NFI Group (NFI) Q2 2024 earnings summary

Executive summary

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

• Zero-emission bus (ZEB) transition accelerated, with 23% of Q2 deliveries and 41% of backlog now ZEBs, and average selling price and margins rising due to higher ZEB content.

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

• Backlog reached a record $11.8 billion (14,605 equivalent units), providing production visibility into 2025.

• Strong liquidity position maintained, with quarter-end liquidity at $179 million, up 119% year-over-year.

Financial highlights

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

• Net earnings of $2.5–$3 million, a $50–$51 million year-over-year improvement, and adjusted net earnings per share of $0.03.

• Gross margin improved to 12% from 7.3% year-over-year; manufacturing gross margin reached 8%, highest since Q1 2021.

• Free cash flow turned positive at $1.1 million, up 104% from the same period in 2023.

• Liquidity increased by $13 million to $179 million at quarter-end.

Outlook and guidance

• 2024 guidance reaffirmed: double-digit revenue growth, triple-digit adjusted EBITDA growth, 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%.

• ZEBs expected to be 30–35% of 2024 deliveries and over 40% in 2025.

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

• Backlog and government funding provide production visibility and support demand.