NFI Group (NFI) Q3 2025 earnings summary

Executive summary

• Q3 2025 saw significant year-over-year improvements in deliveries, revenue, free cash flow, adjusted EBITDA, and liquidity, with a backlog of $13.2 billion and a 108.5% LTM book-to-bill ratio, despite a $229.9 million battery recall provision impacting reported results.

• Deliveries reached 1,114 equivalent units, with 27.6% being zero-emission buses; average selling prices and backlog value continued to rise, reflecting robust demand.

• Liquidity improved to $386 million, up 169% year-over-year, supported by strong cash generation and deleveraging.

• Supply chain health improved, aided by a joint venture with GILLIG to stabilize seat supply, though risks remain for seats, batteries, and steel tubing.

• Net loss was $140.9 million, primarily due to the battery recall, while adjusted net earnings were $12.1 million.

Financial highlights

• Q3 2025 revenue rose 23.7% year-over-year to $879.9 million; adjusted EBITDA increased 52.1% to $80.9 million.

• Free cash flow improved to $39.7 million, compared to negative $23.2 million in Q3 2024.

• Manufacturing segment gross margin, excluding the battery recall, was 10.2%, with gross profit per unit up 58% year-over-year.

• Manufacturing EBITDA increased by $36.1 million year-over-year, driven by higher deliveries and improved pricing.

• Liquidity at quarter-end was $386 million, with leverage ratio reduced to 4.28x LTM (3.37x for banking purposes).

Outlook and guidance

• 2025 revenue guidance narrowed to $3.5–$3.7 billion, with adjusted EBITDA expected between $320–$340 million and ZEBS at ~35% of manufacturing sales.

• Q4 is expected to deliver record adjusted EBITDA, supported by higher deliveries and improved sales mix.

• Management expects continued improvements in revenue, gross profit, adjusted EBITDA, free cash flow, and ROIC into 2026, supported by strong public transit funding and robust order pipeline.

• Cash capital expenditures for 2025 expected at $26–$50 million, lower than original guidance.

• Majority of 2026 public market production slots are filled, with strong visibility from firm orders and options.