Bombardier Inc.

Bombardier reported Q2 2025 revenue of $2 billion, down $175 million or 8% year over year. Adjusted EBITDA was $297 million, down $38 million year over year, with adjusted EBITDA margin at 14.6%; adjusted EBIT was $205 million, down $11 million; adjusted net income was $117 million, up 5%; and adjusted EPS was $1.11, up about 7%. Deliveries were 36 aircraft in the quarter, including 21 medium and 15 large aircraft, bringing first-half deliveries to 59, flat with last year. Services revenue was $590 million, up 16% year over year. Backlog ended at $16.1 billion and unit book-to-bill was 2.3x. Free cash flow usage in the quarter was $164 million, driven by a $280 million inventory build, $125 million of cash interest, and $36 million of CapEx. For 2025, management reaffirmed guidance and said it expects greater than 91 deliveries in the second half, more than $1 billion of EBITDA in H2, and that full-year free cash flow remains guided with potential to land toward the high end if order activity stays strong.

Eric Martel struck an upbeat tone, saying Bombardier is in an "excellent position" and on a "clear and confident path" to meet 2025 guidance. He emphasized the significance of the 50-aircraft order, strong business jet demand, low preowned availability, and growing defense opportunities such as SAP, Leonardo, and Safran-related initiatives. He also said services expansion is progressing well, with near-term focus on the U.S., and reiterated that the company will stay disciplined on volume and supply chain execution.

Bart Demosky highlighted that the quarter was in line with plan and that the business is set up for a stronger second half. He cited $2 billion of revenue, $297 million of adjusted EBITDA, 14.6% margin, $117 million of adjusted net income, and $1.11 of adjusted EPS, along with $590 million of services revenue and $16.1 billion of backlog. On the balance sheet, he said Bombardier completed a $500 million refinancing, extended maturities to 2033, lowered the average coupon on total long-term debt by 11 basis points, and ended with $1.2 billion of liquidity. He also noted free cash flow usage of $164 million was mainly due to inventory investment, and said the company expects a strong inventory release and positive free cash flow in the second half, especially in Q4.

Analysts focused on free cash flow, the large fleet order, margin mix, and capital allocation after leverage gets closer to the 2 to 2.5x target. Management said the order activity and the expected greater than 55% increase in second-half deliveries could push free cash flow toward the high end of guidance, but reiterated that full-year guidance was unchanged for now. On margins and supply chain, Bart said Q2 was on plan, supply chain is improved to below 1% late-to-line parts but still has some cost headwinds already included in guidance. Questions on defense, services, and the Global 8000 drew commentary that defense demand is strong, U.S. service expansion is a priority, and the 8000 should be margin-accretive with a list price $3 million above the 7500.