Blue Bird (BLBD) Q4 2025 Earnings Call Transcript

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DATE

Monday, Nov. 24, 2025 at 4:30 p.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — John Wyskiel
• Chief Financial Officer — Razvan Radulescu

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RISKS

• Tariff Volatility — Razvan Radulescu stated tariffs "are still unpredictable at times," and continue to introduce material cost pressure, impacting guidance conservatism and price stability.
• Lower Backlog — Backlog at fiscal year-end declined to 3,100 units due to market uncertainty and seasonality, with management noting, "The backlog is lower year over year. However, it is still significantly above pre-COVID levels."
• Headwinds From Cost Inflation — Razvan Radulescu cited "material costs people and health care costs, as well as supply inflation pressures are still present" as ongoing challenges for fiscal 2026.
• Potential Delays From Government Policy — John Wyskiel noted that a government shutdown "has created some delay" in the flow of EPA program funds and added, "we are hopeful soon hear when and how these funds will be administered."

TAKEAWAYS

• Revenue -- $1.48 billion for the year, up $133 million or 10% from the prior year, driven by higher bus prices and increased EV unit sales.
• Adjusted EBITDA -- Adjusted EBITDA was $221 million for the year, representing 15% of revenue and a $38 million, or 21%, increase over the prior year.
• Unit Sales -- 9,409 buses delivered in 2025, with electric vehicles representing 901 units, or 9.6% of total volume.
• Quarterly Performance -- Fourth quarter net revenue reached a record $409 million, up $59 million or 17% year over year, with adjusted EBITDA at $68 million, marking a 64% improvement.
• Average Bus Price -- Average revenue per bus increased $8,000 to $146,000 year over year, mainly reflecting pricing actions and EV mix benefits.
• Backlog -- Year-end backlog declined to 3,100 units (including 680 EVs), but as of the call, had risen to nearly 4,000 units (with over 850 EVs).
• Adjusted Free Cash Flow -- $153 million for the full year, representing approximately 70% conversion from adjusted EBITDA; Q4 adjusted free cash flow was $60 million, a $10 million year-over-year gain.
• Gross Margin -- Annual gross margin of 20.5%, an improvement of 1.5 percentage points year over year; Q4 gross margin was 21%, up 4.1 percentage points.
• Pricing Actions -- Implemented a $3,500 per bus price increase after November 18, 2025, to cover new safety features and variable costs, with margin neutrality targeted on tariffs.
• Segment Performance -- Bus segment net revenue was $1.377 billion, up $134 million or 11%, while parts segment revenue was flat at $103 million for the year.
• Liquidity and Cash Position -- Ended the year with $229 million in cash and total liquidity at a record $371 million, up $100 million from the prior year, after $40 million in share repurchases.
• Fiscal 2026 Guidance -- Management projects revenue of $1.45 billion–$1.55 billion, adjusted EBITDA of $210 million–$230 million, and free cash flow of $10 million–$30 million (after $100 million extraordinary capex).
• EV Momentum -- EV sales grew 30% to 901 units in 2025, with fiscal 2026 guidance for 750 EVs and a backlog expected to drive some bookings into fiscal 2027.
• Commercial Chassis Initiative -- Fiscal 2026 guidance includes approximately 100 commercial chassis units, with limited effect on full-year results.
• Share Repurchase Plans -- $50 million buyback completed in 2025, with an additional $10 million planned and a program for up to $100 million over the next two years.
• Long-term Outlook -- Management reiterated a medium-term target of 15% margin at up to 10,500 units and a long-term goal of $1.8–$2 billion revenue and $280–$320 million EBITDA at 15.5%–16% margin by 2029 and beyond.

SUMMARY

Management reported record annual results, with adjusted EBITDA of $221 million at a 15% margin and $1.48 billion in revenue, achieved through disciplined pricing and an improved EV mix. The year-end backlog dropped to 3,100 units amid tariff-related uncertainty, but rebounded to nearly 4,000 units as pricing stabilized into the next fiscal year. Fiscal 2026 guidance reflects a cautious view on tariffs and inflation while targeting repeat record-level volumes and profitability, and includes projected capex to upgrade manufacturing capacity and expand into new commercial chassis offerings.

• Razvan Radulescu confirmed the "backlog currently sitting at nearly 4,000 units including over 850 EVs," highlighting sequential improvement from the year-end low.
• Fiscal 2026 guidance assumes no new EPA program rounds beyond those currently funded, with management stating, "for fiscal twenty six, it does not rely on any round four or five, and we also have a very strong backlog."
• Orders for buses in the fourth quarter matched the ten-year average, indicating no demand weakness despite reported backlog seasonality.
• Management noted tailwinds from an aging fleet and pent-up replacement demand, while planning for a "much higher number of EVs in the second half versus first half," echoing fiscal 2025 trends.
• Razvan Radulescu specified that the recent price increase will primarily affect orders in late fiscal 2026 and may partly offset variable cost pressures and tariffs.
• Upcoming manufacturing investments, including up to $200 million over two years, are intended to support new product platforms and drive long-term margin targets, according to the stated roadmap.
• Management characterized ongoing supply inflation and healthcare cost increases as persistent headwinds, despite improvements in operational efficiency.
• Quarterly net income and adjusted diluted EPS increased significantly, at 68% and $0.55 respectively, underpinning cash flow and shareholder return initiatives.

INDUSTRY GLOSSARY

• Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, excluding specified non-recurring items, as used by Blue Bird Corporation for performance measurement.
• Alternative Power (Alt Power): Blue Bird’s product segment covering non-diesel vehicle powertrains including propane, gasoline, compressed natural gas, and electric buses.
• Commercial Chassis: Blue Bird’s newly introduced vehicle platform, distinct from core school bus products, targeted at adjacent commercial vehicle markets.
• EPA Clean School Bus Program: United States federal incentive program providing funding for schools to purchase electric or zero-emissions buses.

Full Conference Call Transcript

John Wyskiel: Thanks, Mark, and good afternoon, everyone. And thanks for joining us today. It's great to be here, and we're excited to share with you our fiscal 2025 fourth quarter and full year financial results. The Blue Bird team did an outstanding job once again delivering record sales and adjusted EBITDA for the year. Razvan will be taking you through the details of our financial results shortly, so let me get started with some of the key takeaways for the fourth quarter and full year on slide six. As shown in the first box, Blue Bird beat guidance on all metrics and delivered a record year.

And this is despite the impact and challenges associated with the administration policy on tariffs which continues to create some pricing uncertainty in the overall market. This uncertainty, coupled with the fourth quarter, typically being the lightest order period, reduced our backlog to 3,100 units. We will talk further on this, but we would consider 2025 fourth quarter ending backlog as still in the range. And in fact, today, our backlog is up to nearly 4,000 units and 850 EVs. Once again, we had a strong operational execution and performance for the quarter. It is a testimony to the team's dedication.

During the quarter, we also furthered our long-term manufacturing strategy by beginning scope development and automation business cases for our new factory. Once again, we are looking at where we can apply production automation, automated material movement, and manufacturing execution systems, which will bring shop floor connectivity and ease of data collection. As I explained before, this fits into our manufacturing roadmap, which will result in cost reduction steps for the future, and will improve our overall long-term competitiveness. In terms of pricing, we remain extremely disciplined. Bus prices remained higher than the previous year, and the previous quarter. This process is very much how we manage the business. Our track record in dominance in alternative powered vehicles continues.

Our EV demand is stable despite the tariff pricing uncertainty and EPA funding. The outlook in this area, though, remains strong. Alt Power is a segment we created more than fifteen years ago and we continue to maintain our lead position. During the quarter, we also looked at our long-term investment thesis. And have further defined our roadmap for both manufacturing and product. Again, we will invest in projects that have a clear and strong returns profile, and I look forward to sharing more in our next earnings call. We recognize investing in our operation and product portfolio will improve the overall business.

Consistent with what I communicated in the last two calls, it's our objective to position this business to be a strong long-term investment. And finally, we continue to manage the impacts of the administration executive orders and tariff volatility. We are fortunate to be well positioned to navigate this situation to a margin neutral outcome. Overall, adjusted EBITDA came in at $221 million for the year or 15% of revenue. That's $38 million better compared to last year's record year. Let's turn the page and take a closer look at the financial and key business highlights for the year on slide seven. We sold 9,409 buses in 2025 and recorded revenue of $1.48 billion.

A record year and $133 million ahead of last year. On the EV side, we sold 901 electric vehicles, 9.6% of volume, and our long-term outlook for EVs remains optimistic. As already mentioned, adjusted EBITDA for the year came in at $221 million, $38 million stronger than last year. And free cash flow came in at an outstanding $153 million. Razvan will talk more to this and her outlook later in the call. Turning to the right side of the page, I'll start with backlog. Our backlog finished the year at 3,100 units. This drop was a function of industry volatility, and the period itself. Fiscal fourth quarter is typically in historically the lightest order period for Blue Bird.

Razvan Radulescu: Our 2025 order intake for the quarter was in line with the ten-year prior average. Validating there were no performance issues during the quarter. More recently, we are also seeing our strategy on providing pricing stability into June and next year, paying off. Our backlog has increased some 800 units since year-end. Overall, the fundamentals are still there. The fleet is aging. Are coming into a heavy replacement cycle. And there has been industry supply issues the last few years leaving pent-up demand. So all of this continues to point towards this situation being more temporary, than long-lasting or structural. Year over year selling prices for buses was up almost $8,300 per unit.

But, of course, this also includes tariff recovery as part of our margin neutral strategy. With tariffs excluded, pricing is still up year over year. And part sales totaled $103 million for the year. All powered buses represented strong 56% of mixed unit sales for the year. Again, this compares with a typically less than 10% for our major competitors. And we benefit from higher margins and higher owner loyalty with their gas and propane products. As we are the exclusive supplier to the industry today. At the end of the quarter, we had 901 EVs booked and 680 EVs in our order backlog. Our latest guidance reflects approximately 750 EV unit sales for fiscal 2026.

Our EV backlog is deep enough that it'll push some bookings into fiscal 2027. Again, we remain optimistic on EVs in the school bus sector. EVs are a perfect fit for school buses when you look at the duty cycle, available charging intervals, range, and the proven health benefits to our children.

John Wyskiel: Similar to last quarter, we continue to see rounds two and three of the EPA clean school bus program flowing to our end customers. And we continue to see that rounds four and five are still in play. The government shutdown has created some delay, but we are hopeful soon hear when and how these funds will be administered. And reimbursement funds continue to flow for a $80 million MES contract with the DOE. This is for their funding towards our new plant in Fort Valley. There's been a lot of rumor in the areas of best grant but there's been no unfavorable direction provided to us from the DOE.

As a reminder, this project adds 400 well-paying American jobs to a century-old American company with an iconic brand. To build clean school buses, providing our children with the benefits of clean air. As I have said in prior earnings calls, it is really a great story. Overall, we beat our guidance for the twelfth consecutive quarter and for the full year. With an overall 15% adjusted EBITDA and record profits in Q4 for the full year, I'm very proud of our team's accomplishments. So we'd like to now hand it over to Razvan to walk through our fiscal 2025 fourth quarter and full year financial results as well as our full year guidance in more detail. Razvan?

Razvan Radulescu: Thanks, John, and good afternoon. It's my pleasure to share with you the financial highlights from Blue Bird's fiscal 2025 fourth quarter and year-end record results. The year-end is based on a close date of 09/27/2025 whereas the prior year-end was based on a close date of 09/28/2024. We will file the 10-K today, November 24, after the market close. Our 10-K includes additional material and disclosures regarding our business and financial performance. We encourage you to read the 10-K and the important disclosures that it contains. The appendix attached to today's presentation includes reconciliations of differences between GAAP and non-GAAP measures mentioned on this call as well as other important disclaimers.

Slide nine is a summary of the fiscal 'twenty five fourth quarter and full year record results. It was another outstanding operating quarter for Blue Bird. With significantly improved volume and with high margin units across all powertrains, driving both our top line and our bottom line results. Beat the adjusted EBITDA quarterly guidance provided in the last earnings call and in fact, we delivered the best quarter ever for Blue Bird. With $68 million adjusted EBITDA margin. The team continued to push hard and did again a fantastic job and generated 2,517 unit sales volume which was 51 units above prior year Q4 volumes.

All-time quarterly record net revenue of $409 million was $59 million or 17% higher than prior year driven by increased prices and the higher number of EV units. Adjusted EBITDA was a quarterly record of $68 million driven by higher volumes in DV units, improved pricing, and operational improvement in efficiencies and quality. Adjusted free cash flow was $60 million a $10 million increase versus the prior year fourth quarter, driven by strong operating margins and working capital improvements.

John covered already the record fiscal twenty five year-end key figures, with 9,409 units dollars $1.48 billion in revenue, dollars $221 million or 15% in adjusted EBITDA, and a record $153 million in free cash flow close to 70% of the adjusted EBITDA. I will provide more details on our full year results later in the presentation. Moving on to Slide 10. As mentioned before by John, our backlog at the end of Q4 has softened at just over 3,000 units including 680 EVs. This was due to the uncertainty of bus pricing driven by the tariffs over the last six months.

Our mitigation actions, combined with us recently locking our tariff charges for new orders with deliveries until the June 2026, drove an improved order intake during fiscal twenty six Q1 as expected with our backlog currently sitting at nearly 4,000 units including over 850 EVs. Breaking down the quarterly record $409 million in revenue, into our two business segments, The vast net revenue was $384 million, up by $61 million versus prior year. Our average bus revenue per unit was up $21,000 a $153,000 per unit, which was largely the result of pricing actions taken over the past year and higher EV product mix. EV sales in Q4 were 233 units as expected, or 149 units higher than last year.

Parts revenue for the quarter was slightly down year over year at $25 million. This continued great performance was in part due to strong demand for our parts, as the fleet is still aging. Gross margin for the quarter was 21%, or 4.1 percentage points higher than last year due to our sustained operational performance and our pricing overtaking the inflation costs, including the effects of tax. Fiscal 2025 Q4, adjusted net income was $43.4 million an outstanding $17.6 million or 68% improvement year over year. Adjusted EBITDA of $68 million or 16.6% was up compared with prior year by $26.6 million or a 64% improvement. Adjusted diluted earnings per share of $1.32 was up $0.55 versus the prior year.

Slide 11 shows the walk from fiscal 2024 Q4 adjusted EBITDA the fiscal 2025 Q4 results. Starting on the left at $41.3 million.0 the impact of the bus segment gross profit in total was $27.6 million.0 split between volume and pricing effects, net of material cost increases, $23.3 million.0 plus efficiency and quality improvements of $4.3 million.0 The parts segment gross profit was slightly down by $800,000.0 driven by slightly lower sales, as mentioned earlier in the call. Overall, the SG and A and other income expenses were flat year over year. Sum of all of the above-mentioned developments drives our record fiscal 2025 Q4 reported adjusted EBITDA result of $67.9 million.

Moving to Slide 12, I will cover some more details regarding our full year record results. Breaking down the $1.48 billion revenue into our two business segments, The bus net revenue was $1.377 billion.000 up by $134 million or 11% versus prior year. Our average bus revenue per unit was a $146,000 increase of $8,000 per unit versus the prior year. Which was largely the result of pricing actions taken over the past year and improved EV product mix. EV sales for fiscal 2025 were 901 units as expected, an increase of 197 units or another 30% improvement versus last year, and the same percentage growth of the year before.

Part revenue for the year was flat at $103 million maintaining the already very strong prior year level. This performance was in part due to increased demand for our parts of the fleet still aging. Gross margin for the year was a record 20.5%, 1.5 percentage points higher than last year due to our sustained operational performance and our pricing overtaking the inflationary cost year over year, including the tariff effect. In fiscal 'twenty five, adjusted net income was $144 million a $29 million improvement year over year for a 25% improvement. Record adjusted EBITDA of $221 million or 15% was up compared with prior year by $38 million for a 21% improvement.

Adjusted diluted earnings per share of $4.38 was up 92¢ versus the prior year. Slide 13 shows the walk from fiscal 'twenty four adjusted EBITDA to the fiscal 'twenty five results. Starting on the left at the prior record of $183 million the impact of the bus segment gross profit in total was $48 million driven mainly by the volume and pricing effects, net of material cost increases. On the operations side, the labor and health care cost increases were offset by improved efficiencies and quality improvement. Par segment gross profit was slightly down just under $1 year over year, due to slightly lower sales.

These great improvements were offset by planned increases of $9 million in our fixed cost mainly personal and fringes slash health care related SG and A and engineering, as we continue to invest into our business and our people. The sum of all of the above-mentioned developments drives our new record fiscal twenty five adjusted EBITDA result $221 million or 15%. Would like to remind you that 15% adjusted EBITDA was our long-term target not too long ago, and we delivered it ahead of the plan and with relatively low units sold under 9,500, compared to the pre-COVID years. Moving on to Slide 14. We have extremely positive development year over year, also on the balance sheet.

We ended the year with $229 million in cash, and this is after we repurchased $40 million worth of shares during the year. Our liquidity set at a record $371 million at the end of fiscal twenty five a $100 million increase compared to a year ago. The operating cash flow was a very strong $176 million in this year, driven by an improvement in operations and margins and improvements in working capital. The adjusted free cash flow was also a new record at $153 million fiscal twenty five. Or a 70% conversion from adjusted EBITDA of $221 million. On Slide 15, we want to share with you our confirmed fiscal 'twenty six guidance.

We have a number of both tailwinds and headwinds and we maintain a cautious stance given the volatility of tariffs and other government policies related to EVs. As tailwinds, we have an aging fleet driving strong demand stable pricing and still a solid industry backlog. We offer not only diesel and gasoline school buses, but we have the only propane fuel school bus in the industry. With clean fuel and best in class total cost of ownership. Are also leading in the EV segment. And are confident that the still upcoming orders from rounds two and three of the EPA clinical bus program. Will improve our already very strong EV backlog.

Additionally, at the end of fiscal twenty six, are planning to bring to market our new commercial chassis product.

John Wyskiel: Okay.

Razvan Radulescu: With headwinds, the tariffs are still unpredictable at times. And the material costs people and health care costs, as well as supply inflation pressures are still present. The backlog is lower year over year. However, it is still significantly above pre-COVID levels for this time of year. And finally, we expect to deliver a much higher number of EVs in the second half versus first half similar to fiscal twenty five. In summary, we are maintaining our units and revenue midpoint guidance to $9,500 and $1.5 billion respectively, And given our record fiscal twenty five results, we are also maintaining our adjusted EBITDA guidance of $220 million or 14.7%.

With a range of $210 to $230 million and fourteen point five percent to 15% margin. Moving to Slide 16, we laid out for you the quarterly guidance for fiscal 'twenty six, and also shown the actuals by quarter for fiscal twenty five. Essentially, we are targeting a repeat of our all-time record fiscal twenty five performance in fiscal twenty six. Despite the unfavorable tariff environment, and slightly lower EV volumes. Starting in Q1 with the seasonal lowest number of production weeks in the year, due to year-end holidays, We expect to sell approximately 2,100 units, including 100 EVs, and generate $325 million in revenue with adjusted EBITDA of $40 to $45 million.

In Q2, we expect our total volume to go up to approximately 2,200 units including 150 EVs and generate $350 million in revenue with adjusted EBITDA of $45 to $50 million. In Q3 and Q4, we expect an increased number of total units with 225 EVs in Q3 and two hundred seventy five EVs in Q4 driving quarterly revenue around $400 to $425 million and adjusted EBITDA of $60 million to seventy million dollars per quarter as shown.

On Slide 17, in summary, our fiscal 'twenty six guidance for net revenue is $1.45 billion to $1.55 billion with adjusted EBITDA of $210 million to $230 million and free cash flow of $10 million to thirty million after deducting $100 million in extraordinary CapEx for the new plant. We expect fiscal 'twenty six to be another strong year for Blue Bird on our path of profitable growth. Speaking of profitable growth, let's look again on Slide 18 at some of our principles for running the business and touch on some capital allocation points. We strongly believe that revenue is vanity, profit is vanity, and cash is king. Let's cover these points one by one.

On the revenue side, we are focusing on executing our organic growth an emphasis on alternative fuels. However, we do still offer diesel for those that continue to request it. We are not chasing market share, yet we are reengaging with some of the national large fleet as already shown in fiscal twenty five. While we continue to be laser-focused on our core school bus business, have planted the seeds for adjacent market growth in the commercial step and chassis business. As well as with MicroBird with the new plant launched this summer in New York State. Looking at profit, we continue to be very disciplined in our margin management.

We have implemented a price increase of $3,500 per bus for all orders received after 11/18/2025 to cover for new standard safety features For example, industry first driver airbag, and the expected variable cost increases, and we continue to execute on our margin neutral tariff strategy. We continue to monitor our backlog and keep it above one quarter of production providing us with the ability to schedule our mix and manage our supply chain efficiency. Finally, we work relentlessly on reducing our variable cost through continuous cost improvement quality improvement, manufacturing on one shift, supply chain management, and skill forward buy.

John Wyskiel: We

Razvan Radulescu: Looking at cash, we plan to invest over the next two years up to $200 million into our future manufacturing capabilities while also returning value to our shareholders through stock buybacks. We already completed $50 million buyback through fiscal twenty five Q4. We expect another $10 million in the current quarter they have a new program announced in the last earnings call for up to $100 million over the next two years. And we plan to achieve this while maintaining great liquidity and a strong cash position and they have flexibility in case we decide to pursue strategic and focused attractive m and a opportunities. Moving on to slide 19.

Given our strong business momentum and record results of fiscal 'twenty five, Today, we are reconfirming the medium-term outlook at 15% margin with volumes of up to 10,500 units, including 500 commercial chassis, generating revenue around $1.6 billion.0 and with adjusted EBITDA of approximately $240 million. Starting in 2029 and beyond, our long-term target remains to drive profitable growth So now it's on higher levels, towards $1.8 to $2 billion in revenue, comprising of 12,000 to 13,500 units including 1,000 to 1,500 commercial chassis, and generate EBITDA of 280 to 320 plus

John Wyskiel: million or 15.5% to 16% plus

Razvan Radulescu: at best in class levels. The profitable growth comes not only from improved EV mix, driven by sustained state funding, and improved EV total cost of ownership over time, but also from our new Blue Bird commercial chassis addressable market expansion as well as our Micro Bird joint venture new plant expansion in The USA which went live this summer. Continue to be incredibly excited about Global's future and now I'll turn it back over to John.

John Wyskiel: Thank you, Razvan. Let's move on to Slide 21. We've shown this slide on several earnings calls so I won't spend much time on it today as our priorities remain consistent. The chart on the left side of the page outlines the Bluebird value system as a company. Taking care of our employees, delighting our customers and our dealers, and delivering profitable growth. The right side of the page outlines how we get there. And, of course, the objective of delivering sustained profitable growth to our investors is at the center of it all. And when you turn to page 22, it really summarizes what a great year 2025 was and what a bright future the company has.

As we invest in the business with a longer-term perspective, we see our outlook only getting stronger. Starting at the top, we built 9,409 units for fiscal twenty five. But with a 6% CAGR projected for the school bus market, as well as entering new market adjacencies, we see our long-term volume growing to 13,500 units between school bus, commercial chassis. Our revenue for fiscal twenty five was up 10% from the prior year ending at just under $1.5 billion.0 and our profitability soared 21% in 2025 to $221 million adjusted EBITDA. But when you factor in these growth opportunities, our long-term outlook shows the company reaching $2 billion in revenue and $320 million or 16% plus in adjusted EBITDA.

And at the bottom of the page, you will see EVs are still very relevant for us. This year, EV sales grew 28% to 901 units. And our long-term outlook shows a thousand units plus. Overall, the achievements in 2025 were simply outstanding. But with the strong fundamentals of the industry and with our investment in the future, the outlook for the company is nothing but promising. There's a lot to be excited about. So I'll wrap it up on slide 23. First, this great company and iconic brand is almost a 100 years old. Bluebird has stood the test of time. And it continues to be poised for an exciting future.

We delivered an outstanding 2025 just under $1.5 billion.0 in revenue, and $221 million or 15% in adjusted EBITDA. We remain confident that the clean school bus funding program will continue. The bipartisan initiative, it's 100% appropriated. And eliminates harmful tailpipe toxins benefiting our children and communities. And we remain optimistic on overall near and long-term volume. The fundamentals of this industry are solid. And this kind of performance has put Blue Bird in a position to focus longer term as we invest and enter new segments, and upgrade our operations and product. As always, I want to thank our employees, our dealer network, supply partners, and, of course, our investors. All are critical to our success.

Similar to my message in the last calls, I remain excited about Bluebird. 2025 has been an incredible year with record results. And beating guidance. This company has such a rich history and an exciting future. Thank you. So that concludes our formal presentation for today. And I'd now like to hand it back to our moderator for the Q&A session.

Operator: Followed by one on your telephone keypad. If for any reason you would like to remove that question, it is star followed by two. Again, to ask a question, it is star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking a question. I'll pause briefly here as questions are registered. Our first question comes from Mike Shlisky with the company D. A. Davidson Companies. Mike, your line is now open.

Mike Shlisky: Good afternoon, and thank you. I want to get a little bit more detail on the federal EB bus program if you could. How important is that to the fiscal twenty six guidance? Do you have to see money flow again for you to make the difference that you put in there for EVs for the year? Can you help us also on whether the state and local subsidy programs that are out there across a lot of different states have they increased over the last twelve months or so, and have state and local kind of overtaken federal as the driver of EV demand?

John Wyskiel: Hi, Mike. Thanks very much for the question. I would say that when you look at everything we have EVs are relevant, and three is flowing, as you know. But I don't think it's contingent when we look at our outlook to have keep having to have rounds four and five come through. We have strong outlook I think it's stable. Yeah. So I think I think it's with the state mandates that we see out there, I think it supports demand. I don't know if Razvan has anything to add.

Razvan Radulescu: Yeah. So for fiscal twenty six, it does not rely on any round four or five, and we also have a very strong backlog. So if feel very good about the 750 guidance of EV. And there is some upside potential up to 1,000 units in this year.

Mike Shlisky: And then just looking at the '26 outlook, I know that most years, the real order season, she was charged after Christmas break, and I know it's on November here. So I guess, I mean, mean, look, being flat at a very high level is probably not the worst thing in the world coming up here, but do you are you kinda taking a conservative stance till you start hearing from people ordering after the Christmas break? Do you think maybe we'll get a much better picture of what real demand is on the next earnings call?

You know, just kinda looking at the slide that you just talked about, John, at the end there, the industry outlook for retail sales is quite a bit higher, not a little bit higher at these 2026. And 2025, but your definitely doesn't really imply that at this time. So gonna help us to kinda reconcile the broader industry your season, and your outlook that you put forth today.

John Wyskiel: Yeah. Yeah. Thanks, Mike. No. We have maybe a couple things. Yeah. Certainly, you look at the demand in the out years, it's strong. I mean, we know the fundamentals. Right? The replacement cycle is coming due. When you look at things like student enrollment, it's stable. There's a lot of things that support the demand going up. And then from our end, of course, we have capability of producing some extra demand as well. And that includes, of course, in a couple years, our new factories. So we'll be able to support that.

But overall, yeah, I don't I have probably less of a wait and see type of approach with this one that you kind of alluded to in the beginning. I think everything there is underneath, and everything we can see, including our backlog in the last quarter, seems strong. So I feel comfortable. I don't know if, again, Roz or Mark, if you guys have anything to add.

Mike Shlisky: Take that as a no. What was my next question here, if you don't mind? So my last one here is on the commercial chassis project that you guys are working on. Just give me a little bit more detail there. You know, what number of customers are testing it? What kind of customers what the initial what the early reactions have been, and your confidence that there's a real ramp in '27 taking place here.

John Wyskiel: Yeah. I'll comment on a couple of things. First, we've got a couple of prototypes that have been built and bodies have been mounted, and they're now going through calibration as well as some early testing or, I'll say, some testing in general. The product's been well received by the customers that looked at it. They seem to be favorable. The market we know is open to another competitor. And then as you know, we have capacity. So I think more to come as we start, you know, getting past the hurdle of release, if you will. But indications seem good for the product.

Mike Shlisky: Great. I appreciate the answers. I'll pass it along.

John Wyskiel: Thanks, Mike.

Operator: Next question comes from Eric Stine with the company Craig Hallum. Eric, your line is now open.

Eric Stine: Hi, everyone.

John Wyskiel: Eric. Hello. Hey, Eric.

Eric Stine: Hey. So maybe just sticking with, I guess, the commercial chassis, but also tagging into fiscal twenty six. I mean, is it, I know that you expect some contribution in Q4, or fiscal Q4. I mean, is it fair to say, though, that, that is a pretty minimal contribution? That's really not a you know, driver of low end to high end. As we think about the year?

Razvan Radulescu: Yeah. You are correct, sir Rajan. We have in our guidance approximately 100 commercial chassis and in terms of moving from low end to high end of guidance, they are not material at this point in time.

Eric Stine: Okay. Got it. And so then thinking about the guide, I mean, yes, you're factoring in tariffs are still an issue, but I guess, arguably, maybe calm down a little bit year over year. I know you are seeing some benefit from the stable pricing that you've got at least through a portion of fiscal twenty six, Then you also mentioned the price increase, and so I would assume that's more for the second half. So I mean, clearly, you are guiding to a bit of a ramp throughout the year.

I know you've talked about that, you know, really with the backlog, even if it's down a little bit, you know, there's not that typical seasonality that would have been seen in years past. So I mean, it's pricing kind of the main determinant here and the reason for that ramp? I mean, I other than EV mix, I guess.

Razvan Radulescu: Yeah. It's Erasmus. So we have a couple of factors I mean, first of all, it has to do with the number of production weeks that are in the year. Q1 is the lowest number of weeks Q2 is slightly up, and then Q3 is the highest one. And then Q4 again goes down a little bit. So you have the production seasonality. The new price increase, talked about the $3,500 per bus This is for new orders. And it will materialize in They go most likely at the end of the backlog, and it's for new orders. Q3 a little bit and then into Q4. Terms of tariffs, we are monitoring the situation.

We have provided tariff charge stability to our customers and orders. All the way through June right now. So depending how the reality of tariffs materializes until then, there is still a little bit of risk. And, therefore, we are probably conservative in terms of the guidance for the first half. And then we expect to ramp in the second half.

Eric Stine: Got it. Alright. That is helpful. And then maybe last for me, just coming back to the order environment, and, you know, I do appreciate that after the holidays, that's when things pick up, but a nice bounce back here, I guess, as of a week ago. I mean, as you've talked to dealers, it sounds like you've feel that is sustainable and that those are trends that, you know, maybe are more normalized after that period where there was a lot of tariff uncertainty and that really impacted the orders. Is that a fair characterization of your view?

John Wyskiel: Yeah. For sure it is. Eric. When you look at it, if you go back to the beginning of the year, there was constant change in tariffs. And I think it had some impact in terms of maybe you know, districts seizing up on some orders. They were just waiting to see. But you can certainly see it now. It's starting to stabilize. Like, you said. We have pricing out to the end of or to June rather for, that's firmed. I think all of those suggest just what you indicated is that there's some stability coming back into the order cycle.

Eric Stine: Okay. Thank you.

John Wyskiel: Hi, sir. Thanks, Eric.

Operator: One moment, team. I'm having some technical difficulties on my end. Next question comes from Greg Lewis with the company BTIG. Greg, your line is now open.

Gregory Robert Lewis: Hey, thank you and good afternoon and thanks for taking my questions. If we if I was thinking about the backlog and just on Slide seven, you kind of outlined what has happened quarter to date for the total backlog, but you didn't kind of you didn't update the, the EV side.

Not sure if we have that information, but just kind of as we think about the backlog as a percentage of the fleet on the EV side, is kind of the bookings that were done or the order book growth you know, quarter to date, the it does a kind of mirror what we have in the current order book, or was there you know, a little bit of under overperformance or underperformance on EVs with the quarter to date earnings or orders.

Razvan Radulescu: Yeah. Hi, Greg. This is Razwan. Thanks for the question. I had it actually in my remarks. The EV corresponding number is 850. So we had an increase also in EV throughout the course.

Gregory Robert Lewis: Okay. And on a percentage basis, about the same grade. And then the other question I had was I'm not sure if it was today or last week, but I guess in New Jersey, came out with updated an updated incentive program ZIP I guess they were at least $37 million. For additional buses. Kind of curious was that something that the you know, Bluebird and the market was expecting? Did it kinda come out of nowhere? And just as we think about what New Jersey did or announced, should we be thinking about and I know you kinda talked about it in the remarks.

But should we be thinking about other states kind of following through with updated programs that you're at least tracking or watching, or was this kind of just like a one off?

John Wyskiel: Yeah, Greg. I think each state is different. In terms of how they apply funds, but it could it's a testimony to the state funding. It's there. It's real, and it's and it's flowing. And we know there are certain states that are aggressive in this area in terms of EV mandates.

Gregory Robert Lewis: Okay. So was this largely expected, or was this something that we kinda knew it was gonna happen, we didn't know the timing of it?

John Wyskiel: This particular program I would say, wasn't a cornerstone of our communications here, but it's it's the trend we see across the country and what we talk about. On these calls is that outside of the federal side, there is there is real demand state level. So we continue to see a general trend of growth in these types of state level programs. I was gonna say from a macro level, we knew that things would flow, but we don't we don't really necessarily get into each state and the analysis of each, single grant.

Gregory Robert Lewis: Yeah. Now we're trying to do that. It's a lot a lot of leg work. Anyway, hey, guys. Thanks for taking my questions, and have a great night.

Razvan Radulescu: Thanks.

Operator: Our next question comes from Sharif Elsabi with the company Bank of America. Sharif, your line is now open.

Sharif Elsabi: I guess just looking at the midpoint of guidance, it seems to indicate a little bit of a lower price mix in the second half of the year versus the first half? Understand there's the chassis product coming in the fourth quarter and likely some tariff impact given the second half weighting of EVs. But I was just wondering if there's any other puts and takes we should be considering with regards to the first half versus second half price mix.

Razvan Radulescu: Actually, this is Van. So as I mentioned before, the price increase I talked about will come only at the tail end of the fiscal year. And then you have numerous other factors. You have the product mix. You have the fleet mix. So all of them are baked into our detailed bottom-up forecast. But overall, I would say, in general, we look at pretty flat pricing other than the pricing that I talked about. And the wildcard is still the tariffs at this point in time. We have not communicated Q4 tariffs. Charges yet.

As we are waiting and monitoring what will be the development on the cost side on the government policy related to tariff by the So overall, I would say, still, we are forecasting very strong EBITDA margins in the 1516%. We will update the guidance as needed in the next quarters to come.

Sharif Elsabi: Thank you.

Operator: Our next question comes from Craig Irwin with the company Roth Capital Partners. Craig, your line is now open.

Craig Irwin: Good evening and thanks for taking my questions. Razvan, the last several years, Blue Bird has provided on a quarterly basis, the dollar value of the backlog. And for a number of years, also, the dollar value of the EV backlog know, you gave us the $6.80 and $8.50 and, you know, obviously, the $30.68. Do you have those two financial metrics for us on this call?

Razvan Radulescu: Yeah. I mean, definitely, we can provide those in our follow-up calls if you if you request the this level of detail. And right now, we're focused more on the units at this point in time, but, definitely, those are available if request.

Craig Irwin: Fantastic. I'll definitely ask for that. Thank you.

Operator: Our next question comes from Chris Pierce with the company Needham. Chris, your line is now open.

Christopher Alan Pierce: Hey. Good afternoon. Can you hear me?

John Wyskiel: Hey, Chris. We got you, man.

Christopher Alan Pierce: Cool. Thank you. I just wanted to ask two questions on industry competitive dynamics. I know you have peers that are owned by companies that sell Class A trucks into The US and that are seeing section two thirty two tariffs and are talking about you know, losing share of that part of the business. Do you think we'll see here? Is it too early to talk about potential competitive shifting dynamics in the school bus market as they maybe try to make up for lost units in other parts of their business, or is that kinda too early to tell? Have you seen anything along those lines?

Razvan Radulescu: This is Razwan. I think it's too early to tell, and that's probably more of a question that you have to ask them how they manage between the different sections of the business. But so far, we haven't seen any meaningful change from that.

Christopher Alan Pierce: Okay. And then I know in your prepared remarks, you talked about student enrollment numbers. I guess, there are smaller competitors that are kinda working on optimizing school bus schedules. So it looks like there's less you know, just more throughput on the buses that run versus running a total number of routes. Is that something you're seeing where you kinda do you have software like that where you kinda bid on larger contracts? And larger school districts, or are school districts where we're trying to reduce the number of buses increase students per bus, or is that also kinda early days?

John Wyskiel: No. That's not something that we generate or produce. But, obviously, we work with fleets or providers that do have that software. I mean, there's and you know some of them that are out there. It's not something we do. Yeah. But in terms of impact

Razvan Radulescu: to the order or general demand, we haven't seen anything meaningful. At this point in time coming out through higher utilization of school buses. If this was your question.

Christopher Alan Pierce: Okay. Thank you, boss.

Razvan Radulescu: Thanks, Chris.

John Wyskiel: Chris.

Operator: Questions registered in queue. I'd like to pass the conference back over to our hosting team. For closing remarks.

John Wyskiel: All right. Thank you, Jayla, and thanks to each of you for joining us on the call today. Bluebird has delivered another year of record results, beating guidance, and demonstrating or credibility rather. This is despite a challenging environment. With the fundamentals of the industry, I remain enthusiastic for Blue Bird and its future, and we look forward to updating you on our progress next quarter. Should you have any questions, please don't hesitate to contact our Head of Investor Relations, Mark Benfield. Blue Bird continues to be stronger than ever and has an amazing future ahead as we approach our one hundredth anniversary in a couple years.

Thanks again from all of us at Bluebird, and have a great evening.

Operator: That will conclude today's conference call. Thank you for your participation and enjoy the rest of your day.

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