NFI Group (NFI) Q3 2025 earnings summary

Executive summary

• Revenue increased 23.7% year-over-year to $879.9M in Q3 2025, with adjusted EBITDA up 52.1% to $80.9M, but a $229.9M battery recall provision led to a reported net loss of $140.9M.

• Backlog stands at $13.2B (15,606 equivalent units), with a 108.5% LTM book-to-bill ratio and a 71.8% option conversion rate, reflecting robust demand and pricing power.

• Liquidity improved to $386M, up 169% year-over-year, with working capital days reduced to 49.

• Supply chain health improved, aided by a joint venture to stabilize seat supply, though some disruptions persist.

• ZEB deliveries remain strong, with 27.6% of Q3 units and 35.1% of backlog being zero-emission buses.

Financial highlights

• Gross loss of $114.3M in Q3, primarily due to the battery recall; excluding this, gross profit would have been $115.6M (13.1% margin).

• Free cash flow was $14.8M, up from $2.0M in Q3 2024, and net cash from operating activities was $83.9M.

• Manufacturing segment adjusted EBITDA increased by 209% year-over-year to $53.4M, driven by higher deliveries and improved pricing.

• Aftermarket segment adjusted EBITDA declined 17.5% year-over-year to $28.3M, impacted by sales mix and tariffs.

• ROIC improved to 9.1%, up 380 basis points from Q3 2024.

Outlook and guidance

• Revenue guidance for 2025 tightened to $3.5–$3.7B, with adjusted EBITDA expected between $320–$340M and ROIC targeted at 9%.

• Q4 expected to deliver the highest quarterly adjusted EBITDA in company history, supported by higher deliveries and improved sales mix.

• ZEBs expected to be about 35% of 2025 manufacturing sales.

• CapEx projected at $26M–$50M, lower than initially expected, despite investments in new facilities.

• Majority of 2026 public market production slots are filled, with strong visibility from firm orders and options.