Blue Bird Q2 Earnings Call Highlights

Key Points

• Blue Bird beat guidance for the 14th consecutive quarter, reporting Q2 revenue of $353 million, record Q2 adjusted EBITDA of $51 million (14.4% margin), $40 million of free cash flow and quarter-end liquidity of $418 million.
• The company closed the acquisition of the remaining 50% of Micro Bird—adding two plants and ~950 people and expanding into the Buy America commercial shuttle and integrated EV market—and raised fiscal‑2026 guidance to $1.725–$1.775 billion revenue and $235–$255 million adjusted EBITDA (with $100–$125 million adjusted free cash flow).
• The DOE reconfirmed an $80 million MESC grant for a new ~$300M+ plant (Type C production starting in Q4 2028), while alternative‑power buses comprised 41% of Q2 sales and EV backlog exceeded 900 units (25% of total backlog).

Blue Bird NASDAQ: BLBD reported fiscal 2026 second-quarter results that management said exceeded its guidance across key metrics, marking what CEO John Wyskiel described as the company’s “14th consecutive quarter” of beating expectations. The school bus manufacturer also highlighted progress on two strategic initiatives: a reconfirmed Department of Energy grant supporting a new manufacturing plant and the completed acquisition of the remaining 50% of the Micro Bird joint venture.

Second-quarter results: record Q2 adjusted EBITDA and strong cash generation

For the quarter ended March 28, 2026, Blue Bird sold 2,148 buses and generated $353 million in revenue, which was “slightly below last year,” Wyskiel said. CFO Razvan Radulescu attributed the year-over-year revenue decline to a lower number of production days due to holiday timing, noting that unit volume was “just below prior year levels.”

Profitability improved despite the slightly lower volume. Radulescu said Blue Bird delivered “the best Q2 profit ever” with adjusted EBITDA of $51 million, driven by “high margins,” partially offset by higher healthcare costs. Adjusted EBITDA margin was 14.4%.

Cash performance was another highlight. Wyskiel said free cash flow was “an outstanding $40 million,” while Radulescu called it a record second-quarter result, up $21 million year-over-year. Operating cash flow was $48 million, with “almost flat working capital,” he added. Blue Bird ended the quarter with record liquidity of $418 million, including $276 million in cash, and reduced debt by $5 million over the last year.

• Q2 unit sales: 2,148 buses
• Q2 revenue: $353 million
• Q2 adjusted EBITDA: $51 million (14.4% margin)
• Q2 adjusted free cash flow: $40 million
• Quarter-end liquidity: $418 million

Radulescu also reported adjusted net income of $32.5 million and adjusted diluted EPS of $1.00, up $0.04 from the prior year. Gross margin was 20%, a “seasonal record,” supported by pricing actions, manufacturing efficiencies, and quality improvements, he said.

Pricing discipline, backlog levels, and alternative-power mix

Management emphasized pricing discipline, with Wyskiel noting that bus prices remained higher than both the prior year and the prior quarter. He said year-over-year selling price was up nearly $6,400 per bus, and added that the increase included tariff recovery as part of a “margin neutral tariff strategy.” Radulescu quantified the average bus revenue per unit increasing about $6,000 year-over-year to $151,000.

Backlog ended the quarter at approximately 3,600 units. Wyskiel said that level remains “close to the sweet spot,” and later clarified on the Q&A that Blue Bird views 3,000 to 4,000 units as a healthy range. He said too shallow a backlog makes scheduling difficult, while overly deep backlogs can increase exposure to cost pressures like inflation and tariffs. Radulescu added that the sweet spot equates to “1 to 2 quarters of production visibility.”

Order trends were positive relative to the broader market. Wyskiel said first-half order intake was up 7% from the prior year period, compared with a market down nearly 4%.

Alternative-power buses represented 41% of unit sales mix in the quarter, according to Wyskiel. Blue Bird sold 201 electric vehicles (EVs), just under 10% of unit volume, and said EV backlog exceeded 900 units extending into 2027. Radulescu said EVs represent a record 25% of total backlog mix, with some already scheduled for delivery in fiscal 2027’s first quarter.

On parts, Wyskiel said sales totaled $28 million for the quarter. Radulescu said parts revenue benefited from aging fleet demand, “supply chain-driven pricing actions,” and throughput improvements.

Micro Bird acquisition: expansion beyond core school bus segment

Blue Bird closed its acquisition of the remaining 50% of the Micro Bird joint venture on April 1, and management described the deal as a key step in its profitable growth strategy. Wyskiel characterized the acquisition as “safe and accretive,” adding that it includes two plants, approximately 950 people, and product lines spanning Type A school buses, commercial shuttle buses, and integrated EV powertrains.

Wyskiel said the transaction supports growth by giving Blue Bird access to the “Buy America” commercial shuttle bus market, expanding the company’s total addressable market beyond school buses. It also brings integrated EV technology through Ecotuned and creates potential opportunities for vertical integration and supply stability, he said. Management added that integration efforts have already begun “both organizationally and in business processes.”

In response to analyst questions about timing, Wyskiel said Micro Bird’s retail commercial shuttle initiative has already started through dealers, and that work is underway on Federal Transit Administration (FTA) and cooperative/state contracts. He said Blue Bird has already “won some contracts” and is progressing through a process that places the company on purchase lists, though he cautioned that ramp-up will take time and not all states are open due to differing contract cycles.

Updated guidance: higher revenue and EBITDA outlook after Micro Bird consolidation

Radulescu provided updated fiscal 2026 guidance both before and after the Micro Bird consolidation. Prior to the acquisition’s second-half consolidation impact, Blue Bird raised its revenue outlook to $1.515 billion to $1.565 billion and increased its EV forecast to 900 units for the year. It also raised adjusted EBITDA guidance to $220 million to $240 million, with a midpoint of $230 million, reflecting approximately 15% margin.

After consolidating Micro Bird in the second half (100% of revenue and the remaining 50% of adjusted EBITDA), Blue Bird guided to fiscal 2026 revenue of $1.725 billion to $1.775 billion and adjusted EBITDA of $235 million to $255 million, with a midpoint of $245 million. Because revenue will be fully consolidated while only half of EBITDA is added for the acquired portion, the company expects full-year adjusted EBITDA margin to be about 14%.

Radulescu said Blue Bird’s updated fiscal 2026 outlook includes adjusted free cash flow of $100 million to $125 million, after accounting for “extraordinary CapEx of $25 million” tied to the company’s 50% fiscal 2026 portion of a new plant investment funded by the reconfirmed DOE MESC grant.

New plant plan and tariff approach

Wyskiel said the DOE has officially reconfirmed the $80 million MESC grant, which supports Blue Bird’s manufacturing strategy and new plant. He said the planned facility will be just under 1 million square feet, with total investment “over $300 million,” replacing a 75-year-old plant. The company expects to start production in the fourth quarter of calendar 2028.

Wyskiel said the company has shifted the new plant’s scope to build Type C buses—rather than Type D—because Type C represents “90% of the market,” “80% of our sales,” and “70% of our people.” The company plans a capacity of 9,000 buses per year on one shift. Type D production will remain in the current facility. He said Blue Bird has identified automation use cases with strong returns that will be incorporated at startup, while also maintaining Type C capacity in the existing plant as a contingency during ramp-up.

On tariffs, management reiterated its goal of margin neutrality. Wyskiel said the company continues to manage volatility tied to tariffs and executive orders and believes it is “well-positioned to navigate this situation to a margin-neutral outcome.” In Q&A, Radulescu said Blue Bird is working with dealers and customers on pricing actions to recover tariff impacts while also working with suppliers to mitigate or resource components to reduce exposure, including to Section 232 tariffs.

Management also addressed ongoing investor questions about EPA Clean School Bus Program funding. Wyskiel said rounds 2 and 3 “remain intact” with funds flowing to end customers, and that the EPA has invited comments for 2026 funding, which he said “solidif[ies] rounds 4 and 5” consistent with prior company communications. In response to an analyst question on how the program could evolve, Wyskiel said he did not want to speculate, but noted propane could represent an opportunity given Blue Bird’s position as the only company building propane school buses, and suggested the structure of EV funding could potentially change.

In closing remarks, Wyskiel said Blue Bird delivered “a great start to the first half of 2026,” raised guidance, and remains enthusiastic about industry fundamentals, citing an aging fleet and a coming replacement cycle.

About Blue Bird NASDAQ: BLBD

Blue Bird Corporation NASDAQ: BLBD is a leading manufacturer of buses and mass transportation vehicles headquartered in Fort Valley, Georgia. The company's core business encompasses the design, engineering, and production of school buses and activity buses, with a product lineup that includes conventional (Type C) models, transit-style (Type D) models and specialty configurations for special-needs and activity transport. In recent years, Blue Bird has expanded its offerings to include zero-emission electric school buses, reflecting its commitment to advanced propulsion technologies and environmental sustainability.

Established in 1927, Blue Bird has built a legacy of safety and reliability in student transportation.

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