Blue Bird Corporation Q2 FY2026 earnings call

• Bluebird achieved beating guidance on all metrics for the quarter and effectively managed tariff volatility. The backlog stood at just under 3,600 units. - The all - power segment continued to be dominant, with an EV backlog over 900 units. - The manufacturing strategy focused on building a new plant, automating where it provided good financial returns, and ensuring production contingency. - The $80 million MES contract with the DOE was reconfirmed for funding, and the acquisition of the MicroBird JV was announced. This acquisition was a key part of the profitable growth strategy, enabling growth, technology, and efficiency. In Q2, 2,148 buses were sold, revenue was $353 million, adjusted EBITDA was $51 million, free cash flow was $40 million, and for the first half of the year, revenue was $686 million and adjusted EBITDA was $101 million.

In the second quarter, Bluebird sold 2,148 buses and recorded revenue of $353 million. The bus net revenue was $325 million, which was $8 million less than the previous year, but the average bus revenue per unit increased by $6,000 from $145,000 to $151,000. EV sales in Q2 were 201 units, accounting for just under 10% of unit volume. Parts revenue for the quarter was $28 million. The gross margin for the quarter was a seasonal record of 20%. The backlog ended at just under 3,600 units, including over 900 electric vehicles. The all - power segment remained dominant with an EV backlog of over 900 units extending into 2027. The acquisition of MicroBird brought two plants, 950 employees, and best - in - class quality products.

• Before the MicroBird acquisition, the forecasted revenue range was 1.515 - 1.565 billion, and the adjusted EBITDA was forecasted to be $230 million (with a range of 220 - 240 million) with adjusted EBITDA margins of 15 - 16%. - After the MicroBird acquisition, the consolidated revenue for Q3 was guided to 500 million and for Q4 to 560 million, resulting in a total annual revenue range of 1.725 - 1.775 billion. The adjusted EBITDA guidance was $245 million (range 235 - 255 million), with an adjusted EBITDA margin of approximately 14%. In the long term, the revenue target was raised to $2.5 billion and the adjusted EBITDA target to $325 - $375 million plus.

There are risks related to forward - looking statements, including matters noted in SEC filings. These risks involve the administration's executive orders and tariff volatility, which could have a material impact on actual results.

Q: Eric Stein inquired about MicroBird, specifically regarding its entry into the Buy America fleet market and when it would start contributing.

A: Eric Stein was informed that activities had begun. The retail side was already in progress, and work was being done on FAA and FTA contracts. It would ramp up with a phase - in period.

Q: Mike Schliske asked about the margin outlook despite the new plant and CapEx in the old plant.

A: John Weiskill stated that they considered automation as a positive aspect and had contingency measures in place. Razvan Radulescu added that the old plant did not require additional CapEx as it was already tooled up.

Q: Chris Pierce asked about the alternative power mix, backlog, and section 232 tariffs.

A: John Weiskill said the alternative power mix was a short - term share fluctuation. The sweet spot for backlog was $3,000 - $4,000. Regarding section 232 tariffs, they were managing them by working on pricing with dealers and customers and mitigating with suppliers