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.
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 prior-year quarter, and reached $588 million for the first half. The quarter’s cash generation included a $610 million increase in customer advances, partly offset by a $420 million investment in inventories and accounts payable. Capital expenditures were $110 million and net cash interest was $120 million.
Management said inventory investments were made to support expected deliveries later in the year. Demosky said the company expects a particularly active fourth quarter, with revenue, EBITDA and free cash flow weighted toward that period. Third-quarter results across key measures are expected to be similar to last year, he said.
Bombardier reduced net debt by $356 million during the quarter, including repayment of debentures due in 2026 and senior notes due in 2029. The company said gross debt reduction totaled $1.1 billion since year-end.
- Net leverage declined 16% to 1.6 times adjusted EBITDA.
- Bombardier reported approximately $1.9 billion of liquidity at quarter-end.
- The company refinanced $500 million of debt at a rate of 5.875%.
- Annual run-rate interest expense was reduced by a further $80 million.
- Bombardier said it has no debt maturities before November 2030.
The company also announced a new $750 million revolving credit facility, replacing its previous $450 million facility. Demosky said the strengthened balance sheet gives Bombardier flexibility to fund aircraft-output growth, service expansion, defense initiatives, potential acquisitions and, over time, potential shareholder returns.
Guidance Maintained as Supply Chain Pressures Persist
Bombardier reiterated its raised full-year 2026 guidance, including free cash flow of more than $1 billion. Demosky said the company remains confident in meeting the target and that third-quarter demand is shaping up strongly.
Management said supply chain constraints remain an industry issue and continue to affect costs and delivery timing, though Martel said several longer-standing challenges have improved or been resolved. Bombardier will not increase production solely to capture near-term demand, he said, emphasizing that capacity additions depend on durable demand and supplier readiness.
Martel said the company has begun expanding its Montreal manufacturing footprint to support longer-term delivery growth. He added that Bombardier expects fourth-quarter deliveries to remain seasonally elevated, in part because some customers prefer year-end delivery timing and because industry supply-chain delays can push aircraft completions later in the year.
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.
