Blue Bird's Q3 2025: Navigating Tariff Turbulence and EV Sales Uncertainty

EV pricing strategy and impact of tariffs, seasonality and order intake uncertainty, EV sales forecast and uncertainty, pricing strategy and tariff impacts, and EV adoption and subsidy dependency are the key contradictions discussed in Blue Bird Corporation's latest 2025Q3 earnings call.



Record Financial Performance:
- Blue Bird Corporation reported record revenue of $398 million for Q3, which was $65 million higher than the previous year.
- The company also achieved an adjusted EBITDA of $58 million, a $10 million increase from the prior year.
- This growth was driven by strong operational execution, improved margins across all powertrain types, and strategic cost management.

Backlog and Market Dynamics:
- Blue Bird's backlog stood at 3,900 units, indicating a temporary dip due to tariff-related uncertainties affecting industry orders.
- Despite a reduction, the backlog is still within the desired 'sweet spot' range, supported by fundamentals like an aging fleet and pent-up demand.
- The company implemented pricing certainty through March, aimed at stabilizing orders as schools awaited financial clarity from government programs.

Operational and Manufacturing Initiatives:
- Blue Bird is set to build a new factory, with plans to apply production automation, automated material movement, and manufacturing execution systems.
- The objective is to enhance cost reduction and competitive manufacturing strategies.
- This is part of a broader strategy to support forecasted volume growth and improve long-term competitiveness.

EV Market and Backlog:
- Blue Bird sold 271 units of electric buses, marking a 67 units increase from the previous year.
- The outlook for EVs remains optimistic, with 1,200 units either booked or in the order backlog and anticipation of 900 unit sales for the full year.
- This momentum is driven by sustained state funding and the school bus market's suitability for EV technology.