BRP (DOO) Q2 2025 earnings summary

Executive summary

• Q2 revenues declined 33.7% year-over-year to CA$1.84B, reflecting intentional inventory reductions and soft consumer demand in a challenging macroeconomic environment.

• Net income dropped to CA$7M, with normalized EBITDA down 58% to CA$198.5M and normalized diluted EPS at CA$0.61.

• North American Powersports retail sales fell 18% year-over-year, lagging industry trends, while Latin America retail was up 18%.

• Product innovation included launches of Can-Am electric motorcycles, new ATV platforms, and expanded off-road and watercraft offerings.

• Proactive inventory management received positive dealer feedback despite intensified promotions and some market share losses.

Financial highlights

• Q2 revenue was CA$1.84B, down 34% year-over-year, mainly due to lower shipments and higher sales programs.

• Gross profit was CA$376.5M with a margin of 20.4%, down from 25.1% last year due to lower production volumes and higher sales programs.

• Normalized EBITDA reached CA$199M; normalized EPS was CA$0.61.

• Operating expenses decreased by 10% year-over-year, aided by R&D subsidies.

• Free cash flow was CA$6M, down 98% from CA$386.8M a year ago.

Outlook and guidance

• FY25 revenue guidance lowered to CA$7.8B–$8.0B, normalized EBITDA at CA$890M–$940M, and normalized EPS at CA$2.75–$3.25.

• Free cash flow expected just above CA$200M; capital expenditures projected at ~$475M.

• Sequential improvement anticipated in Q3 for revenue, EBITDA, and EPS.

• Industry softness and high promotional activity expected to persist through at least H1 of next year.

• Net income guidance reduced to CA$90M–$120M; effective tax rate 25.0%–25.5%.