Bombardier TSE: BBD.A reported what executives described as a strong start to 2026, highlighted by a sharp improvement in free cash flow, a growing backlog, and continued services growth, while also working through a temporary supplier disruption that affected the timing of some aircraft deliveries.
Free cash flow surge and raised 2026 outlook
President and CEO Éric Martel said the first quarter delivered “unprecedented positive free cash flow for a first quarter,” with Bombardier generating $360 million in free cash flow. Martel said the result marked the company’s strongest first-quarter free cash flow in nearly two decades and added that it supported confidence Bombardier will “exceed the upper end” of its prior free cash flow expectations.
Executive Vice President and CFO Bart Demosky emphasized the cash performance was not driven by one-time items. “Better yet, there were no one-time items in this cash performance,” Demosky said, attributing results to “structural improvements” and operational discipline.
Bombardier raised its full-year 2026 free cash flow guidance to more than $1 billion, up from its previous range of $600 million to $1 billion, while reaffirming guidance on other metrics. Demosky said the update reflects the strong Q1 performance and “a continued constructive demand environment.”
Revenue up 5% as services growth helps offset delivery timing
For the quarter ended March 31, 2026, Bombardier reported revenue of nearly $1.6 billion, up 5% year-over-year. Martel pointed to continued services strength, noting services revenue rose to $717 million, representing 25% growth year-over-year. Demosky said services revenues were up 25% to $617 million and described the segment as continuing to perform “exceptionally well.”
Aircraft manufacturing and other revenue totaled $975 million, down $47 million from the prior-year quarter. Deliveries were 24 aircraft, compared with 23 a year ago, with “two additional medium aircraft and one fewer large aircraft,” Demosky said.
Management said a supplier issue temporarily affected operations and prevented a “handful of aircraft” from being delivered in time for the quarter. Martel said the “supplier snag” has been resolved and the company expects to “progressively catch up over the coming quarters.” He added that the company’s diversification—particularly its services business—helped offset the revenue and margin impact tied to delivery timing.
Profitability and tax attributes
Adjusted EBITDA was $246 million versus $248 million in the first quarter of 2025, with an adjusted EBITDA margin of 15.4%, down about 90 basis points year-over-year, according to Demosky. He said gross margin improved slightly, but spending increased to support future services and defense growth, with higher SG&A as a percentage of revenue and increased R&D.
Adjusted net income rose to $189 million, up 178% year-over-year, and adjusted EPS increased to $1.81 from $0.61. Demosky said the increase reflected higher underlying earnings as well as “the continued benefit of our significant tax attributes as profitability builds.”
On the tax credit profile, Demosky said Bombardier has “very large pools of accumulated R&D tax credits,” totaling about $1 billion, and that the benefit should persist in coming years. He said the amount recognized is tied to forecasts of future earnings and that investors should expect a “consistent pattern” annually, increasing as EBITDA grows.
Backlog jumps to $20.3B as Global 8000 demand remains strong
Bombardier ended the quarter with a backlog of $20.3 billion, up $2.8 billion from the end of 2025. Martel said the backlog was up 16% since the start of the year and 43% year-over-year, with a unit book-to-bill of 3.6 in the quarter. Demosky also cited the 3.6x unit book-to-bill as evidence demand remains strong “across our customer base and product portfolio.”
Martel highlighted the Global 8000 as a key contributor, saying it is “selling as fast as it flies.” During the Q&A, he said the transition from the Global 7500 to the Global 8000 is complete: “Since January first, we are only delivering Global 8000,” adding that the transition went “very smooth.” Martel also noted that owners of the more than 200 Global 7500 aircraft in service can upgrade to the Global 8000 through a service bulletin, and said Bombardier is seeing “a lot going on at the service center” related to those upgrades.
Martel said fleet operators contributed meaningfully to order momentum and described fleet demand as strategically important because it drives recurring aftermarket work over the life of the aircraft. He added that traditional customers also contributed, saying the book-to-bill for traditional customers was “approaching two” in the quarter.
Debt reduction, liquidity, and capital allocation priorities
Bombardier reported liquidity of more than $2 billion, and Demosky said the company ended the quarter with $2 billion of liquidity, including $1.65 billion of cash on hand—“well in excess of our targeted liquidity requirements.” Net leverage was approximately 1.8x. Martel noted that S&P revised Bombardier’s outlook to positive earlier in April.
During the quarter, Bombardier repaid $750 million of debt. Demosky said the company also announced an early redemption of a CAD 150 million debenture (representing just under $110 million), bringing total debt repaid to $860 million by the end of Q2 and resulting in annual interest savings of more than $52 million.
Asked about capital allocation, Demosky said Bombardier expects to continue deploying excess cash first toward debt retirement, and that the company has options to refinance at lower rates given trading levels on its bonds. Martel said management also continues to evaluate “smart investment” to maintain product leadership and reiterated that Bombardier has been transparent about potentially pursuing disciplined M&A, particularly in services and “maybe defense.”
On the free cash flow profile, Demosky said Bombardier has worked to smooth seasonality by adjusting the timing of customer progress payments, though deliveries and sales activity still tend to skew toward the fourth quarter. Martel added that services are a more stable source of cash generation quarter-to-quarter, and that improved supply chain execution should also help normalize the delivery profile over time.
Looking ahead, management characterized the business aviation environment as favorable, while acknowledging geopolitical uncertainty. Martel said North America remained strong and Canada was “extremely strong,” citing momentum following the removal of the luxury tax. He said customer conversations in the Middle East had slowed “a little bit,” though discussions were continuing.
On supply chain, Martel said conditions are “improving, stabilizing, and having better traction,” including improved performance from engine suppliers over multiple quarters. He said Bombardier expects less disruption in 2026 than in 2025. Demosky added that because aircraft build cycles span roughly 12 to 18 months, the benefit of improved supply chain performance should begin showing up in deliveries in Q4 2026, with stronger impacts in 2027.
In defense, Martel said there is “a lot of momentum on the sales side” and that Bombardier expects a defense book-to-bill “similar, if not better” than last year. He also said Bombardier is partnering with Saab and L3Harris on an AEW&C aircraft solution based on the Global 5500, referencing discussion around NATO’s airborne early warning needs.
In closing remarks, Martel said the quarter demonstrated “the momentum we have built and the discipline with which we are executing our plan,” pointing to free cash flow, services performance, and the expanding backlog as key indicators heading into the second half of the year.
About Bombardier TSE: BBD.A
At Bombardier (BBD-B.TO), we design, build, modify and maintain the world's best-performing aircraft for the world's most discerning people and businesses, governments and militaries. That means not simply exceeding standards, but understanding customers well enough to anticipate their unspoken needs. For them, we are committed to pioneering the future of aviation - innovating to make flying more reliable, efficient and sustainable. And we are passionate about delivering unrivaled craftsmanship and care, giving our customers greater confidence and the elevated experience they deserve and expect.
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