📌 At a Glance:
REV Group’s Q1 FY25 earnings are out and… let’s just say the engine stalled. Net sales were flat at $583.5 million, but profits and margins are leaking worse than an old school bus.
🔍 About the Company
REV Group, Inc. is a manufacturer of specialty vehicles — think fire trucks, ambulances, RVs, and buses. It operates under three main segments:
- Fire & Emergency
- Commercial
- Recreation (RVs)
You’ve likely seen their vehicles during either a road trip or a roadside emergency.
🧑💼 Key People
- Mark Skonieczny, CEO
- Amy Campbell, CFO
- They’re steering a multi-segment business, but Q1 showed some major bumps in each lane.
📊 Financials (Q1 FY25)
| Metric | Q1 FY25 | Q1 FY24 | YoY Change |
|---|---|---|---|
| Net Sales | $583.5 million | $583.5 million | 0% |
| Operating Income | $12.4 million | $25.6 million | ▼ 51.6% |
| Operating Margin | 2.1% | 4.4% | ▼ 230 bps |
| Net Income | $8.1 million | $15.1 million | ▼ 46.4% |
| EPS (Diluted) | $0.14 | $0.25 | ▼ 44% |
| Adjusted EBITDA | $24.3 million | $35.4 million | ▼ 31.4% |
Translation: Flat sales, collapsing margins. It’s like a RV that looks fine outside but the transmission is gone.
🧮 Forward-Looking Fair Value (FV) Estimate
Using EV/EBITDA of 7x (industry norm for specialty vehicles) on the adjusted annualized EBITDA of ~$97 million, FV estimate:
$680M–$720M market cap range → Stock may hover around that unless turnaround begins.
📈 Segmental Performance
- Fire & Emergency: Sales $267M (up slightly), but margins fell.
- Commercial: $100.2M sales, a 9.5% drop.
- Recreation (RVs): $216M sales, flat. No growth, just coasting.
📦 Backlog Check
- Total backlog: $2.2 billion, which sounds great… unless you realize a chunk of it is in low-margin businesses.
- Orders for the Recreation segment are down, signaling soft retail demand.
🧠 EduInvesting Take
REV is the kind of company that’s riding on brand legacy, not performance right now. The margins are diving, especially in the high-volume RV and commercial segments. If this were an actual road trip, we’d pull over and check the engine.
Not a crash yet. But certainly a warning light.
⚠️ Risks & Red Flags
- Fire segment has higher ASPs but production delays.
- Rising input costs with no offsetting price hikes.
- Weak RV retail demand (remember pandemic RV boom? That’s over).
Author: Prashant Marathe
Date: June 4, 2025
Tags: REV Group, Q1 FY25, RV Sector, Earnings Report, EduInvesting
