Blue Bird Corp Q2 FY2025 earnings call

• Achieved record quarterly revenue and profit in Q2 2025, beating Q2 guidance and maintaining full-year guidance despite tariff impacts.
• Strong backlog of nearly 5,000 units, including over 700 EVs, representing over six months of production.
• Continued focus on pricing, with bus prices higher in Q2 compared to the prior year on every combustion engine model while remaining competitively priced.
• Progress on the EPA Clean School Bus Program with Rounds 2 and 3 flowing through to end customers, and reimbursement funds flowing for the $80 million MESC contract with the DOE for plant expansion.
• Debuted the Blue Bird commercial chassis at the Work Truck Show in Indianapolis, scheduled to launch in 2026.

In the second quarter of fiscal 2025, Blue Bird's bus net revenue was $333 million, up $15 million from the prior year due to higher EV mix and improved pricing across non-EV products. Average bus revenue per unit increased from $141,000 to $145,000, or approximately 3%. EV sales in Q2 were a record 265 units, doubling from Q1 and 55 units (26%) higher than the prior year. Part revenue for the quarter was $26 million, flat from Q1 but down $2 million compared to the prior year. The adjusted EBITDA for the quarter was $49 million, an all-time record, representing a 13.7% margin.

• Beat Q2 guidance and maintained full-year guidance. Targets $200 million adjusted EBITDA for the year with approximately 1,000 EVs.
• Adjusted EBITDA guidance narrowed to $190 million to $210 million (13.5% to 14.5% margin).
• Forecasts EV unit sales to grow to 900 buses in fiscal 2025, up 28% from the prior year.
• Due to tariffs, prioritized ICE buses in fiscal Q4 and reduced EV production, slightly raising Q3 guidance and lowering Q4 guidance range.

• Tariffs on imports, particularly from China, which have led to price increases and potential shifts in production focus from EVs to ICE buses.
• Uncertainty regarding the timing of EPA Clean School Bus Program Rounds 4 and 5.
• Supply chain fragility and material cost inflation pressures.

Q: Mike Shlisky from D.A. Davidson asked about margin improvements and EV pricing.

A: John Wyskiel mentioned it's early to speculate on margin improvements, and Razvan Radulescu stated tariffs are pausing EV price reduction efforts.

Q: Eric Stine from Craig-Hallum inquired about dealer network pricing pushback and CSB funding.

A: Razvan Radulescu said they're working closely with dealers, and funding is roughly 50:50 federal and state/local.

Q: Tyler DiMatteo from BTIG asked about pricing impact on win rate and cost sharing.

A: John Wyskiel and Razvan Radulescu discussed that tariffs haven't materially affected win rate and cost sharing varies by supplier and component.

Q: Craig Irwin from ROTH Capital Partners asked about EV upside and commercial chassis customer feedback.

A: Razvan Radulescu said there's upside if tariffs resolve, and John Wyskiel noted initial interest in propane for the commercial chassis.

Q: Chris Pierce at Needham asked about CSB program levers and share repurchases.

A: Razvan Radulescu discussed uncertainty in Round 4 and plans for share repurchases will be updated in the next earnings call.