Blue Bird (NASDAQ:BLBD) reported fiscal 2026 third-quarter revenue of $517 million and adjusted EBITDA of $71 million, as the school-bus manufacturer said it exceeded its guidance across metrics and raised its full-year adjusted EBITDA outlook.
The company also announced an expanded collaboration with Ford Motor Co. that will move Blue Bird into the Class 5 and 6 commercial strip-chassis market. Under the agreement, Blue Bird will assume design, manufacturing and sales responsibility for the next-generation Ford F-53 and F-59 commercial strip chassis, using Ford medium-duty powertrains.
Third-Quarter Results Include Micro Bird Consolidation
Blue Bird sold 3,525 buses during the quarter ended June 27, including 1,235 Micro Bird units. The company consolidated Micro Bird’s results for the first time following its April 1 acquisition of the remaining 50% stake in the joint venture.
Revenue rose $119 million from the prior-year period to $517 million, with Micro Bird contributing approximately $123 million. Blue Bird’s core bus revenue was $369 million, down 1% year over year, which CFO Razvan Radulescu attributed to a higher level of finished-goods inventory for General Services Administration and fleet customers. However, average Blue Bird bus revenue per unit increased by about $10,000.
Adjusted EBITDA increased $13 million year over year to a record third-quarter $71 million. Micro Bird consolidation accounted for $8 million of the increase. Adjusted net income was $45 million, while adjusted diluted earnings per share rose $0.09 from a year earlier to $1.28.
Adjusted free cash flow totaled $28 million, down $24 million from the prior-year quarter due to seasonal working-capital needs and finished-goods inventory for GSA and fleet orders. Blue Bird ended the quarter with $117 million in cash and total liquidity of $259 million.
- Year-to-date revenue increased 12% to $1.2 billion.
- Year-to-date adjusted EBITDA reached $172 million, up $19 million from the prior year.
- Year-to-date free cash flow was $100 million, up $7 million year over year.
- Quarterly gross margin was 20%, down 160 basis points, primarily reflecting the consolidation of Micro Bird.
Backlog, Alternative-Power Sales and School Bus Demand
Blue Bird ended the quarter with backlog of approximately 4,900 units, including about 1,300 Micro Bird units and nearly 800 electric vehicles. Its Type C and D backlog was just under 3,600 units.
Alternative-power buses represented 54% of unit sales during the quarter. The company sold more than 350 electric vehicles, or 10% of total unit volume, including 300 Blue Bird EVs and 55 Micro Bird EVs. Blue Bird said its EV order book extends into 2027.
Wyskiel said the company continues to see favorable school bus market fundamentals, citing an aging fleet, replacement demand and supply constraints in recent years. He said more than 250,000 school buses are more than 10 years old, while buses sold during the high-volume 2017 through 2019 period are approaching replacement age.
The company said industry orders increased 7% on a trailing 12-month basis, while Blue Bird’s order intake rose 9%. Wyskiel also said funding for electric school buses remains relevant, pointing to continuing EPA Clean School Bus program activity, state funding and fleet EV mandates.
Ford Collaboration Targets Commercial Chassis Expansion
Blue Bird said its Ford agreement runs through the end of 2033, with an extension opportunity through 2036. The company also plans to acquire assets from Detroit Chassis LLC’s Detroit Assembly Plant, the current contract assembler of the F-53 and F-59 chassis.
The Detroit Chassis asset purchase is expected to close in calendar-year first quarter 2027, following the end of production for the current chassis. Blue Bird expects production of its next-generation chassis to begin in calendar-year first quarter 2028. In the question-and-answer session, Radulescu said production startup would occur around the middle of fiscal 2028, followed by ramp-up activity through fiscal 2029.
Blue Bird estimated the new opportunity expands its addressable market by $1.4 billion across commercial delivery and Class A recreational-vehicle segments. The company expects the segment to reach approximately 10,000 annual units by 2030 and produce more than $100 million in longer-term adjusted EBITDA, representing margins of 14% to 15%.
Radulescu said Blue Bird expects to invest about $90 million in 2027 for the initiative, including $50 million of capital expenditures. The Detroit Chassis asset acquisition will cost $7 million in cash, according to the company’s comments during the call.
Wyskiel said the Ford collaboration became Blue Bird’s primary route into the chassis market, replacing its earlier plan to enter the segment independently. He said the company expects Ford’s involvement in transferring fleet, RV and specialty-body manufacturer relationships to support an orderly market transition.
Guidance Raised and Long-Term Targets Updated
For fiscal 2026, Blue Bird maintained its revenue outlook midpoint and now expects revenue in a range of $1.74 billion to $1.76 billion. The company raised its adjusted EBITDA forecast to a range of $245 million to $250 million, or about 14% of revenue, from its previous outlook.
Blue Bird forecast adjusted free cash flow of $125 million to $135 million for the year. The outlook includes up to $5 million of extraordinary capital expenditures related to the company’s 50% fiscal 2026 share of a new plant investment supported by a Department of Energy grant, Radulescu said.
Looking further ahead, Blue Bird said pro forma results for fiscal 2026 and 2027, including a full year of Micro Bird consolidation, indicate approximately $2 billion in revenue and roughly $260 million in adjusted EBITDA before the non-capitalized component of the Ford chassis investment and other early-stage product investments.
The company updated its long-term targets to approximately $3 billion in revenue and adjusted EBITDA of $400 million to $500 million or more, with adjusted EBITDA margins of 14.5% to 15% or higher. Blue Bird also said it intends to refinance and expand its credit facility by the end of calendar 2026, maintain leverage below two times adjusted EBITDA and remain opportunistic with share repurchases. About $90 million remained under its existing buyback authorization.
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.
