NFI Group Inc
TSX:NFI
NFI Group Inc
NFI Group Inc., a North American titan in the manufacturing landscape, operates predominantly in the public transportation sector, crafting a variety of buses at the intersection of both traditional and electric propulsion systems. The company’s evolution from a small Manitoba-based operation, New Flyer Industries, into a diversified global leader has been marked by strategic acquisitions, including the likes of Motor Coach Industries and Alexander Dennis Limited. These expansions have allowed NFI to broaden its product offerings, accommodating an assortment of transit needs from sleek electric buses to robust motor coaches. This diversification positions NFI squarely within the growing market for sustainable transportation solutions, providing governments, municipalities, and private operators with vehicles that meet rigorous environmental standards.
At its core, NFI's business model hinges on the design, manufacture, and sale of these buses and coaches. However, its revenue streams are augmented by a robust after-market service operation, which provides maintenance, parts, and refurbishment support to its vast fleet in operation. This aspect of the business not only cements long-term relationships with customers but also creates a steady flow of recurring income. As cities and companies increasingly invest in infrastructure to support low-emission transit, NFI's prowess in the electric vehicle space will likely play an essential role in its continued growth, aligning its financial health with an industry pivoting towards sustainability.
NFI Group Inc., a North American titan in the manufacturing landscape, operates predominantly in the public transportation sector, crafting a variety of buses at the intersection of both traditional and electric propulsion systems. The company’s evolution from a small Manitoba-based operation, New Flyer Industries, into a diversified global leader has been marked by strategic acquisitions, including the likes of Motor Coach Industries and Alexander Dennis Limited. These expansions have allowed NFI to broaden its product offerings, accommodating an assortment of transit needs from sleek electric buses to robust motor coaches. This diversification positions NFI squarely within the growing market for sustainable transportation solutions, providing governments, municipalities, and private operators with vehicles that meet rigorous environmental standards.
At its core, NFI's business model hinges on the design, manufacture, and sale of these buses and coaches. However, its revenue streams are augmented by a robust after-market service operation, which provides maintenance, parts, and refurbishment support to its vast fleet in operation. This aspect of the business not only cements long-term relationships with customers but also creates a steady flow of recurring income. As cities and companies increasingly invest in infrastructure to support low-emission transit, NFI's prowess in the electric vehicle space will likely play an essential role in its continued growth, aligning its financial health with an industry pivoting towards sustainability.
Strong Backlog: NFI’s total backlog stands at 15,606 units worth $13.2 billion, providing strong revenue visibility into 2026.
Margin & Cash Flow Improvement: Adjusted EBITDA rose 52% year-over-year, with a $12.8 million boost in free cash flow and liquidity increasing by $240.2 million to $386 million.
Battery Recall Impact: A $229.9 million warranty provision for a battery recall significantly affected reported financials, although a tentative cost-sharing agreement is being negotiated with supplier XALT.
Guidance Tightened: 2025 revenue is now expected at $3.5–$3.7 billion, with adjusted EBITDA of $320–$340 million and Q4 set up to be the highest quarterly adjusted EBITDA ever.
Supply Chain Stabilizing: High-risk suppliers reduced from 50 in 2022 to just 3; seat supply issues being addressed through a new joint venture.
Tariffs Managed: Recent U.S. tariffs expected to have minimal 2025 impact and are mostly passed through to customers, though future risks remain.
Positive Outlook: Management expects continued growth in revenue, profit, and cash flow, with firm orders filling most 2026 production slots.
