Blue Bird Q2 2025 slides: Record results and EV growth despite tariff headwinds

Introduction & Market Context

Blue Bird Corporation (NASDAQ:BLBD), a leading manufacturer of school buses, presented its fiscal second-quarter 2025 results on May 7, 2025, reporting record performance across key metrics despite emerging tariff challenges. The company has maintained its full-year guidance while continuing to strengthen its position in the alternative power segment, particularly with electric vehicles.

The presentation comes after a strong fiscal 2024, which saw the company achieve significant growth in both conventional and electric bus sales. Blue Bird’s stock closed at $38.35 on the day of the presentation, with after-market trading showing a slight gain of 0.69%.

Quarterly Performance Highlights

Blue Bird reported robust second-quarter results, with improvements across all key financial metrics compared to the same period last year. The company sold 2,295 units, a modest increase of 41 units over Q2 FY2024, while net sales reached $359 million, up $13 million year-over-year.

As shown in the following comprehensive overview of the quarter’s performance:

Particularly noteworthy was the company’s alternative power sales mix, which reached 57% of total sales, underscoring Blue Bird’s leadership position in this growing segment. The company’s backlog remains strong at approximately $770 million, representing 4,900 units, with over 1,100 electric vehicles booked and in the backlog.

The detailed financial results and business highlights further illustrate the company’s strong performance:

Detailed Financial Analysis

Blue Bird’s income statement reveals significant improvements in profitability metrics. Gross margin expanded to 19.7% from 18.4% in the prior-year quarter, driven by higher bus prices and a favorable EV mix. Adjusted EBITDA increased to $49.2 million from $45.8 million, with the margin improving to 13.7% from 13.2%. Adjusted diluted earnings per share rose to $0.96 from $0.89.

The following income statement comparison highlights these improvements:

The company provided a detailed breakdown of the factors contributing to the $3.4 million increase in Adjusted EBITDA, with net pricing and higher EV mix adding $8.5 million, partially offset by increased labor costs and SG&A expenses:

Blue Bird’s balance sheet and cash flow position also strengthened considerably. Cash increased to $130.7 million from $93.1 million in the prior-year quarter, while debt decreased to $92.7 million from $97.3 million. The company’s liquidity position improved to $274.0 million from $236.4 million. During the quarter, Blue Bird executed an accelerated stock buyback tranche of $20 million, with $20 million remaining in the program.

Strategic Initiatives & Outlook

A key strategic development was Blue Bird’s entry into the commercial chassis market, with its debut at the NTEA Work Truck event. The company reported strong initial interest in both propane and electric versions from multiple customers, including large national delivery fleets.

Blue Bird has confirmed its full-year FY2025 guidance, projecting revenue between $1,425 million and $1,475 million, with Adjusted EBITDA between $190 million and $210 million, representing a margin of approximately 14%. The company expects to sell around 9,300 units, including approximately 900 electric vehicles.

The following updated quarterly guidance illustrates the company’s projected performance through the remainder of fiscal 2025:

Looking beyond the current fiscal year, Blue Bird has reaffirmed its mid-term outlook of maintaining a 14% EBITDA margin, with a long-term target of exceeding 15%. The company’s strategic framework, termed "The Blue Bird Value System," emphasizes employee care, customer satisfaction, and sustained profitable growth:

For fiscal 2025 and beyond, Blue Bird projects continued growth across key metrics, including a 3%+ increase in bookings, 8%+ growth in revenue, 9% growth in Adjusted EBITDA, and a 28%+ increase in EV bookings:

Tariff Challenges & Countermeasures

A significant challenge addressed in the presentation was the impact of recently implemented tariffs, particularly those affecting imports from China (145%), Canada and Mexico (25% each, though USMCA-exempt), and the EU (minimum 10%), as well as steel and aluminum imports (25%).

Blue Bird has initiated several countermeasures to mitigate these impacts, including implementing a 2% price increase on all units invoiced after March 17th. The company noted that while USMCA exemptions help, there remains significant China exposure that creates potential volume risk for electric vehicles in the fourth quarter.

The following slide details the tariff situation and Blue Bird’s response:

In his closing remarks, President and CEO John Wyskiel emphasized the company’s resilience and long-term outlook: "Blue Bird is an almost century old company, an iconic brand and a great American story. We’ve demonstrated and proven resilience, and we’re positioned to look and invest for the long-term."

Blue Bird’s Q2 FY2025 results demonstrate the company’s ability to maintain strong performance and strategic focus despite emerging challenges in the global trade environment. With its leadership in alternative power vehicles and expansion into new market segments, the company appears well-positioned to continue its growth trajectory.

Full presentation:

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