NFI Group (NFI) Q3 2024 earnings summary

Executive summary

• Achieved record $12 billion backlog, up 53% YoY, with 41% zero-emission buses (ZEBs) in backlog and 24% of Q3 deliveries as ZEBs.

• Q3 2024 revenue was $711.3 million, flat YoY, with significant improvement in gross margin to 12.2% and adjusted EBITDA up 375% to $53.2 million.

• Net loss narrowed to $15 million, a 62% YoY improvement, driven by higher-margin deliveries and improved sales mix.

• Aftermarket segment delivered $153 million in revenue and $34 million adjusted EBITDA, both up 7–8% YoY.

• Supply chain disruption from a key North American seat supplier impacted deliveries and working capital, with recovery plans and alternate suppliers in progress.

Financial highlights

• Adjusted EBITDA increased 375% YoY to $53.2 million; gross margin improved to 12.2%.

• Net loss for Q3 2024 was $15 million, a 62% YoY improvement; adjusted net loss per share was $0.04.

• Aftermarket revenue at $153 million and adjusted EBITDA at $34 million, both up YoY.

• Free cash flow turned positive at $2 million, up from negative $43 million in Q3 2023.

• ROIC improved to 5.3% from -1.0% YoY.

Outlook and guidance

• 2024 adjusted EBITDA guidance raised to $210–$240 million on $3.1–$3.3 billion revenue; 2025 target remains >$350 million adjusted EBITDA and ~$4 billion revenue.

• ZEBs expected to comprise 20–25% of 2024 manufacturing sales, rising to ~40% in 2025.

• ROIC target for 2025 maintained at >12%.

• Management anticipates continued improvement in revenue, margins, and cash flow as production ramps and supply chain issues are resolved.

• All delayed North American transit deliveries in 2024 are contractually sold and will be shipped in 2025.