Blue Bird (NASDAQ:BLBD) executives said the school bus maker delivered a record fiscal 2026 first quarter, exceeding its own guidance across key metrics and extending a streak of outperformance to 13 consecutive quarters. Management also raised its full-year adjusted EBITDA outlook, citing strong pricing discipline, continued operational improvements, and robust order activity, while emphasizing that it expects to navigate tariff volatility to a “margin-neutral” outcome.
Record first quarter results and raised profitability outlook
For the fiscal first quarter ended Dec. 27, 2025, Blue Bird reported sales of 2,135 buses and revenue of $333 million, up 6% from the prior-year quarter. President and CEO John Weiskel said the company “beat guidance on all metrics” despite what he described as the “impact and volatility” tied to the administration’s tariff policies.
Blue Bird’s gross margin in the quarter was a record 21.4%, improving 220 basis points from last year. Radulescu attributed the gain to pricing actions, manufacturing efficiencies, and quality improvement, partially offset by increased labor and engineering costs.
On the company’s updated fiscal 2026 guidance, management maintained revenue expectations of $1.45 billion to $1.55 billion, but increased the adjusted EBITDA outlook. Radulescu said the company is raising adjusted EBITDA to a range of $215 million to $235 million (approximately 15%), and reiterated adjusted free cash flow expectations of $40 million to $60 million.
Orders and backlog strengthen ahead of the season
Weiskel said order intake in the quarter increased 45% versus the first quarter of fiscal 2025, driving backlog to a seasonally strong 3,400 units. Radulescu added that backlog included a record 25% EV content at quarter end.
Executives said the broader market backdrop remains supportive, pointing to an aging school bus fleet, a heavy replacement cycle, and pent-up demand stemming from industry supply issues in recent years. Weiskel said the “horizon ahead looks very good for school bus volumes.”
Pricing, tariffs, and margin drivers
Management said it remains “extremely disciplined” on pricing, noting that prices were higher than both the prior year and the prior quarter. The company said average bus revenue per unit increased by roughly $9,000 year over year to $144,000, driven by increased prices across products, including tariff-related pricing actions.
During Q&A, Radulescu characterized the first-quarter adjusted EBITDA improvement as roughly two-thirds driven by pricing and about one-third from improved efficiency and quality. He cautioned that costs can fluctuate due to supplier inflation and tariff changes, and said Blue Bird’s last pricing action was in November for the new model year, with benefits expected to show more in the second half of the fiscal year.
On tariffs, Radulescu said the company views them as a government-imposed tax and is working with suppliers to minimize impact amid shifting country-specific conditions. He said Blue Bird is providing dealers and customers fixed tariff pricing “all the way through June” for future deliveries and reiterated the company’s goal to remain margin neutral on tariffs.
Weiskel said year-over-year selling price increased by nearly $8,800 per bus, noting that the figure includes tariff recovery as part of the margin-neutral strategy, and that pricing was still higher even excluding tariffs.
EV demand, funding visibility, and all-power mix
Blue Bird sold 121 EVs in the quarter, representing about 6% of unit volume, and ended the quarter with 855 EVs in backlog, which management said extends into 2027. The company updated fiscal 2026 guidance to approximately 800 EV unit sales, while maintaining a longer-term view that EVs remain a strong fit for school buses due to duty cycles and charging intervals.
Weiskel said EPA Clean School Bus program rounds two and three “remain intact,” with funds flowing to customers. He also addressed media coverage suggesting rounds four and five would be discontinued, saying the company’s subsequent discussions in Washington provided “no such indication.” According to Weiskel, Blue Bird’s understanding is that the EPA is still working through how and when those funds will be administered, and that the program remains bipartisan. He added that the company’s short-term guidance is not dependent on federal funding for rounds four and five.
Management also reiterated that an $80 million Massachusetts contract with the U.S. Department of Energy remains intact to support funding for the company’s new plant in Fort Valley, despite “rumor” around grants. Weiskel said the company has not received any unfavorable direction from DOE.
Across all powertrains, Weiskel said all-power buses accounted for 48% of unit sales in the quarter. He said the powertrain strategy is a differentiator that supports stronger margins, but emphasized profitability was not compromised even with all-power mix dipping below 50%.
Commercial chassis timeline, automation roadmap, and capital allocation
Weiskel said Blue Bird took its first order for commercial chassis in January and continues testing and validation. He said production is now projected to start in late fiscal Q4, which would shift sales into fiscal 2027, as the company prioritizes design, cost, and quality over timing. Later, management clarified that planned strip chassis volume was effectively replaced with buses for fiscal 2026 unit expectations, with chassis revenue recognition expected in fiscal 2027 Q1.
On manufacturing strategy, Weiskel said the company completed an analysis of automation use cases and “locked in on a roadmap” that will be incorporated into a new assembly plant scheduled to launch in 2028. He said the initiative has a strong return and is intended to support ongoing cost improvements through Industry 3.0 and 4.0 opportunities.
Blue Bird also highlighted balance sheet strength. Radulescu said liquidity ended the quarter at a record $385 million, including $242 million in cash. The company executed $15 million of share repurchases in Q1, completing its prior $60 million program and beginning a new $100 million program with $95 million remaining.
When asked about longer-term uses of cash, Radulescu said Blue Bird plans significant investment in its new plant (including what he described as roughly $200 million over two years for the company’s portion) and increased spending on CapEx and engineering for upcoming emissions regulations. He said the company will revisit capital allocation regularly and noted that a dividend could be evaluated in the future, but “we are not quite there yet.”
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.
