Bombardier (TSE:BBD.A) executives used the company’s fourth-quarter and full-year 2025 earnings call to emphasize that the manufacturer has completed its multi-year turnaround plan and is entering 2026 with what management described as strong momentum, record cash generation, and a larger, more diversified revenue base anchored by services and defense.
Turnaround targets met as revenue and cash rise
President and CEO Éric Martel said 2025 marked a “landmark year” in which Bombardier delivered on the financial objectives it set in 2021, including revenue growth, cash generation and leverage improvement. Martel pointed to full-year revenue of approximately $9.6 billion, free cash flow of $1.072 billion, and adjusted EBITDA of $1.56 billion with a 16.3% margin.
Bombardier reported delivering 157 aircraft in 2025, up 11 units year over year. Demosky said higher deliveries, pricing, and increased defense content drove a $617 million year-over-year increase in aircraft manufacturing and other revenues.
Services and defense reach records; backlog climbs
Management repeatedly highlighted a shift toward a more diversified top line. Martel said Bombardier achieved the highest business aviation services revenue in its history, totaling $2.3 billion, up 13% year over year, supported by an expanded service network and centers operating at full capacity. He cited more than 5,200 aircraft in service and record customer visits across the network.
Demosky said defense revenue surpassed the $1 billion threshold in 2025, several years ahead of the company’s growth plan, supported by 16 deliveries. Combined, services and defense accounted for 35% of total revenue in 2025, up from roughly 30% a year earlier, he said.
Bombardier ended 2025 with a backlog of $17.5 billion, up $3.1 billion, or 22%, from the end of 2024. Demosky attributed that growth to a 1.4x unit book-to-bill and additional momentum from services and defense modification orders.
Operational and product milestones in 2025
Martel pointed to several aircraft and program milestones, including the Global 8000 entering service in December. He said the aircraft reached a top speed of Mach 0.95 and delivered the “lowest cabin altitude in the industry” at 2,691 feet, while securing approvals from Transport Canada and the FAA, with EASA approvals starting in 2026.
Martel also said Bombardier delivered the 1,000th Challenger 300 series aircraft and described Bombardier Defense as gaining momentum globally. He cited a Canadian government contract to deliver six Global 6500 multi-role aircraft to the Royal Canadian Air Force and noted partner program developments involving L3Harris, Saab’s GlobalEye (including France as a customer), the Pegasus program for Germany, and a 10-year Smart Services agreement with Sierra Nevada Corporation for two Global 6500 aircraft equipped with RAPCON-X technology.
On services expansion, Martel said Bombardier began a large-scale expansion of its U.S. service network in 2025, including plans for a service center at Fort Wayne International Airport in Indiana, and highlighted the acquisition of Velocity Maintenance Solution as a way to add mobile resources and hangar capacity. He also said Bombardier ranked number one for product support in Aviation International News and Professional Pilot surveys.
Profitability and cash flow driven by Q4 performance
Demosky said Bombardier’s fourth quarter included 64 aircraft deliveries, described as an all-time record for Globals and Challengers in a single quarter, alongside record defense and services revenues. The company posted adjusted EBITDA of $658 million in Q4 and a 17.8% margin, which he said was Bombardier’s highest margin quarter since the turnaround plan began in 2021.
For the full year, Demosky reported adjusted EBIT of just under $1.1 billion, adjusted net income of $805 million, and adjusted EPS of $7.72. He said Bombardier expects EPS to continue growing as the company uses its tax attributes to convert EBITDA growth into net income, and he later noted Bombardier has over $12 billion of tax attributes and significant R&D tax credits.
Free cash flow was a central theme. Demosky said Bombardier generated $1.388 billion of free cash flow in Q4, bringing full-year free cash flow to just under $1.1 billion. He characterized the Q4 result as driven by “very strong performance across the entire business” and working capital timing, rather than one-time items. Demosky said cash uses included net cash interest of $423 million, capex of $153 million, and an investment in inventory (net of accounts payable) of $272 million, largely offset by a $579 million increase in customer advances, which he said reflected higher progress payments and deposits on new orders, led by higher Global 8000 orders.
2026 guidance, supply chain outlook, and capital allocation priorities
Looking ahead, Bombardier guided to 2026 revenue of greater than $10 billion, adjusted EBITDA of greater than $1.625 billion, and free cash flow of $600 million to $1 billion. Demosky said the free cash flow range reflects working capital variability tied to order activity, order mix, supply chain performance and production rates. He told analysts the company’s planning assumption for 2026 is a 1.0x book-to-bill, versus 1.4x in 2025.
On capex, Demosky said Bombardier expects spending to rise to around $300 million in 2026, up from below $200 million in recent years, as the company begins incremental investments in products, facilities and growth support.
Supply chain disruption costs remained a key topic in Q&A. Martel said Bombardier is still building aircraft with “shortages,” though he said the company reduced shortages from around 5,000 three years ago to about 500 at the end of 2025. He characterized shortages as either non-critical or critical, with the critical category continuing to create inefficiencies. Martel said progress has been made with most engine OEMs “except one,” which continues to have a significant impact on assembly lines. Demosky quantified the prior-year supply disruption headwind at more than 150 basis points of margin, and said Bombardier expects to begin recovering some of that in the second half of 2026, which is embedded in the company’s EBITDA guidance.
On capital allocation, Demosky said Bombardier is transitioning from a deleveraging phase to a capital allocation phase, but he said the company was “not in a position today” to announce a return of cash to shareholders in 2026. He said debt reduction remains a priority, with an eye toward reducing net leverage toward 1.5x over time, while also monitoring for tuck-in M&A. Management said the Velocity acquisition fits that approach, and Demosky added that any EBITDA accretion from Velocity would likely be more meaningful in 2027 than in 2026.
Executives also discussed production capacity. Martel said demand remains strong, and Bombardier is preparing to build more aircraft, while emphasizing the need for a robust supply chain. In response to a question about deliveries being skewed toward Q4, Demosky said supply chain lateness and ongoing production increases have contributed to the back-end loaded delivery profile, and he noted that U.S. customer preferences tied to accelerated depreciation can also drive fourth-quarter deliveries.
Finally, in response to a question about FAA engagement following public comments about decertifying Bombardier jets, Martel said Bombardier was not involved in the issue, describing it as a matter between Transport Canada, the FAA and a competitor, and said Bombardier has continued delivering aircraft and operating normally.
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.
