guidance unchanged but risk flagged .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$194.1	$201.4	$204.6
GAAP Net Income ($USD Millions)	$3.1	$(3.4)	$(1.4)
GAAP Diluted EPS ($)	$0.09	$(0.10)	$(0.04)
Adjusted EBITDA ($USD Millions)	$14.3	$15.9	$12.3
Adjusted EBITDA Margin (%)	7.4%	7.9%	6.0%
Gross Profit ($USD Millions)	$39.6	$42.9	$40.3
Gross Margin (%)	20.4%	21.3% (calc from )	19.7% (calc from )

Segment breakdown (Sales, Adj. EBITDA):

Segment	Q3 2024	Q4 2024	Q1 2025
FVS Sales ($M)	$105.9	$110.7	$96.1
FVS Adj. EBITDA ($M)	$9.8	$12.1	$3.6
Specialty Sales ($M)	$87.4	$87.5	$82.2
Specialty Adj. EBITDA ($M)	$16.1	$16.6	$14.3
Elimin. & Other Adj. EBITDA ($M)	$(11.6)	$(12.7)	$(5.6)
Consolidated Sales ($M)	$194.1	$201.4	$204.6
Consolidated Adj. EBITDA ($M)	$14.3	$15.9	$12.3

KPIs and backlog:

KPI	Q3 2024	Q4 2024	Q1 2025
Total Backlog ($M)	$345.4	$313.2	$335.3
FVS Backlog ($M)	$268.0	$244.8	$245.3
SV Backlog ($M)	$77.5	$68.5	$90.0
Blue Arc Sales ($M)	N/A	N/A	$26.3

Non-GAAP context (Q1 2025): Adjusted net income $2.4M; primary add-backs included $2.231M transaction-related expenses, $2.313M stock comp, $0.356M restructuring, and $(1.033)M tax effects .

Guidance Changes

Metric	Period	Previous Guidance (Feb 20, 2025)	Current Guidance (Apr 24, 2025)	Change
Sales	FY 2025	$870–$970M	$870–$970M	Maintained
Adjusted EBITDA	FY 2025	$62–$72M	$62–$72M	Maintained
Adjusted EPS	FY 2025	$0.69–$0.92	$0.69–$0.92	Maintained
Free Cash Flow	FY 2025	$25–$30M	$25–$30M	Maintained
Dividend	Quarterly	$0.05 per share (declared Feb)	$0.05 per share (declared Apr)	Maintained

Management reiterated that ~70% of FY adjusted EBITDA is expected in 2H on end-market recovery cadence, with tariff mitigation via pricing and supplier diversification incorporated in their planning .

Earnings Call Themes & Trends

Topic	Q3 2024 (Q-2)	Q4 2024 (Q-1)	Q1 2025 (Current)	Trend
Blue Arc EV commercialization	Production initiated; demos led to dealer order/LOI; targeting 2025 breakeven at <500 units	Shipped initial FedEx units; ~$50M Blue Arc sales embedded in FY25 guide; need more orders to hit breakeven	$26.3M Q1 sales; majority of FedEx 150-unit contract completed; finish in Q2; pipeline/trials ongoing	Progressing from development spend to revenue; cautious order cadence
Parcel demand (FVS)	Slow purchases; FVS margins improved on operations	Expect 2H parcel recovery; FVS margins ~low double digits achievable	Increased quoting activity suggests better 2H; FVS sales down YoY but margin improved YoY	Gradual recovery signs; 2H-weighted
Motorhome	Weakness persisted	Dealers at pre-pandemic inventories; 2H pickup expected	Motorhome down YoY; overall SV profitability strong	Still soft near-term; cautiously optimistic 2H
Service truck bodies/infrastructure	SV high-teens margins; vocational strength	Infrastructure steady; upfit strategy expanding (e.g., ITU)	Robust order intake; portfolio expansion showcased at NTEA	Structural strength; geographic/product expansion
Tariffs/supply chain	Not a major focus	Mitigation via NA supply, pricing flexibility; fluid situation	Monitoring; actions taken; pricing and supplier partnerships continue	Risk acknowledged; mitigations in place
Merger with Aebi Schmidt	Not announced yet	Pending merger; HSR approval; mid-2025 close targeted	S-4 filed; $600M facility syndicated; will trade as AEBI post-close	On track; integration planning advanced

Management Commentary

“We had a strong start to the year, delivering improved financial performance… adjusted EBITDA margins of 6%, which doubled year-over-year… results exceeded expectations.” — John Dunn, CEO .
“Blue Arc… completed a majority of our first contract for FedEx in the quarter, and feedback has been positive, with trucks actively deployed on the road.” — John Dunn, CEO .
“We saw sustained operational improvements, benefits from overall cost management and incremental sales that were originally planned for the second quarter.” — Scott Ocholik, Interim CFO .
“Consistent with our messaging in February, we continue to expect approximately 70% of our full year adjusted EBITDA to be delivered in the second half of the year.” — Scott Ocholik, Interim CFO .
“We have successfully syndicated a $600 million credit facility… S-4 filing… anticipate a special meeting… in mid-2025 to approve the merger.” — John Dunn, CEO .

Q&A Highlights

Blue Arc cadence and profitability: Q1 recognized a large portion of the FedEx 150-unit order; remaining units and revenue will carry into Q2. Blue Arc is now contributing (vs. $5.5M EV expense in Q1’24), with additional orders in the pipeline and trials driving future opportunities .
Tariffs: Guidance unchanged as actions (pricing adjustments and sourcing shifts to U.S.-based alternatives) are expected to mitigate impacts while the team monitors a fluid situation .
Parcel recovery: Increased walk-in van quoting with explicit timing included in customer discussions supports 2H recovery expectations .
Aebi Schmidt disclosure: With S-4 under SEC review, management did not add specifics on Aebi’s 2025 outlook during Q&A .
Battery supply: ONE batteries performing well with no field issues; supply confidence reiterated .

Estimates Context

We attempted to retrieve S&P Global consensus for Q1 2025, Q4 2024, and Q3 2024 (EPS and Revenue) but the data pull failed due to a mapping issue for SHYF in the SPGI/CIQ system. As a result, we cannot provide a definitive beat/miss vs. Wall Street for Q1 2025 at this time. We will update when S&P Global mapping is available. Values retrieved from S&P Global were unavailable due to a CIQ mapping error.

Key Takeaways for Investors

Mix and execution drove a quality Q1: margin expansion vs. last year with adjusted EBITDA doubling and adjusted EPS positive despite parcel and motorhome softness; part of this outperformance reflected timing (pull-forward of some Q2 sales) .
Specialty Vehicles and service truck bodies remain the profit anchor; FVS margins are structurally improving via productivity and mix, positioning the segment for operating leverage as parcel demand normalizes in 2H .
Blue Arc is transitioning from investment to contribution: $26.3M Q1 revenue, FedEx order completion in Q2, and a growing pipeline/trials provide line of sight to incremental revenue—order cadence stays measured near term .
Full-year guide intact, 2H-weighted: maintain expectations for a back-half recovery and free cash flow improvement; monitor tariff pass-through and cost actions as potential swing factors .
Strategic optionality: The pending Aebi Schmidt merger (target mid-2025 close) adds scale and infrastructure exposure; integration planning milestones (S-4 filed, financing syndicated) de-risk closing .
Trading setup: Near-term catalysts include completion of FedEx Blue Arc deliveries, incremental EV orders, visible 2H parcel orders, and merger vote/timeline updates. Risks are macro/tariffs, EV order timing, and pacing of parcel/motorhome recoveries .

Additional References and Materials

Q1 2025 press release (financials, guidance, backlog, non-GAAP reconciliations) .
8-K Item 2.02 and Exhibit 99.1 (Q1 2025) .
Q1 2025 earnings call transcript (prepared remarks and Q&A) .
Prior quarters: Q4 2024 PR and call ; Q3 2024 PR and call .
Dividend declarations ($0.05/share in Feb and Apr 2025) .
Strategic updates: Aebi Schmidt merger supplemental details and Isuzu collaboration expansion .

SHYFT GROUP, INC. (SHYF)·Q1 2025 Earnings Summary