Bombardier Q2 Earnings Call Highlights

Bombardier TSE: BBD.A reported higher second-quarter revenue, profit and free cash flow, with its services business reaching a quarterly record and management pointing to continued demand for large-cabin aircraft and defense platforms. For the quarter ended June 30, consolidated revenue rose 6% year over year to $2.15 billion. Adjusted EBITDA increased 9% to $325 million, while adjusted EBITDA margin improved 50 basis points to 15.1%. Reported EBIT was $225 million, or a 10.5% margin, and reported net income totaled $191 million. Chief Financial Officer Bart Demosky said the results reflected higher aircraft pricing, a favorable mix of Global aircraft and continued growth in the company’s service network. Aircraft manufacturing and other revenue increased by $38 million despite four fewer aircraft deliveries than a year earlier. Services Revenue Reaches Record Services revenue climbed 14% from a year earlier to a quarterly record of $674 million. Demosky said sustained activity across the global network supported the increase, while Chief Executive Officer Éric Martel said the business continues to benefit from increased aircraft utilization and expansion of Bombardier’s service footprint. Martel said the company’s aircraft fleet logged 6% more flight hours than a year ago, with Challenger aircraft hours up 7% and Global aircraft hours up 8%. He also cited growing activity among fleet operators and said Bombardier’s support capabilities remain a differentiator for customers operating aircraft internationally. The company announced during the quarter that it will expand its Singapore service center, a project expected to nearly double the facility’s capacity when it enters service in the second half of 2028. Bombardier is also pursuing service-network expansion in the U.S. and the United Arab Emirates, according to Martel. Bombardier also cited a recently announced 10-year service-support agreement with the Swedish Armed Forces. Management said it sees opportunities for organic and acquisition-driven growth in maintenance and other service capabilities, though Martel said the company would remain disciplined in evaluating potential acquisitions. Backlog, Aircraft Demand and Defense Opportunities Demosky said Bombardier’s backlog stood at $21.8 billion at the end of the quarter, up $4.3 billion from year-end 2025. The backlog was supported by a unit book-to-bill ratio of 1.5 times and a long-term services agreement with VistaJet signed in April. Martel said demand was broadly distributed across geographies and customer types, including fleet operators and individual buyers. He noted some moderation in the Middle East but said long-term demand in that region remains strong. Bombardier recorded 50 new aircraft orders during the quarter, he said. The Global 8000 remains a significant driver of customer interest, management said. Bombardier also announced a letter of intent with The Helicopter Company for up to 60 aircraft. On defense, Martel said customer interest is expanding globally, citing Canada’s and NATO’s selection of the Global 6500 platform for airborne early warning and control programs and a recently announced South Korean order. He said potential defense opportunities take time to translate into firm backlog and deliveries, but they provide confidence in longer-term demand. Bombardier is evaluating the creation of Canadian capabilities that could mirror aircraft-modification work it currently performs in Wichita, Kansas. Martel said the company could potentially conduct structural modifications, provisioning and some equipment installations in Canada in collaboration with partner Saab. Cash Flow and Debt Reduction Strengthen Financial Flexibility Free cash flow totaled $228 million in the second quarter, compared with a $164 million outflow in the p...