NFI Group (NFI) Q1 2025 earnings summary

Executive summary

• Achieved record backlog of $13.7 billion, with 33.9% of Q1 2025 deliveries and 36.5% of backlog as zero-emission buses, reflecting robust North American demand and highest-ever ZEB deliveries despite ongoing seat supply disruptions and UK market headwinds.

• Revenue grew 16.4% year-over-year to $841.4 million, with manufacturing revenue up 22.4% and improved gross margin and adjusted EBITDA.

• Net loss improved to $6.5 million from $9.4 million in Q1 2024, with adjusted net earnings of $2.9 million and adjusted EBITDA up 84.4% to $62.7 million.

• Aftermarket business continues to provide steady recurring revenue and strong free cash flow, though volumes declined from record 2024 levels.

• Total liquidity at quarter-end was $127.9 million, with a new $845 million credit agreement signed in May 2025.

Financial highlights

• Q1 2025 revenue: $841.4 million, up 16.4% year-over-year; gross margin improved to 11.2% from 9.5% in Q1 2024.

• Net loss: $6.5 million, improved by $2.9 million year-over-year; adjusted net earnings: $2.9 million; adjusted EBITDA up 84.4% to $62.7 million (7.5% of sales).

• Free cash flow was $4.4 million, up from negative $21.5 million in Q1 2024; cash generated from operations rose to $40.8 million.

• Manufacturing gross margin increased from 3.7% to 7.4% year-over-year; ROIC rose to 7.5% from 1.8%.

• Book-to-bill ratio for Q1 2025 was 139.3%; option conversion rate stood at 76%.

Outlook and guidance

• 2025 guidance reaffirmed: revenue $3.8–$4.2 billion, adjusted EBITDA $320–$360 million, ROIC 9–12%, and ZEBs 35–40% of manufacturing sales.

• Management expects continued growth in revenue, adjusted EBITDA, free cash flow, net earnings, and ROIC as backlog is executed and ZEB deliveries increase.

• Second half of 2025 expected to contribute about 60% of full-year EBITDA, reflecting typical seasonality.

• Guidance excludes potential impacts from tariffs and U.S. funding policy changes; most increased costs expected to be passed to customers.

• Anticipates strong public transit demand, with a five-year forecasted customer demand of 23,139 EUs.