NFI Group (NFI) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 saw significant operational and financial improvement, with revenue up 16% year-over-year, record new orders up 55%, and a record backlog of $12.8 billion (15,135 EUs), despite supply chain disruptions, particularly from seat suppliers.

• Net earnings for Q4 2024 reached $18.6 million, a turnaround from a $2.3 million loss in Q4 2023, and Adjusted EBITDA for Q4 rose 77% to $67.9 million; full-year Adjusted EBITDA reached $214.4 million, up $145.2 million year-over-year.

• Aftermarket segment delivered record revenue and Adjusted EBITDA, providing a solid base for 2025, while the UK market softened and ARBOC production ramped up, effectively sold out for 2025.

• The company is essentially sold out in North American public transit markets for 2025 and well into 2026, with options extending to 2030.

• Supply chain disruptions, especially seat shortages, delayed some deliveries into 2025 but are being actively managed with new supplier partnerships and recovery plans.

Financial highlights

• Full-year revenue was $3,122.3 million, up 16% from 2023; Q4 revenue was $837.0 million, up 5.1% year-over-year.

• Gross profit rose to $349.4 million in 2024, with gross margin improving to 11.2% from 8.2% in 2023.

• Net loss for 2024 was $3.3 million, a 97.6% improvement from 2023; Q4 net earnings were $18.6 million.

• Free cash flow for 2024 was negative $17.8 million, with Q4 free cash flow at $0.6 million.

• Book-to-bill ratio for 2024 was 121.4%; option backlog conversion rate was 76%.

Outlook and guidance

• Fiscal 2025 guidance: revenue of $3.8–$4.2 billion, Adjusted EBITDA of $320–$360 million, and ROIC of 9–12%.

• ZEBS (electric) expected to comprise 35–40% of manufacturing sales in 2025.

• Management expects continued improvements in revenue, EBITDA, free cash flow, and net earnings, with a strong start to 2025.

• Guidance excludes potential impacts from tariffs, U.S. or Canadian policy changes, and escalated geopolitical risks.

• Seat supply disruption expected to improve by mid-2025, with new compliant suppliers being onboarded.