REV GROUP INC (NYSE:REVG) Surpasses Q3 2025 Earnings Estimates with Strong Specialty Vehicles Performance

REV Group Inc (NYSE:REVG) reported fiscal third-quarter 2025 results that surpassed analyst expectations, driven by strong performance in its specialty vehicles segment. The manufacturer of fire apparatus, ambulances, and recreational vehicles posted both revenue and earnings that exceeded consensus estimates, prompting a positive market reaction in pre-market trading.

Earnings Performance Versus Estimates

The company demonstrated robust financial performance for the quarter ended July 31, 2025. REV Group reported net sales of $644.9 million, exceeding analyst estimates of $643.5 million. This represents an 11.3% increase compared to the same quarter last year when excluding the impact of divested bus manufacturing businesses.

More notably, the company's adjusted earnings per share came in at $0.79, significantly outperforming the consensus estimate of $0.65 per share. This strong earnings beat of approximately 22% reflects improved operational efficiency and pricing power within the company's core businesses.

Key financial highlights include:

• Net income of $29.1 million, compared to $18.0 million in Q3 2024
• Adjusted EBITDA of $64.1 million, up from $45.2 million year-over-year
• Consolidated net sales growth of 11.3% year-over-year

Market Reaction and Price Action

The market responded positively to the earnings beat, with shares rising approximately 9% in pre-market trading following the announcement. This reaction suggests investors were pleased with both the top-line and bottom-line outperformance, particularly given the challenging economic environment for manufacturing companies.

The stock had shown mixed performance in recent weeks, with a slight decline of 3.5% over the past week but a gain of 4.5% over the past month. The strong pre-market movement indicates the results may have exceeded market expectations more broadly.

Segment Performance and Operational Highlights

REV Group's strong results were primarily driven by its Specialty Vehicles segment, which manufactures essential vehicles for public services including fire apparatus and ambulances. The segment reported net sales of $483.3 million, representing a 24.6% increase compared to the prior year quarter when excluding the impact of divested businesses.

Specialty Vehicles segment Adjusted EBITDA increased 71.4% to $64.6 million, reflecting higher shipments, favorable product mix, and effective price realization. The segment's backlog stood at $4.3 billion at quarter-end, indicating sustained demand.

The Recreational Vehicles segment showed more modest growth, with net sales increasing 9.7% to $161.7 million. However, segment Adjusted EBITDA declined 13.8% to $8.1 million, primarily due to tariff impacts on imported luxury vans and increased dealer assistance programs.

Updated Fiscal 2025 Outlook

Management provided updated guidance for the full fiscal year 2025, raising expectations across key metrics:

• Net sales guidance range of $2.40-$2.45 billion (prior: $2.35-$2.45 billion)
• Adjusted EBITDA guidance range of $220-$230 million (prior: $200-$220 million)
• Adjusted net income guidance range of $127-$138 million (prior: $112-$130 million)
• Free cash flow guidance range of $140-$150 million (prior: $100-$120 million)

This updated outlook compares favorably to analyst estimates for full-year sales of $2.45 billion, suggesting management confidence in continued strong performance through the remainder of the fiscal year.

Balance Sheet and Capital Allocation

The company maintained a solid financial position with $36.0 million in cash and net debt of $54.0 million as of July 31, 2025. Trade working capital decreased to $191.6 million from $248.2 million at the prior fiscal year-end, primarily due to timing of accounts payable and lower inventory levels.

REV Group's board declared a regular quarterly cash dividend of $0.06 per share, maintaining the company's commitment to returning capital to shareholders while continuing to invest in operational capacity expansions.

For more detailed earnings information and future estimates, readers can view the complete earnings data and analyst projections here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or recommendation to buy or sell any securities. Readers should conduct their own research and consult with a qualified financial professional before making investment decisions.