NFI Group (NFI) Q2 2024 earnings summary

Executive summary

• Achieved significant year-over-year improvements in revenue, deliveries, margins, and profitability in Q2 2024, with the first positive net earnings since Q2 2021.

• Zero-emission bus (ZEB) transition accelerated, with 23% of Q2 deliveries and 41% of backlog now ZEBs.

• Backlog reached a record $11.8 billion (14,605 EUs), supported by strong government funding and robust demand.

• Aftermarket segment delivered record revenue of $162 million and $35 million in adjusted EBITDA, both up 18% year-over-year.

• Management reaffirmed 2024 and 2025 guidance, expecting further growth in the second half of the year.

Financial highlights

• Q2 2024 revenue rose 29% year-over-year to $851.2 million; adjusted EBITDA increased 387% to $59.4 million.

• Net earnings were $2.5 million, a $50 million year-over-year improvement and the first positive quarter since Q2 2021.

• Free cash flow turned positive at $1.1 million, compared to negative $30.8 million in Q2 2023.

• Liquidity at quarter-end was $179 million, up from $81.5 million a year ago.

• ROIC improved to 4% from negative territory last year, driven by higher adjusted EBITDA and lower invested capital.

Outlook and guidance

• 2024 guidance reaffirmed: double-digit revenue growth, adjusted EBITDA of $240–$280 million, and improved free cash flow.

• 2025 targets: adjusted EBITDA over $350 million, annualized run rate over $400 million by Q4 2025, and ROIC over 12%.

• Expects 30–35% of 2024 deliveries and 40% of 2025 deliveries to be ZEBs.

• Stronger second half anticipated, with Q4 typically the busiest quarter.

• Backlog provides production visibility into 2025.