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.

• Aftermarket segment delivered record revenue and EBITDA, driven by increased North American volume and product mix.

• Robust demand environment supported by record public bid universe and strong government funding in core markets.

• Backlog stands at 14,605 equivalent units valued at $11.8 billion, with ZEBs comprising 41%.

Financial highlights

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

• Net earnings of $2.5 million to $3 million, a $50–51 million year-over-year improvement, marking the first positive net earnings since Q2 2021.

• Free cash flow turned positive at $1.1–$1.5 million, up over 100% year-over-year.

• Total liquidity at quarter-end was $178.7–$179 million, up from $81.5 million a year ago.

• Manufacturing gross margin rose to 8% from 0.9% year-over-year; overall gross margin improved to 12%.

Outlook and guidance

• 2024 guidance reaffirmed: double-digit revenue growth, triple-digit Adjusted EBITDA growth, and improved free cash flow.

• Zero-emission buses expected to be 30–35% of 2024 deliveries, rising to over 40% in 2025.

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

• Anticipate sequential improvement in deliveries and margins in H2 2024, with Q4 being the strongest.

• Backlog provides production visibility into 2025.