Q3 2025 Bombardier Inc Earnings Call

I'd like to turn the discussion over to Mr. Francis can you see the Lafleche Vice President.

P E S. P N E and Investor Relations for going back to me. Please go ahead Sir.

Good morning, everyone and welcome to <unk> earnings call for the third quarter 2025.

Speaker #1: So we have a very detailed plan . And on how we are going to reduce costs in our company between now and 2030 .

I wish to remind you that during the course of this call we may make projections or other forward looking statements regarding future events or the financial performance of the corporation. There are risks that actual events or results may differ materially from these statements.

Speaker #3: Bonjour , Mesdames et messieurs . Bienvenue le sur les résultats du deuxieme trimestre de Bombardier . Cette teleconference est enregistrée dans la parole .

Speaker #1: And we are acting on this plan already . And the the strategy you just alluded to is , is definitely a some a big part of that .

Speaker #3: And Monsieur Francis Richard de la Fleche , vice president relations avec les investisseurs , Bombardier . Monsieur Richard Lafleche , Monsieur Francis Richard Lafleche Bonjour a tous la teleconference téléphonique sur les résultats de pour le troisieme trimestre .

For additional information on forward looking statements and underlying assumptions please refer to the MD&A.

This cautionary statement on behalf of each speaker on this call.

Speaker #8: Thank you . Thank you very much for the call , Eddie .

With me today is our president and Chief Executive Officer, Eric Myself, and our executive Vice President and Chief Financial Officer, Bart The Muskie to review our operations and financial results for the third quarter ended September 32025.

Speaker #1: Thank you .

Speaker #2: Thank you .

Speaker #1: Benoit Benoit .

Speaker #4: Next question will be from Gavin Parsons at UBS . Please go ahead .

Speaker #3: Je vous NE pouvons faire des projections d'autres perspectives concernant les événements , les résultats de la société et les résultats sensiblement , declarations pour un complement information sur la declaration prospective et les hypotheses sur le rapport de gestion mis en garde au nom de toutes les personnes qui intervient apple .

Speaker #1: Good morning . Gavin .

I'd now like to turn over the discussion to Eric.

Speaker #9: Bookings year to date . Sounds like a good line of sight into deliveries and just hoping you could kind of just walk through the puts flow guided .

Not all of the <unk> bone Julie.

To some I think good morning, everyone and thank you for joining us today.

Speaker #2: Yeah . Thanks , Gavin . So ? So free cash flow . As you know , for us , we know a lot about it throughout the year because of the big backlog that we have .

So I have to start by saying bombard G is next is in an excellent position our third quarter results I've put us in a confident that to meet our 2025 guidance as we focus on executing our plan for a very strong end of year.

Speaker #3: Je suis encore chef de la direction Eric Martel et vice president , executive chef de la direction financiere Bart Demosky , qui ont commencé nos activité et nous résultat financier pour le trimestre .

Speaker #2: And we know we have great certainty around our delivery profile and the number of aircraft and type of aircraft that will deliver in the fourth quarter .

Before I dive into the numbers I want to take a moment to reflect on a few strategic accomplishments.

Speaker #3: A Eric Martel . Monsieur Eric Martel Bonjour et bienvenue . Merci de vous joindre a nous aujourd'hui . Bombardier et on . Excellent position .

Speaker #2: So , so that's the first big piece we're going to enjoy higher profitability because of that , which will be driving a big free cash flow quarter .

From this past quarter.

Speaker #2: And as I mentioned earlier , the mix is going to be very favorable towards the globals relative to challengers . So that's the first part of it .

That also represents a perfect view of our long term strategy.

Yesterday, Mark an important moment for Bombardier the global 8000.

Speaker #3: Nous résultat du troisieme trimestre . Nous place en bonne voyage pour atteindre un objectif pour alors qu'il NE nous concentrer sur la mise en oeuvre de Notre temps pour terminar la on force avant Q bard et moi , meme NE nous plongeons dans les chiffres pour revenir sur quelques réalisations stratégiques du trimestre , écoulée , qui illustré parfaitement Notre strategy a long term .

Speaker #2: We're very confident that we're we'll obviously hit our range within each quarter , though obviously we we do have variability in order activity and in order mix .

The world's fastest business that received transport Canada type certification.

These aircrafts leads the industry with a maximum speed of Mack <unk> $9 95, and the lowest cabin altitude of endy business jet in production. The program's journey will next continue with entry into service of our first.

Speaker #2: And that drives initial payments that can vary somewhat . So I mentioned earlier in my comments , Eric did as well that we have great line of sight .

Speaker #2: The market is very active and and so , you know , we have a high confidence obviously , that that will will land within the range that we've provided for guidance for the year .

Aircraft before the end of the year.

Speaker #3: Here a marqué a moment important pour bombardier le global remedy . La for le plus rapidement et result la certification de type de Transport Canada .

The global 8000 crowns a lot of recent successes at Bombardier.

On the performance front for the third year in a row Bombardier ranked amongst the <unk> top performing stocks and achievement very few companies in the <unk> index indexes history ever reached.

Speaker #9: For anything that you're seeing on that . As I pointed out , a pretty low book to Bill would be needed to reach the low end of the free cash guide .

Speaker #3: Cette avion est le pointe de l'industrie avec une Vitesse maximal . De Max a la plus faible altitude . De tous les avion d'affaires in production , the programme se poursuivent avec la maison service de Notre premier avion avant la fin de l'année .

Speaker #2: Yeah , we're not seeing signs right now . Gavin , of a low book to bill for the quarter . In fact , the market in Q three obviously was very robust and that pattern or path has continued here in Q4 .

When it comes to our services, our customers I've spoken loud and clear.

Being ranked first in both the AI and in pro pilot products Survey results.

Speaker #3: The global wimille vient couronné les nombre de bombardier sur le des bombardier pour la troisieme année consecutive . Parmi les actions , les plus performance du T6 , une réussite d'entreprises ont jamais dans de l'indice .

It's not just a recognition of our aircraft reliability.

Speaker #2: We've got a very strong I'll call it pipeline of order activity happening right now . And it spreads across all markets and all customer types with a lot of interest in defense .

But it's also a recognition of our people. It reflects the strength of the team. We've built one that is United by a single mission, putting our customers at the very art of everything we do day in and day out.

Speaker #2: So we're we're very pleased with where we sit right now . Okay . Thanks , Gavin .

Speaker #3: AU service se sont exprimé au effort . Notre premier place dans les enquetes de satisfaction and ProPilot récompense non seulement la fiabilité de nous avion , mais aussi le travail de nos collaborateurs .

We also took a bold step forward launching our U S expansion in August in October we began concrete actions with the announcement of our New service Center in Fort Wayne, Indiana.

Speaker #4: Next question will be from Cameron Dirksen at National Bank . Please go ahead .

Speaker #10: Yeah . Thanks . Good morning . I wanted to follow up on wanted to follow up on the free cash flow question , because you sort of mentioned that you'd be evaluating production rates .

And let me be clear this is just the beginning.

Speaker #10: You know , in 2026 with a with a view to perhaps increasing deliveries in 2027 . You've got $900 million in free cash flow , kind of target out there that you've talked about in the past .

Speaker #3: La force de l'équipe Q nous avons constitué par une seule mission classée no client au coeur de tout activité quotidienne . Nous avons également une étape importante en Notre expansion États-Unis , en route .

This facility will significantly strengthened bombardier footprint in the Midwest, placing us closer to key cities and customers.

Speaker #10: Just wondering if we do get a production rate increase , you know , plan for 2027 . How does that affect the working capital ?

Once fully operational in the second half of 2026. This center will offer world class maintenance repair and overall capabilities for all of our aircraft.

Speaker #3: On October , nous avons commencé a concrete en l'ouverture d'un nouveau centre de service a fort Wayne , Indiana , et l'histoire qu'en début cette installation renforcée considérablement la présence de bombardier dans le midwest , nous ont des villes et des clients clé une fois au second semester .

Speaker #10: How does that affect I guess the getting to that $900 million of free cash flow target .

Most importantly, it will create approximately 100 high skilled jobs further reinforcing our commitment to grow to our customers and to the communities we operate it.

Speaker #1: So maybe let me just start . So yes , we're looking at it now . It may take even further than 2027 . By the way .

Speaker #1: It's a it's a long process , especially with the state of the supply chain . Again will be very prudent in making sure that , you know , we can deliver .

This past quarter also marked a key milestone in the evolution of our U S manufacturing footprint in August we officially inaugurated our new component manufacturing facility in more park, California, replacing our previous Los Angeles a reoperation.

Speaker #1: So usually it creates two things . If we increase the rate , it means that we're going to yes , build some inventory to do that .

Speaker #3: Si centre des capacités de maintenance de réparation et de révision des class mondial pour tout en avion plus important encore , IL environ sont en auto qualifié renforcement de Notre engagement .

Speaker #1: But at the same time , we will probably increase also the initial payment because we're going to have more airplanes to sell . So usually we're trying to to neutralize as much as possible .

The new 46000 square foot site offers a modern and collaborative environment.

<unk> to the expertise of our highly skilled team producing components for our global <unk> 75, and global 8000 business jet.

Speaker #3: Faveur de la croissance de nos clients et des communautés dans lesquelles . Nous sommes présent . A également une étape important l'évolution de Notre présence industrial au États-Unis , nous avons officiellement inaugurated Notre nouvelle cuisine de fabricacion de composants a more in Californie was installations de la région de Los Angeles .

Speaker #1: It may be not a perfect science that it's going to happen always at the same quarter , but overall , on the long run , clearly this should happen .

Our third quarter momentum as also carried into the fall we deepened our presence in Asia through an agreement with <unk> Corporation, one of Japan's leading business jet providers.

Speaker #1: So we're optimistic that demand on some of the platform is so strong right now . And as you know , we have quite a good lead .

Speaker #1: Also on fleet operator , we've been very successful with fleet operator over the years . It's a big portion , and the fleet operator also continue to grow .

They placed an order for both our global 6500, and a global 8000 flagship aircraft.

Speaker #3: Le nouveau site de offers un environment moderne et collaborative adapté , a expertise de Notre équipe automotive qualifier qui produit pour nous bioreactor d'affaires global et global .

Speaker #1: Significantly right now . And when I put over and above all of this , you know , some defense opportunity that we're working on , you know , I think it's justified to clearly have a look at it carefully .

This order was served as the foundation for Japan's first large business Jets shared ownership program.

Bombardier Defense also continued to gain significant traction we delivered the ninth Bombardier global aircraft to the U S Air Force for the Bacon program and we signed a 10 year service agreement with Chevron, Nevada Corporation to support two global 6500 aircraft equipped with <unk> X 10.

Speaker #3: La dynamique , the troisieme trimestre également pour nous avons renforcer Notre presence en AC grace a un accord avec sojitz corporation , l'un des principales de aviones d'affaires au Japon .

Speaker #1: But again , discipline will prevail . We'll ramp up . And I think overall , you know , we should see neutralized cash flow because of the increase of IP initial payment coming in .

Speaker #1: And progress payment .

Speaker #3: The Société a passer une commande pour des avions Fairey Global et le global remiel de base , au premier programme japonais de Propriétés partagée d'avions d'affaires de grande de défense a également continued a gagner du terrain .

Speaker #10: Okay . That makes sense . Appreciate the time .

Knowledge.

Bombardier defense will contribute to our future growth meaningfully and we are already seeing a strong foundation.

Speaker #2: Thank you . Thank you Cameron .

Speaker #1: Thank you Cameron .

Speaker #4: Next question will be from Jordan Leone at Bank of America . Please go ahead .

In fact, we anticipate a growing number of aircraft deliveries in Q4.

Speaker #11: Morning . Thank you for taking the question , Eric . On the on the fleet strength that you guys are seeing from those customers .

Speaker #3: Nous avons livré la nuit avions Bombardier Global l'armée dans le cadre du programme baron et nous avons été de Dickson avec la Sierra Nevada Corporation pour assurer la maintenance de avions global .

What's important to highlight here is that some aircraft. This thing for a defense mission or green or modified aircraft delivered directly from our facilities in Toronto in Wichita.

Speaker #11: Is there anything else that's changed from them that gives you more assurance that now is the time to raise rates ? And I know you guys announced bond was the largest one , but is there anything else that you guys are seeing for replacement cycle ?

This creates extra capacity or flexibility in our Montreal completion lines as they focused primarily on deliveries to civil customers.

Speaker #3: L'Équipe de la technologie x Bombardier Défense de maniere significative a future et nous déja qui sont en fait , une augmentation du nombre de livraisons d'avion au quatrieme trimestre .

Speaker #2: Yeah .

Speaker #1: No , but I think it's a great question . First of all , you know , some of these fleet operator from the start , you know , have airplane to replace , you're absolutely right .

This separation allows us to scale, our defense operation efficiently without having pressure to our core business jet production lines at critical times of the year.

Speaker #1: So there is a replacement cycle also that will take place in the next five years . But at the same time , the , the , the do continue to grow .

Speaker #3: IL est important de certains avions destinée a des missions de défense sont des avions non-armenian ou modifier directement nos instalacion de Toronto et de Wichita .

At the same time demand remains strong across our entire portfolio and our backlog remains at a five year high levels with a healthy balance between individual and fleet customer.

Speaker #1: I was quoting yesterday with the , with the board , you know , that we we have seen the fleet operator just a bombardier plane .

Speaker #3: Une capacité ou a flexibility supplémentaire dans nos achievements de Montréal , qui se concentrer sur les livraison a civil . Cette separation nous permet de faire efficacy .

As we prepare for the second half of the decade.

Speaker #1: They're flying 62% more hours than they were in 2019 . So this is like a significant growth over five , six years . And you know , they're clearly the leader in terms of growth in business aviation in terms of hours .

We are in a position to begin rehab rehab, a leading some longer term production rates in areas, where our facilities in the supply chain ecosystem, good support increases to meet demand.

Speaker #3: Nos activités de défense sans ajouter de sur chaine de production d'affaires qui sont le coeur de métiers , a critique de l'année dans le meme temps .

Speaker #1: A lot of people have adapted or buying shares of plane or by hours or whatever the program is . But we've seen amazing momentum and that momentum , you know , has not plateaued yet .

That said our top priority will remain to keep the operational discipline and customer focus that have defined our success until now.

Speaker #3: La demande rest forte sur l'ensemble de Notre portefeuille et un carnet . Commande se mantiene et des niveaux élevée inégales depuis cinquante avec un équilibre satisfaisante entre les individual et les flots .

For Q4, we once again anticipate a more back loaded delivery profile similar to 2024, our teams are working well to manage the tight schedule and meet all our customer commitments.

Speaker #1: You know , a lot of people thought it was , but it doesn't this year . I think they're up by another five , 6% compared to last year .

Speaker #3: Alors nous nous préparent pour la seconde moitié de la décennie , nous sommes en mesure de commencer a reviewer . Certain toed production a long term dans les domaines ou nos installations , et nos .

Speaker #1: And we definitely see , you know , newcomers as you you mentioned , you know , bond earlier and and the fleet operator that we've been serving for decades , you know , definitely continue to to to see a stellar , you know , intake of of order and programs .

Of the risk, we monitor proactively supply chain come to us to be our top priority and what we can assure you is that our teams are working with agility and discipline to mitigate disruptions.

Speaker #3: Ecosystem de la chaine d'approvisionnement pour soutenir des augmentations afin de répondre a la demande de Notre priorité absolute de maintenir . La discipline operational et l'orientation client qui ont une Notre success jusqu'a présent pour la quatrieme trimestre .

Speaker #1: And we're going to be there to serve our customer , you know , so so the opportunity is quite amazing in the next five years .

With that in mind, let me return to the Q3 results themselves.

Speaker #1: Still .

Speaker #3: Une fois plus un de livraison plus concentré en fin des années similar a celui de nos travail pour le calendrier sera et tenir tout nos engagement , client .

Speaker #11: Great. Thank you so much.

We had a double digit growth for several of our key metrics, starting with 13% more deliveries and 11% more revenues, including a 12% more revenues from services.

Speaker #1: Thank you sir .

Speaker #2: Thank you George .

Speaker #4: Next question will be from Seth Seifman at JP Morgan . Please go ahead .

Speaker #11: Yeah . Hey guys , this is Alex on . for Seth .

Speaker #12: Thanks for taking the question . You know , maybe on good morning . Maybe to ask a question on services . You know , I think you guys have talked about this medium term growth target of , you know , mid to high single digits in the past .

16% more adjusted EBIT.

Speaker #3: Parmi les proactive , la chaine d'approvisionnement reste de Notre priorité absolue et vous travail avec agility et regu pour les perturbations . AU résultats du troisieme trimestre , nous avons on a two pour plusieurs indicateurs clés 3%

And 59% more adjusted net income our free cash flow was even more significant with a generation of $152 million, which is $279 million higher than last year.

Speaker #12: You know , clearly over the past few years , you know , significantly outperformed that . I mean even this year you're up 11% year to date .

These are results of the entire team is very proud of as we continue to demonstrate our strong growth potential and high levels of performance.

Speaker #12: You know you talk about opening up this new service center in Fort Wayne , Indiana . Just trying to think through , you know , is there any kind of potential upside that you guys see to this ?

We've also taken some action in the third quarter that focus are strengthening our bet on strengthening our balance sheet.

Speaker #12: You know , target now that you know , everything's performed so well .

Speaker #3: So .

Mark will go will cover that in more details as well as our commitments to continue retiring debt and meeting.

Speaker #1: , you know , this is an amazing story or service center . You know , in 2020 we were $1 billion business . Last year we've achieved 2.2 ish .

Benoit Poirier: This call is being recorded. At this time, I'd like to turn the discussion over to Monsieur Francis Richer de la Flèche, Vice President, FP&A, and Investor Relations for Bombardier. Please go ahead, sir.

Are on track net leverage objectives.

Speaker #1: So we more than doubled the business in a in about four years . And and we're not done . That's the great news .

We are entering the final stretch of 2025 with excellent momentum across the board and most importantly, I've stared meaningful cash generation ahead of what will be a very large fourth quarter for deliveries our growth across all key indicators reflect the entire team's relentless.

Francis Richer de la Flèche: Good morning, everyone, and welcome to Bombardier's earnings call for the third quarter 2025. I wish to remind you that during the course of this call, we may make projections or other forward-looking statements regarding future events or the financial performance of the corporation. There are risks that actual events or results may differ materially from these statements. For additional information on forward-looking statements and underlying assumptions, please refer to the MD&A. I'm making this cautionary statement on behalf of each speaker on this call. With me today is our President and Chief Executive Officer, Éric Martel, and our Executive Vice President and Chief Financial Officer, Bart Demosky, to review our operations and financial results for the third quarter ended 30 September 2025. I would now like to turn over the discussion to Éric.

Speaker #1: So as you know , in the first part of the decade we've we've increased significantly our international presence . And and right now as we as we mentioned earlier , we are increasing our presence in the US .

<unk> focus on executing our plan and supporting our customers. The Bombardier team is on track for a strong year end.

Speaker #1: You know , we just announced a new service facility in Indiana . We have planned to do probably another two announcements , you know , in the next year or so , Paul and his team are working diligently on this to make sure we are at the right place and we do the right investment again .

On that note over to you to dive deeper into the numbers.

Okay. Thank you, Eric and good morning, everyone.

Speaker #1: We'll remain disciplined , but the beauty of that business is , again , you know that we have more than 5000 planes in service most of the time .

The entire Bombardier team is very pleased with the results we've shared with you today.

Simply put Q3 was a quarter of strong execution continued year on year growth and significant progress across our key strategic objectives.

Speaker #1: Customers prefer to come to the if they're present . That's why being in the Midwest was strategic for us and important for our customer base and for us .

Bart Demosky: Alors, merci Francis. Bonjour et bienvenue à tous, à toutes et à tous ce matin. Good morning, everyone, and thank you for joining us today. I have to start by saying Bombardier is in an excellent position. Our third-quarter results have put us in a confident path to meet our 2025 guidance as we focus on executing our plan for a very strong end of year. Before Bart and I dive into the numbers, I want to take a moment to reflect on a few strategic accomplishments from this past quarter that also represent a perfect view of our long-term strategy. Yesterday marked an important moment for Bombardier. The Global 8000, the world's fastest business jet, received Transport Canada-type certification. This aircraft leads the industry with a maximum speed of Mach 0.95 and the lowest cabin altitude of any business jet in production.

Speaker #1: So now that we're there and giving the capability , we also know how predictable that business is , because we know that the airplane will deliver .

And as we enter the final stretch of the year, we're in a great position to deliver on our full year commitments.

As Eric mentioned Q3 was a standout quarter, our backlog climbed to a five year high of $16 6 billion supported by a robust one three times unit book to Bill ratio.

Speaker #1: Ten years ago is going to go into a major maintenance as an example . So this is calendar driven . Most of the time .

Speaker #1: So we pretty much know exactly when that airplane will be . So we can work on it already . And plan for that .

We delivered more aircraft more service revenues more EBITDA and more free cash flow on a year ago.

Speaker #1: That's why we're planning the capacity because we know for sure that today's capacity will not be enough to meet the demand . Otherwise we'll lose market share .

We also continued to bring down the cost of our debt after having refinanced another $250 million at a favorable interest rate.

Speaker #1: And that's not the plan . Actually . We're we're we're we're baking on on a bigger market , but also on gaining market share by being more present at the right place .

We were once again included in the <unk> 30 list for the third consecutive year, recognizing the top 30 performing stocks on the exchange over the three year period ending June 32025.

Speaker #1: And there's other things we do also . So so I think that the , the opportunity that you saw arising in the last five years will definitely continue to grow at a at a very fast pace .

At the same time, we've seen continued strengthening of our institutional shareholder base underscoring our confidence in our long term potential.

Speaker #1: Again . So we're very active . We're opening centers , you know , we're building capacity to meet demand to grow . You know , our market share .

Bart Demosky: The program's journey will next continue with entering the service of our first aircraft before the end of the year. The Global 8000 crowns a lot of recent successes at Bombardier on the performance front. For the third year in a row, Bombardier ranked amongst the TSX 30's top-performing stocks, an achievement very few companies in the index's history have ever reached. When it comes to our services, our customers have spoken loud and clear. Being ranked first in both the AIN and Pro Pilot product survey results is not just a recognition of our aircraft reliability, but it's also a recognition of our people. It reflects the strength of the team we've built, one that is united by a single mission: putting our customers at the very heart of everything we do, day in and day out. We also took a bold step forward, launching our US expansion in August.

These achievements combined with a very strong backdrop for business aviation.

Put us right, where we want to be to close out the year.

Speaker #1: At the same time , we're training people to do that . So it's a it's a it's a fun challenge . Today we we have in the network .

Turning to the financials, we delivered strong year over year performance total revenue for the quarter reached $2 3 billion, an 11% increase year over year.

Speaker #1: Undreds of airplanes every day today , every morning we take the picture how many airplanes are we working on ? It's pretty significant .

We delivered 34 aircraft up four units versus Q3 of last year.

Speaker #1: It's actually double than what it was five years ago . So we're excited about this and this . You you can our assumption is that the trend will continue .

In terms of mix, we had 13 medium and 21 large aircraft deliveries.

In line with the reversal towards a more global heavy mix of deliveries in the second half of this year.

Speaker #2: Yeah . And Alex , just just to add to add to to Eric's comments , just to help with the numbers a little bit the mid to high single digit growth that we've , we've forecasted is primarily driven by baseline growth alone .

I had mentioned during our last call.

As a result manufacturing and other revenue rose by $172 million compared to Q3 of 'twenty four driven.

Speaker #2: So that's coming from , more flight hours , more aircraft in the service centers that we already have in place . Aging of the fleet .

Driven by the incremental deliveries favorable mix.

And increased pricing.

Our services business also continued to perform exceptionally well generating $590 million in revenue this quarter, a 12% increase year over year, and representing roughly 25% of total quarterly revenue.

Speaker #2: And fact that we're replacing , you know , Learjets with the globals and challengers , etc. , and with price increases on an annual basis .

Speaker #2: So that's what drives that growth , incremental to that , to give you kind of the sense of upside is gaining more market share .

Bart Demosky: In October, we began concrete actions with the announcement of our new service center in Fort Wayne, Indiana. Let me be clear, this is just the beginning. This facility will significantly strengthen Bombardier's footprint in the Midwest, placing us closer to key cities and customers. Once fully operational in the second half of 2026, this center will offer world-class maintenance, repair, and overall capabilities for all of our aircraft. Most importantly, it will create approximately 100 high-skilled jobs, further reinforcing our commitment to grow, to our customers, and to the communities we operate in. This past quarter also marked a key milestone in the evolution of our US manufacturing footprint. In August, we officially inaugurated our new component manufacturing facility in Moorpark, California, replacing our previous Los Angeles area operation.

Year to date services are up 11% and.

And we have set the stage for strong continued growth for years to come.

Speaker #2: And we've , you know , the we've we've talked about the potential to get to as high as 70% market share in coming years .

Turning to profitability adjusted EBITDA came in at $356 million up 16% year over year with a margin of 15, 4%.

Speaker #2: This will take some effort . Obviously . But Eric just talked about we're opening more service center capacity in the United States . That will be part of the answer to to how to get there .

60 basis point improvement over the same period last year.

Speaker #2: That'll that'll attract more customers to us . As the OEM . And in addition , we're going to make some of those small targeted investments , M&A in particular tuck ins .

Margin growth was driven by improved aircraft mix and stronger pricing.

Was partly offset by transitory supply chain related costs.

Speaker #2: To acquire capability and service licensing for major components like landing gear , you know , like engine repair , perhaps , and a variety of other things .

Adjusted for this item, our EBITDA margins would have well exceeded 16%.

Our adjusted EBIT was $227 million, a 13% increase over the over Q3 of last year.

Speaker #2: And those those are the upside elements . And and we're working on those plans to execute on them right now .

Adjusted net income rose sharply to $129 million up 59% year over year, driven by strong execution and reflecting the growing earnings power of our businesses.

Speaker #12: Awesome . Thanks , guys . I'll keep it at one today .

Speaker #1: Thank you so much .

Speaker #2: Thanks , Alex .

Three adjusted EPS increased 64% to $1 21 versus the same period last year.

Speaker #4: Next question will be from Noah Poponak at Goldman Sachs . Please go ahead .

Bart Demosky: The new 46,000sq ft site offers a modern and collaborative environment tailored to the expertise of our highly skilled team producing components for our Global 7500 and Global 8000 business jet. Our third-quarter momentum has also carried into the fall. We deepened our presence in Asia through an agreement with Sojitz Corporation, one of Japan's leading business jet providers. They placed an order for both a Global 6500 and a Global 8000 flagship aircraft. This order will serve as a foundation for Japan's first large business jet shared ownership program. Bombardier Defense also continued to gain significant traction. We delivered the ninth Bombardier Global aircraft to the US Air Force for the BACN program, and we signed a 10-year service agreement with Sierra Nevada Corporation to support two Global 6500 aircraft equipped with RAPCON-X technology.

Moving to cash we generated $152 million of free cash flow in the quarter, representing a $279 million improvement compared to Q3 of last year.

Speaker #13: Hey , good morning everyone .

Speaker #2: Good morning .

Speaker #13: A few follow ups . Just a few follow ups on the cash flow statement . I guess it would be a little surprising if you were at the low end of 2025 , given the book to Bill is always a part of the calculus and is trending well .

Year over year improvement is the result of higher earnings and improved working capital, which was driven by increased customer advances and lower inventory investments in.

Speaker #13: But to be at the high end , you have to do 1,000,000,001 of free cash in the fourth quarter , which would be up a lot year over year with deliveries up a little .

In Q3, we invested $128 million in inventories, which was largely funded by a $101 million increase in customer advances.

Speaker #13: But but not a ton . So could you just maybe shed a little bit more light on , you know , why you haven't changed that range or what would get you a low end versus high end .

Capex and net interest was $38 million and 78 million respectively for the quarter.

In July we also made our final residual value guarantee payment of $22 million.

Speaker #13: And then as we go to 2026 , do you feel like you are tracking to the 900 million or greater framework you've had or not for any reason ?

As I mentioned earlier, we continue to strengthen our balance sheet with an additional $250 million debt refinancing at a favorable interest rate.

Speaker #13: And I just want to make sure . Eric , it sounded like you were pointing to . Neutral ish change in working capital .

And earlier this week, we announced.

And at par debt repayment of just under $100 million that will be effective on December 3rd and we'll clear remaining balance of our 2027 notes.

Speaker #13: Is that is that the right number ? Because that's obviously been a pretty significant swing the last few years .

Bart Demosky: Bombardier Defense will contribute to our future growth meaningfully, and we are already seeing a strong foundation. In fact, we anticipate a growing number of aircraft deliveries in Q4. What's important to highlight here is that some aircraft destined for defense missions are green or modified aircraft delivered directly from our facilities in Toronto and Wichita. This creates extra capacity or flexibility in our Montreal completion lines, as they focus primarily on deliveries to civil customers. This separation allows us to scale our defense operation efficiently without adding pressure to our core business jet production lines at critical times of the year. At the same time, demand remains strong across our entire portfolio, and our backlog remains at a five-year high level, with a healthy balance between individual and fleet customer.

Our debt retirement plan remains on track and we expect to continue making debt repayments in the coming months.

Speaker #2: Yeah . Hi . Good morning Noah . So , so we've we've been consistent in our guidance all year on on free cash flow .

Liquidity for Q3 remains solid at a pro forma $1 38 billion adjusted for the debt repayment. We made in early Q3 and in line with our targeted range of 1% to one 5 billion.

Speaker #2: And we're not going to move off of it here in the fourth quarter . What we have highlighted clearly is that it's a very busy and strong market right now for for New Order activity .

Looking ahead to the balance of the year, we are on track to meet our full year guidance, we expect to deliver a fourth quarter with very strong margins, resulting from a higher mix of large cabin aircraft, including defense 6500, Global 75, hundreds and our first global 8000, which just yesterday risk.

Speaker #2: That is something that obviously , depending on how many of those new orders actually get executed in the quarter , can swing the cash flow quite materially .

Speaker #2: If you think about just a couple of sales , that could be delivered in the same quarter , and you can be talking 100 , 200 million of free cash flow , very quickly .

Transport, Canada certification.

Speaker #2: So that's why we don't , you know , try to project beyond , you know , the next very short period of time .

These dynamics, along with expected stronger earnings and inventory release are setting the stage in Q4.

Speaker #2: And we and we stick to our , we stick to our guidance . What we also have said , though , is we are expecting a very strong margin quarter , very profitable .

It's been a great year, so far for Bombardier and our team is fully focused on closing the year in a strong fashion.

Before turning the page and next year's plan, which we will look forward to discussing during our next call in February.

Bart Demosky: As we prepare for the second half of the decade, we are in a position to begin reevaluating some longer-term production rates in areas where our facilities and the supply chain ecosystem could support increases to meet demand. That said, our top priority will remain to keep the operational discipline and customer focus that have defined our success until now. For Q4, we once again anticipate a more backloaded delivery profile, similar to 2024. Our teams are working well to manage the tight schedule and meet all our customer commitments. Of the risks we monitor proactively, supply chain continues to be our top priority, and what we can assure you is that our teams are working with agility and discipline to mitigate disruptions. With that in mind, let me return to the Q3 results themselves.

Speaker #2: The deliveries , as Eric highlighted , are are all set to go . The engines are all here . So we we have every confidence that we'll be making our plans .

With that I'll. Thank you very much and I'll turn it over to Francis to begin the Q&A.

Speaker #2: And when it comes to next year , we'll we'll be happy to to talk more about our guidance for 2026 when we meet in February .

Thanks, Mark I'd like to remind you that the minority Investor Relations team is available following the call in the coming days to answer any questions you may have.

For the question period, please limit yourself to one question and one follow up with that we'll open up for questions. Operator. Please go ahead.

Speaker #13: Okay . Thank you .

Speaker #1: Thank you , thank you so much .

Speaker #4: This time I would like to turn the call back over to Francis Ritchie de La Fleche .

Thank you, Sir ladies and gentlemen, if you do have any questions. Please press star followed by one on your Touchtone phone you will then hear a prompt that Johan has been raised and should you wish to decline from the polling process. Please press star followed by two and if you're using a speakerphone you will need to lift your handset first before.

Speaker #3: Thank you . Before I pass it to Eric for the conclusion . For those who were following the presentation online , I think we had a technical issue displayed the slides for the second quarter instead of third quarter .

Speaker #3: So I apologize for that miscue . The correct size are available on our website , and the replay of the presentation will be posted with the correct ones .

Before pressing any Keith.

Please go ahead and press Star one now if you have any questions.

Speaker #3: So with that , I'll pass it to Eric for his closing remarks . Yeah .

First we will hear from Tim James of TD Cowen. Please go ahead.

Speaker #1: Thank you to all of you for joining us today. Your continued interest in Bombardier and in the progress we're making means a great deal to us.

Thanks, very much good morning, everyone.

I'm just wondering first if you could talk about.

Bart Demosky: We had double-digit growth for several key metrics, starting with 13% more deliveries, 11% more revenues, including 12% more revenues from services, 16% more adjusted EBITDA, and 59% more adjusted net income. Our free cash flow was even more significant, with a generation of $152 million, which is $279 million higher than last year. These are results the entire team is very proud of, as we continue to demonstrate our strong growth potential and high levels of performance. We've also taken some action in the third quarter that focuses on strengthening our balance sheet. Bart will cover that in more detail, as well as our commitments to continue retiring debt and meeting our on-track net leverage objectives.

Speaker #1: You've heard we are delivering on our commitment , executing with discipline , agility and building a strong , resilient company that is focused on performance , innovation and also a long term value creation .

How you see the potential for that.

Capital deployment for M&A going forward the balance sheet just gets better.

After quarter Youre in a very strong position here just wondering what youre thinking about in terms of external capital deployment at this point what types of opportunities you would consider.

Speaker #1: So thank you all . And I look forward to speaking with you again in the New Year .

Or or capabilities that you'd like to build.

Speaker #4: Yes , sir . Ladies and gentlemen , this does conclude the conference call for today . Once again , thank you for attending .

Now this is <unk>. Thanks.

Thanks for the question. This is a great question.

Speaker #4: And at this time we do ask that you please disconnect your lines . Enjoy the rest of your .

Actually it over or having a discussion as we speak internally about this but I think the principle that will guide US is first of all we will remain extremely disciplined as a company.

We know that.

We've done extremely well over the last five years, our stock has grown everything.

And we've paid quite a bit of debt, which we're going to continue to do.

But between now and the end of the year.

But this gives us optionality.

Walking into the next portion of the next half of the decade and those options will be.

Bart Demosky: We are entering the final stretch of 2025 with excellent momentum across the board, and most importantly, I've steered meaningful cash generation ahead of what will be a very large fourth quarter for deliveries. Our growth across all key indicators reflects the entire team's relentless focus on executing our plan, and supporting our customers. The Bombardier team is on track for a strong year-end. Bart, on that note, over to you to dive deeper into the numbers.

We could still reimbursed at which is always an option.

We will definitely continue to invest in our program I think it's important and when I say our program. It means our existing program, we'll look at all our options. But also there is very nice a fortunate is shaping up for the defense business also that we will consider investing.

So clearly you need to think about some product.

Investment mainly improvement on our existing product, which have still capability to do so defense, but then at the same time, we left the door open on potential M&A and let me characterize this a little bit.

Francis Richer de la Flèche: Thank you, Eric. Good morning, everyone. The entire Bombardier team is very pleased with the results we've shared with you today. Simply put, Q3 was a quarter of strong execution, continued year-on-year growth, and significant progress across our key strategic objectives. As we enter the final stretch of the year, we are in a great position to deliver on our full-year commitments. As Eric mentioned, Q3 was a standout quarter. Our backlog climbed to a five-year high of $16.6 billion, supported by a robust 1.3x unit book-to-bill ratio. We delivered more aircraft, more service revenues, more EBITDA, and more free cash flow than a year ago. We also continued to bring down the cost of our debt after having refinanced another $250 million at a favorable interest rate.

Don't think of some major.

Purchase there were more thinking of incremental.

That could have value to our existing.

The business of services and defense mainly.

So this is where we see value right now we know that we have amazing.

Attention to grow organically and both of those businesses between now and 2030, but if a fortunate to occur too.

We do.

A bigger portion of the maintenance work as an example.

Or in defense, you know using our existing capability, we will definitely consider those so I guess.

All options are on the table, but I think what I should say is you should keep in mind that we'll be extremely disciplined with our capital deployment. We will continue to support mainly the business. We are already in and that's really only the business, where our OLED and I should say.

Francis Richer de la Flèche: We were once again included in the TSX 30 list for the third consecutive year, recognizing the top 30 performing stocks on the exchange over the three-year period ending 30 June 2025. At the same time, we've seen continued strengthening of our institutional shareholder base, underscoring confidence in our long-term potential. These achievements, combined with a very strong backdrop for business aviation, have put us right where we want to be to close out the year. Turning to the financials, we delivered strong year-over-year performance. Total revenue for the quarter reached $2.3 billion, an 11% increase year-over-year. We delivered 34 aircraft, up four units versus Q3 of last year. In terms of mix, we had 13 medium and 21 large aircraft deliveries, in line with the reversal towards a more global heavy mix of deliveries in the second half of this year, which I had mentioned during our last call.

And we will we will be important mistake at the same time if ever a fortunate Dr cure.

For small incremental.

<unk> services in defense.

Very helpful. Thank you Mike Thanks for your question.

This week's Canadian budget, the planned changes to the luxury tax in Canada.

You Press released.

Talking about 600 potential.

New jobs for Canada could you talk about how you see that potential change in the luxury tax impacting.

Your business.

Yes first of all we were extremely happy about the decision of the government I think they realized themselves that.

Francis Richer de la Flèche: As a result, manufacturing and other revenue rose by $172 million compared to Q3 of 2024, driven by the incremental deliveries, favorable mix, and increased pricing. Our services business also continued to perform exceptionally well, generating $590 million in revenue this quarter, a 12% increase year-over-year, and representing roughly 25% of total quarterly revenue. Year to date, services are up 11%. We have set the stage for strong continued growth for years to come. Turning to profitability, adjusted EBITDA came in at $356 million, up 16% year-over-year, with a margin of 15.4%. A 60 basis point improvement over the same period last year. Margin growth was driven by improved aircraft mix and stronger pricing, but was partly offset by transitory supply chain-related costs. Adjusted for this item, our EBITDA margins would have well exceeded 16%. Our adjusted EBIT was $227 million, a 13% increase over Q3 of last year.

There was no value had is to have this stacks for the taxpayer actually neither for the government, but clearly.

We said that publicly this week this will create jobs.

At Bombardier and its supplier base so.

You have to think about this along this way usually Canada was a very strong market for Bombardier first of all we have the majority of the market.

You have to think about about 10 airplanes, a year and in the last couple of years since the luxury tax.

Got implemented.

We were thinking of where we're more delivering about two to three planes a year. So there was a major setback for us on the Canadian market that we dominate so clearly.

Now.

What the opportunity is is catching up I have a lot of customer that I've been talking to that says you know I am not going to place an order and buy a play until this taxes. There now that the taxes out we have catch up to do so you should expect a significant entries because first of all we have a bit of catch up to do on the Canadian <unk>.

And this has always been a an amazing market you know when you compared to the size of the country the economy compared to the rest of the world and the number of airplane, we're selling year, it's actually a very very strong. So so we're excited about this.

Francis Richer de la Flèche: Adjusted net income rose sharply to $129 million, up 59% year-over-year, driven by strong execution and reflecting the growing earnings power of our businesses. Q3 adjusted EPS increased 64% to $1.21 versus the same period last year. Moving to cash, we generated $152 million of free cash flow in the quarter, representing a $279 million improvement compared to Q3 of last year. The year-over-year improvement is the result of higher earnings and improved working capital, which was driven by increased customer advances and lower inventory investments. In Q3, we invested $128 million in inventories, which was largely funded by a $101 million increase in customer advances. CapEx and net interest were $38 million and $78 million, respectively, for the quarter. In July, we also made our final residual value guarantee payment of $22 million.

I can tell you. We're currently having phone calls coming in so that we can discuss the next purchase of our Canadian customer.

Okay. That's really helpful. Thank you Eric.

Thank you Sir.

Next question will be from Myles Walton at Wolfe Research. Please go ahead.

Thanks, Good morning.

Could you help us with the fourth quarter implied margins towards.

Towards 19% and that's 400 basis point increase what would be the driver of that.

Obviously.

The higher than what you've seen in the past and maybe just these transitory supplier costs.

Or are they.

Really behind you at this point.

Or could they still be there in the fourth quarter.

Yeah, Thanks, Myles and good morning Q.

Q4 is I think probably everyone on the call knows and has traditionally been a very strong quarter for us.

It's a quarter, where we have customers.

Francis Richer de la Flèche: As I mentioned earlier, we continued to strengthen our balance sheet with an additional $250 million debt refinancing at a favorable interest rate. Earlier this week, we announced an FPAR debt repayment of just under $100 million that will be effective on 3 December 2024 and will clear the remaining balance of our 2027 notes. Our debt retirement plan remains on track, and we expect to continue making debt repayments in the coming months. Liquidity for Q3 remains solid at a pro forma of $1.38 billion, adjusted for the debt repayment we made in early Q3, and in line with our targeted range of $1 to $1.5 billion. Looking ahead to the balance of the year, we are on track to meet our full-year guidance.

<unk> traditionally are looking to receive aircrafts.

For accelerated depreciation purposes in the United States and it also tends to be a quarter, where we have a very strong mix.

Of large cabin aircraft relative to our mid size aircraft.

Those large cabin aircrafts are bringing higher pricing.

Generally greater margins, it's typical that the large cabin aircraft, particularly the <unk> 7500 commands a much higher margin than we are delivering a very large number of those aircrafts along with the the first 8000 in.

In Q4, so that will be part of it.

We also anticipate or have plans to deliver about 40% of our total deliveries for the year in the fourth quarter as you can imagine on a quarterly basis, we're spreading our fixed costs our costs across much more aircrafts, so thats driving.

Francis Richer de la Flèche: We expect to deliver a fourth quarter with very strong margins, resulting from a higher mix of large cabin aircraft, including Defense 6500s, Global 7500s, and our first Global 8000, which just yesterday received Transport Canada-type certification. These dynamics, along with expected stronger earnings and inventory release, are setting the stage in Q4. It's been a great year so far for Bombardier, and our team is fully focused on closing the year in a strong fashion before turning the page to next year's plan, which we will look forward to discussing during our next call in February. With that, I'll thank you very much, and I'll turn it over to Francis to begin the Q&A.

Margin accretion as well.

Services demand in the fourth quarter tends to be equally as high as we get customers preparing for the following year and they place large parts orders. So we know that part of our business is going to be very busy and then as well.

Mentioned and Mike.

Prepared comments that we're anticipating delivering.

A fairly significant number of defense aircraft, particularly 65 hundreds in the quarter.

We've talked about the margin profile for our defense business.

Bart Demosky: Thanks, Bart. I'd like to remind you that the Bombardier Investor Relations team is available following the call in the coming days to answer any questions you may have. For the question period, please limit yourself to one question and one follow-up. With that, we'll open up for questions. Operator, please go ahead.

Profile, which is very strong spreads across both the green aircraft that we deliver and the modifications that.

If we pro forma those aircraft for delivery. So all of those things combined are going to.

Drive.

Operator: Thank you, sir. Ladies and gentlemen, if you do have any questions, please press star followed by one on your touch-tone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. If you're using a speakerphone, you will need to lift the handset first before pressing any keys. Please go ahead and press star one now if you have any questions. First, we will hear from Tim James at TD Cowen. Please go ahead.

Considerable margin improvement in the quarter when it comes to supply chain headwinds. This has been something that I think the whole industry has been dealing with obviously for a number of years now you've probably heard on prior calls with the other Oems.

We continue to collectively see supply chain challenges, but release is starting to happen.

Eric mentioned this on the last call that we were we've been starting to see this our own supply chain team has been working very very hard with our suppliers to drive improvement and we're now at the point where for the first time in probably four years.

Tim James: Thanks very much. Good morning, everyone. I'm just wondering first if you could talk about how you see the potential for capital deployment for M&A going forward. The balance sheet just gets better quarter after quarter. You're in a very strong position here. Just wondering what you're thinking about in terms of external capital deployment at this point, what types of opportunities you would consider, or capabilities that you'd like to build.

Where we're back to what we would characterize as normal number of late parts to law. So the supply chain has normalized except for maybe the one kind of acute area. What we've talked about which continues to be engine. So that all means that the headwind we've been facing from out of work.

Our out of order work incremental cost is going to start to become claw back we're expecting some of that to happen next year throughout the year and that will continue into 'twenty seven is well, let me miles to have just maybe one or two comments to buy Bard says very clearly.

Éric Martel: Yeah, thanks for the question. This is a great question. Actually, we're having a discussion as we speak internally about this. I think the principle that will guide us is, first of all, we will remain extremely disciplined as a company. We know that. We've done extremely well over the last five years. Our stock has grown, everything. We've paid quite a bit of debt, which we're going to continue to do between now and the end of the year. This gives us optionality walking into the next portion of the next half of the decade. Those options will be, we could still reimburse debt, which is always an option. We will definitely continue to invest in our program. I think it's important. When I say our program, it means our existing program.

But on the defense side, Okay. Just to help you characterize what we what we have ahead of US is the fact that we've delivered so far this year about four decent spring.

The number of plain, we're thinking in the fourth quarter, you have to think of a double digit number.

Around so so thats clearly.

Significant margin increase.

Increase for us in this in the fourth quarter the second thing.

<unk> comment on the supply chain, we're right.

Myself engines as you know has been has been the biggest challenge our overall shortages I've done down to a manageable level engine, where the main country I was myself a couple of days ago on the shop floor and I was walking the factory and I Havent seen engines waiting on the receiving dock for a long time.

Éric Martel: We'll look at all our options, but also there's very nice opportunity shaping up for the defense business also that we will consider investing. Clearly, you need to think about some product investment, mainly improvement on our existing product, which I have still capability to do so, defense. At the same time, we left the door open on potential M&A. Let me characterize this a little bit. Don't think of some major purchase there. We're more thinking of incremental that could add value to our existing business of services and defense, mainly. This is where we see value right now. We know that we have amazing potential to grow organically in both of those businesses between now and 2030. If opportunity occurred to do a bigger portion of the maintenance work, as an example.

Actually for years and now it's starting to occur.

Come up so so I've seen some of their program I think I would say we have two programs that are in a good catch up right now one remains fragile and the other thing I have to say that gives us strong confidence for the fourth quarter is the fact that protein for a couple of weeks now we have all the engines, we need to deliver year end and I'm pretty.

Much of the parts, so which gives us very strong confidence for our delivery in the fourth quarter.

Okay, Great color, Eric maybe just a quick one you said reevaluate higher rates is that a reevaluation for higher rates in 2026 in a material way or more beyond 2026.

Yes.

I would say today beyond 2026.

We are in a great place as you know in our backlog, but having too much backlog also can become a problem because now youre selling airplane into 'twenty eight 'twenty nine if not more so we have to reassess that but as I said, we'll be extremely disciplined I'm not going to and the team won't do it.

Éric Martel: In defense, using our existing capability, we will definitely consider those. I guess all options are on the table, but I think what I should say is you should keep in mind that we'll be extremely disciplined with our capital deployment. We will continue to support mainly the business we are already in, actually only the business we are already in, I should say. We'll be opportunistic at the same time if ever opportunity occurs for a small incremental on services and defense.

If we don't see the supply chain will will follow us. So there is great detail of work right now on some program and I'm sure you realize I won't mention which one it is a strategic and so for us, but we are thinking of.

Diligently working at the capability of the supply chain and I think if the capability of the supply chain conclusion is that we.

Tim James: Very helpful, Eric. Thank you. My follow-up question. This week's Canadian budget, the plan changes to the luxury tax in Canada. You pressed release talking about 600 potential new jobs for Canada. Could you talk about how you see that potential change in the luxury tax impacting your business?

Possible and we can do it then we will clearly have strong consideration for some of the programs.

Okay.

Our next question will be from Ben Westwater.

Please go ahead.

Yes. Thank you very much good morning, you did good morning Bart.

I was hoping to one there.

Éric Martel: Yeah. First of all, we were extremely happy about the decision of the government. I think they realized themselves that there was no value added to have this tax for the taxpayer, actually, neither for the government. Clearly, and we said that publicly this week, this will create jobs at Bombardier and its supplier base. You have to think about this along this way. Usually, Canada was a very strong market for Bombardier. First of all, we have the majority of the market. You have to think about about 10 airplanes a year. In the last couple of years since the luxury tax got implemented, we were thinking of we were delivering about two to three planes a year. There was a major setback for us on the Canadian market that we dominate. Clearly, now what the opportunity is, is catching up.

Yes. According to an article obviously, you've talked about the potential to increase production rates on the challenger, but also you're looking to maybe move a few parts.

Manufacturing around the globe. So I was wondering if you could maybe talk a little bit more.

About the potential for cost savings and maybe the potential for margin improvement.

As you bring the challenger production rate higher and as you move a few parts around the globe.

I think they have been why this is this is a great question.

We always.

No need to be mindful of.

Tenuously, reducing our costs.

But also.

Derisking our supply chain all the time, so I guess.

Some of the project were laying out right now, we'll do boat they will help us to to improve the margin of our products. It will help us to de risk may be some of the supply chain.

Éric Martel: I have a lot of customers that I've been talking to that say, I'm not going to place an order and buy a plane until this tax is there. Now that the tax is out, we have catch-up to do. You should expect a significant increase because, first of all, we have a bit of catch-up to do on the Canadian market. This has always been an amazing market when you compare the size of the country, the economy compared to the rest of the world, and the number of airplanes we're selling here. It's actually very, very strong. We're excited about this. I can tell you we're already having phone calls coming in so that we can discuss the next purchase of a Canadian customer.

And we'll bring quite a bit of benefit and there could be the one also.

It will give us the unfortunate you need to go faster on some of the program. So I guess when we are assessing all of this we have a very clear roadmap.

And our plan we are already banking on some some margin improvement on our program.

And some of it can come from pricing, but some of it also will come from from reducing our costs. So we have a very detailed plan on how we are going to reduce cost in our company between now and 2030.

Tim James: Okay. That's really helpful. Thank you, Éric.

Éric Martel: Thank you, sir.

And we are acting on this plan already and the strategy you just alluded to is definitely.

Operator: Next question will be from Miles Walton at Wolfe Research. Please go ahead.

Miles Walton: Thanks. Good morning. Bart, could you help us with the fourth quarter implied margins toward 19% and that 400 basis point increase? What would be the driver of that? Obviously, higher than what you've seen in the past. Maybe just these transitory supplier costs, are they really behind you at this point, or could they still be there in the fourth quarter?

Some are big part of that.

Thank you. Thank you very much for the color on it.

Thank you Thank you, Denmark, Mississippi bandwidth.

Next question will be from Gavin Parsons of UBS. Please go ahead.

Hi, good morning.

Okay bookings year to date, it sounds like good line of sight into deliveries.

Hoping you could kind of just walk through the puts.

Bart Demosky: Yeah. Thanks, Miles, and good morning. Q4, as I think probably everyone on the call knows, has traditionally been a very strong quarter for us. It's a quarter where we have customers who traditionally are looking to receive aircraft for accelerated depreciation purposes in the United States. It also tends to be a quarter where we have a very strong mix of large cabin aircraft relative to our midsize aircraft. Those large cabin aircraft are bringing higher pricing, generally greater margins. It's typical that the large cabin aircraft, particularly the 7500, commands a much higher margin, and we are delivering a very large number of those aircraft along with the first 8000 in Q4. That will be part of it. We also anticipate or have plans to deliver about 40% of our total deliveries for the year in the fourth quarter.

Got it.

Yes, thanks, Kevin so.

So free cash flow as you know for us.

We know a lot about it throughout the year because of the big backlog that we have and we know we have great certainty around our delivery profile and the number of aircrafts and type of aircraft that will deliver in the fourth quarter. So so that's the first big piece, we're going to enjoy higher profitability because of that which will be driving.

A big free cash flow quarter, and as I mentioned earlier, the mix is going to be very favorable towards the globals relative to challenges. So that's the first part of it we're very confident that we're well obviously hit our range within each quarter, though.

Obviously, we do have variability in order activity and in order mix and that drives.

Initial payments that can vary somewhat so I mentioned earlier in my comments, Eric did as well that we have great line of sight.

Bart Demosky: As you can imagine, on a quarterly basis, we're spreading fixed costs across much more aircraft. That's driving margin accretion as well. Services demand in the fourth quarter tends to be equally as high as we get customers preparing for the following year, and they place large parts orders. We know that part of our business is going to be very busy. I mentioned in my prepared comments that we're anticipating delivering a fairly significant number of defense aircraft, particularly 6500s in the quarter. We've talked about the margin profile for our defense business. That profile, which is very strong, spreads across both the green aircraft that we deliver and the modifications that we perform on those aircraft for delivery. All of those things combined are going to drive considerable margin improvement in the quarter.

The market is very active.

And.

So we have a high confidence obviously that that will we will land within the range.

That we provided for guidance for the year.

Or anything that youre seeing on that.

As you pointed out a pretty low book to bill would be needed to reach those go into the free cash guide.

Yes, we're not seeing signs right now are gathering of low book to bill for the quarter in fact, the market in Q3, obviously was very robust and that.

Pattern or path. That's continued here in Q4, we've got a very strong I'll call. It pipeline of order activity happening right now and it spreads across all markets.

And all customer types.

With a lot of interest in defence. So we're we're very pleased with where we sit right now.

Okay. Thanks, Kevin.

Bart Demosky: When it comes to supply chain headwinds, this has been something that I think the whole industry has been dealing with, obviously, for a number of years now. You've probably heard on prior calls with the other OEMs that we continue to collectively see supply chain challenges, but relief is starting to happen. Eric mentioned this on the last call that we've been starting to see this. Our own supply chain team has been working very, very hard with our suppliers to drive improvement, and we're now at the point where for the first time in probably four years, we're back to what we would characterize as normal number of late parts to lot. The supply chain has normalized, except for maybe the one kind of acute area that we've talked about, which continues to be engines.

Our next question will be from Kamran Dukson at National Bank. Please go ahead.

Yeah. Thanks, good morning.

I wanted to good morning Cameron.

Wanted to follow up on the free cash flow question as you sort of mentioned that you'd be evaluating.

Production rates in.

In 2026, with a view to perhaps increasing deliveries in 2027.

Got you a $900 million in free cash flow kind of target out there.

<unk> talked about in the past I'm just wondering if we do get a production rate increase.

Our plan for 2027.

How does that affect the working capital how does that affect I guess.

Getting to that $900 million kind of free cash flow target.

So maybe let me just clarify so yes, we're looking at it now it may take even further than 2027 by the way. It's a it's a long process, especially with the state of the supply chain again, we'll be very prudent in making sure that we can deliver so usually occurs.

Bart Demosky: That all means that the headwind we've been facing from out of work or out of order work, incremental cost, is going to start to become clawed back. We're expecting some of that to happen next year, throughout the year, and that will continue into 2027 as well. Let me, Miles, add just maybe one or two comments to what Bart says very clearly. On the defense side, just to help you characterize what we have ahead of us, is the fact that we've delivered so far this year about four defense planes. The number of planes we're thinking in the fourth quarter, you have to think of a double-digit number. Around. That's clearly a significant margin increase for us in the fourth quarter. The second thing, Bart's comment on the supply chain, we're right.

<unk>, if we increase the rate it means that we're going to build some inventory to do that but at the same time, we will probably increase also the initial payment because we're going to have more airplanes to sell so usually we're trying to.

To neutralize as much as possible it may be not a perfect science that is going to happen always of the same quarter, but overall.

In the long run clearly this should happen. So we're optimistic that demand on some of the platform is so strong right now and as you know.

We have a quite a good lead also on fleet operator.

We've been very successful with fleet operator over the years, it's a big portion of the fleet. Operator also continue to grow significantly right now and when I put over and above all of this some defense opportunity that we're working on.

Bart Demosky: Engines, as you know, has been the biggest challenge. Our overall shortages have gone down to a manageable level. Engines were the main concern. I was myself a couple of days ago on the shop floor, and I was walking the factory, and I haven't seen engines waiting on the receiving dock for a long time, actually for years, and now it's starting to come up. I've seen some of the program. I think I would say we have two programs that are in a good catch-up right now. One remains fragile.

I think it justify to clearly have a look at it carefully but again discipline will prevail with a ramp up and I think overall, we should see.

Neutralized cash flow because of the increase of IP initial payments coming in and progress payments.

Okay that makes sense appreciate the time.

Bart Demosky: The other thing I have to say that gives us strong confidence for the fourth quarter is the fact that probably for a couple of weeks now, we have all the engines we need to deliver year-end and pretty much all the parts, which gives us very strong confidence for our delivery in the fourth quarter.

Thank you. Thank you. Thank you Cameron.

Next question will be from Jordan.

Bank of America. Please go ahead.

Good morning, Thanks for taking the question.

Hello, John.

We treat the strength that you guys are seeing from those customers is there anything else.

Miles Walton: Great color. Eric, maybe just a quick one. You said reevaluate higher rates. Is that a reevaluation for higher rates in 2026, in a material way, or more beyond 2026?

That's changed from them.

That gives you more assurance that now is the time to raise rates.

I know you guys have announced a bond with the largest one but is there anything else that you guys are seeing for replacement cycle.

Éric Martel: Yeah, I think I would say today beyond 2026 we are in a great place, as you know, with our backlog. Having too much backlog also can become a problem because now you're selling airplanes in 2028, 2029, if not more. We have to reassess that. As I said, we'll be extremely disciplined. I'm not going to, and the team won't do it, if we don't think the supply chain will follow us. There's great detail of work right now on some program. I'm sure you realize I won't mention which one. It is strategic and full for us, but we are thinking of diligently working at the capability of the supply chain. I think if the capability of the supply chain conclusion is that it's possible and we can do it, then we will clearly have strong consideration for some of the programs.

Yes.

But I think it's a great question first of all you know some of these fleet operator.

From the start have airplanes to replace Youre absolutely right. So there is a replacement cycle also that will take place in the next five years.

But at the same time, the do continue to grow.

I was quoting yesterday with the board.

We have seen.

Seen the fleet operator, just a bombardier plane.

They're flying 62% more hours than they were in 2019. So this is like a significant growth over a five to six years.

<unk>.

They are clearly the leader in terms of growing in business aviation in terms of hours a lot of people have adapt or buying shares of plane or by hours or whatever the program is.

We've seen amazing momentum and that momentum.

You know as not plateaued yet.

Lot of people thought it was but it doesn't this year I think they are up by another 500% to 6%.

Operator: Next question will be from Benoit Poirier at Desjardins. Please go ahead.

Compared to last year, and we definitely see.

You know new comers as you mentioned.

Benoit Poirier: Yes, thank you very much. Good morning, Eric. Good morning, Bart.

Bond earlier and the fleet operator that we've been serving for decades, we definitely continue to to to see stellar.

Éric Martel: Bonjour, Benoit.

Benoit Poirier: Yeah. According to an article, obviously, you've talked about the potential to increase production rate on the Challenger, but also you're looking to maybe move a few parts in terms of manufacturing around the globe. I was wondering if you could maybe talk a little bit more about the potential for cost saving, and maybe the potential for margin improvement, as you bring the Challenger production rate higher and as you move a few parts around the globe.

The intake of order and programs and we're going to be there to serve our customer. So so the opportunity is quite amazing in the next five years too.

Great. Thank you so much.

Thank you Sir Thank you Jordan.

Next question will be from Seth Hoffman of Jpmorgan. Please go ahead.

Yeah, Hey, guys. This is Alex on for SaaS. Thanks for taking the question.

Éric Martel: I think, Benoit, this is a great question. We always need to be mindful of continuously reducing our costs, but also derisking our supply chain all the time. I guess some of the projects we're laying out right now will do both. They will help us to improve the margin of our product, they will help us to derisk maybe some of the supply chain, and will bring quite a bit of benefit. There could be the one also that will give us the opportunity to go faster on some of the program. I guess when we are assessing all of this, we have a very clear roadmap. In our plan, we are already banking on some margin improvement on our program, and some of it can come from pricing, but some of it also will come from reducing our costs.

Good morning, maybe to ask a question on services I think you guys have talked about this medium term growth target of mid to high single digits from the past clearly over the past few years.

<unk> outperformed that I mean, even this year, you're up 11% year to date.

Talk about opening up this new service center in Fort Wayne, Indiana, I'm, just trying to think through.

Any kind of potential upside that you guys see to that target now.

Alright, thanks for fiber to tower.

No.

This is an amazing story our service center.

2020, we were $1 billion business.

Last year, we have achieved two two ish.

So we've more than doubled that business.

And about four years.

And we're not done that's the great news. So as you know in the first part of the decade, we've we've increased significantly our international presence.

Éric Martel: We have a very detailed plan on how we are going to reduce costs in our company between now and 2030. We are acting on this plan already. The strategy you just alluded to is definitely a big part of that.

And right now.

As we mentioned earlier, we are increasing our presence.

In the U S. We just announced the new service facility in Indiana, We have planned to do probably another two announcements in the next year or so Paul and his team are working diligently on this to make sure. We are at the right place and we do the right investments again, we will remain disciplined.

Benoit Poirier: Thank you. Thank you very much for the color, Éric.

Éric Martel: Thank you.

Bart Demosky: Thank you, Benoit. Merci, Benoit.

Operator: Next question will be from Gavin Parsons at UBS. Please go ahead.

The beauty of that business is again, you know that we have more than 5000 planes in service.

Bart Demosky: Good morning.

Éric Martel: Good morning, Gavin.

Most of the time customer prefer to come to the OEM. If they are present, that's why being in the Midwest was strategic for us and important for our customer base and for us.

Miles Walton: Bookings year to date, sounds like good line of sight into deliveries. I was hoping you could kind of just walk through the cash flow guided.

So now that we're there.

And giving that capability. We also know all predictable that businesses, because we know that the airplane with deliver 10 years ago is going to go into.

Bart Demosky: Yeah, thanks, Gavin. Free cash flow, as you know, for us, we know a lot about it throughout the year because of the big backlog that we have, and we know we have great certainty around our delivery profile and the number of aircraft and type of aircraft that we'll deliver in the fourth quarter. That's the first big piece. We're going to enjoy higher profitability because of that, which will be driving a big free cash flow quarter. As I mentioned earlier, the mix is going to be very favorable towards the Globals relative to Challengers. That's the first part of it. We're very confident that we'll obviously hit our range. Within each quarter, though, we do have variability in order activity and in order mix, and that drives initial payments that can vary somewhat.

Major maintenance as an example, so this is calendar driven most of the time, so we pretty much know exactly when that airplane will be so we can work on is already and plan for that that's why we're planning the capacity because we know for sure that today's capacity will not be enough to meet that demand.

Although as we will lose market share and thats not the plan actually.

We are making on a bigger market, but also on gaining market share by being more present at the right place and there is other things we do also.

So so I think that the opportunity that you saw are rising in the last five years, we will definitely continue to go at.

Bart Demosky: I mentioned earlier in my comments, Eric did as well, that we have great line of sight. The market is very active. We have a high confidence, obviously, that we'll land within the range that we've provided for guidance for the year.

Or at a very fast pace again, so we're very active we're opening centers, we're building capacity to meet demand to grow.

Our market share at the same time, we're training people to do that so it's it's it's.

Our fund challenge today, we we have in the network <unk> of airplane everyday today every morning, we think the picture of how many airplanes. We're working on it's pretty significant its actually double than what it was five years ago. So we're excited about this and this you can our assumption is that the trend will continue.

Miles Walton: Is there anything that you're seeing on that? As pointed out, a pretty low book-to-bill would be needed to reach the low end of the free cash guide.

Bart Demosky: Yeah. We're not seeing signs right now, Gavin, of a low book-to-bill for the quarter. In fact, the market in Q3, obviously, was very robust, and that pattern or path has continued. Here in Q4, we've got a very strong, I'll call it, pipeline of order activity happening right now, and it spreads across all markets and all customer types, with a lot of interest in defense. We're very pleased with where we sit right now. Okay. Thanks, Gavin.

Yes.

Just just to add to add to Eric's comments.

To help with the numbers a little bit.

The mid to high single digit growth that we've.

We forecasted.

Primarily driven by baseline growth alone so thats coming from more flight hours more aircraft in the service centers that we already have in place.

Aging of the fleet.

The fact that we're replacing.

Lear jets with the globals and challenges et cetera, and with price increases on an annual basis. So that's what drives that growth incremental to that to give you a kind of a sense of upside is gaining more market share and we've.

Operator: Next question will be from Cameron Doerksen at National Bank. Please go ahead.

Miles Walton: Yeah, thanks. Good morning. I wanted to.

Bart Demosky: Good morning, Cameron.

Miles Walton: Follow up on the free cash flow question because you sort of mentioned that you'd be evaluating production rates in 2026 with a view to perhaps increasing deliveries in 2027. You've got a $900 million free cash flow kind of target out there that you've talked about in the past. Just wondering if we do get a production rate increase planned for 2027, how does that affect the working capital? How does that affect, I guess, the getting to that $900 million kind of free cash flow target?

We've talked about the potential to get to as high as 70% market share in coming years. This will take some effort, obviously, but Eric just talked about we're opening more service center capacity in the United States that will be part of the answer to how to get their collateral that will attract more customers to us as the OEM. In addition.

We're going to make.

Some of those small targeted investments M&A in particular tuck ins.

To acquire capability and service licensing four major components.

Éric Martel: Maybe let me just clarify. Yes, we're looking at it now. It may take even further than 2027, by the way. It's a long process, especially with the state of the supply chain. Again, we'll be very prudent in making sure that we can deliver. Usually, it creates two things. If we increase the rate, it means that we're going to, yes, build some inventory to do that. At the same time, we will probably increase also the initial payment because we're going to have more airplanes to sell. Usually, we're trying to neutralize as much as possible. It may be not a perfect science that it's going to happen always at the same quarter. Overall, on the long run, clearly, this should happen. We're optimistic that demand on some of the platform is so strong right now. As you know.

Like.

Landing gear.

Like engine repair perhaps.

A variety of other things in those those are the upsides elements and when we're working on those plans to execute on them right now.

Awesome, Thanks, guys I'll keep it at one today.

Thank you so much thanks Alex.

Next question will be from Noah <unk> at Goldman Sachs. Please go ahead.

Hey, good morning, everyone.

Good morning.

Follow up just.

Just a few follow ups on the cash flow statement.

I guess it would be a little surprising if you're at the low end of 2025.

Given the book to Bill.

Always a part of the calculus and is trending well.

To be at the high end you have to do a $1 billion amount of free cash in the fourth quarter, which would be up a lot year over year with deliveries.

Éric Martel: We have quite a good lead also on fleet operator. We've been very successful with fleet operator over the years. It's a big portion, and the fleet operator also continues to grow significantly right now. When I put over and above all of this, some defense opportunity that we're working on, I think it justified to clearly have a look at it carefully. Again, discipline will prevail, will ramp up, and I think overall, we should see a neutralized cash flow because of the increase of IP initial payment coming in and progress payment.

Up a little bit, but not a ton.

Mark could you just maybe shed a little bit more light on.

While you haven't change that range or what would get you a low end versus high end.

And then as we go to 2026 do you feel like you are tracking to the <unk>.

$900 million are greater framework, you've had or not for any reason.

I just want to make sure Eric it sounded like you're pointing to neutral ish.

Change in working capital is that is that the right number because that's obviously been a pretty significant swing in the last few years.

Miles Walton: Okay, that makes sense. Appreciate the time.

Éric Martel: Thank you.

Bart Demosky: Thank you, Cameron.

Éric Martel: Thank you, Cameron.

Yes, hi, good morning, North so so we've been consistent in our guidance.

Operator: Next question will be from Jordan Lianne at Bank of America. Please go ahead.

All year on on free cash flow and we're not going to move off of it here in the fourth quarter of what we have highlighted.

Miles Walton: Morning. Thank you for taking the question. Eric, on the fleet strength that you guys are seeing from those customers, is there anything else that's changed from them that gives you more assurance that now is the time to raise rates? I know you guys announced Bond was the largest one, but is there anything else that you guys are seeing for a replacement cycle?

Clearly as said, it's a very busy and strong market right now for new order activity.

That is something that obviously, depending on how many of those new orders actually get executed in the quarter can swing.

Cash flow quite materially you think about just a couple of sales that could be delivered in the same quarter and you can be talking 100 $200 million.

Éric Martel: Yeah. No, I think it's a great question. First of all, some of these fleet operators from the start have airplanes to replace. You're absolutely right. There is a replacement cycle also that will take place in the next five years. At the same time, they do continue to grow. I was quoting yesterday with the board that we have seen the fleet operator, just a Bombardier plane, they're flying 62% more hours than they were in 2019. This is significant growth over five, six years. They're clearly the leader in terms of growth in business aviation in terms of hours. A lot of people have adapted or buy shares of plane or buy hours or whatever the program is. We've seen amazing momentum, and that momentum has not plateaued yet. A lot of people thought it was, but it doesn't.

Our free cash flow very quickly so that's why we don't.

Try to project beyond the next very short period of time, and we stick to our we stick to our guidance. What we also said, though is we are expecting a very strong margin quarter very profitable the deliveries as Erik highlighted.

Are all set to go the engines are all here. So we have every confidence that we'll be making our plans.

And when it comes to next year, we'll be happy to talk more about our guidance for 2026, when we meet in February.

Okay. Thank you.

Thank you. Thank you.

So much.

At this time I would like to turn the call back over to the left.

Yes.

Éric Martel: This year, I think they're up by another 5%, 6% compared to last year. We definitely see newcomers, as you mentioned. Bond earlier, and the fleet operator that we've been serving for decades definitely continues to see a stellar intake of order and programs. We're going to be there to serve our customer. The opportunity is quite amazing in the next five years still.

Thank you.

Before I pass the tariff for the conclusion for those who are following the presentation online I think we had a technical issue display.

Display the slides for the second quarter incentives third quarter, so I apologize for that miscue.

<unk> are available on our website and a replay of the presentation will be posted with the correct ones.

So with that I'll pass it to Eric for his closing remarks.

So.

To all of you for joining us today. So your continued interest in Bombardier and in the progress, we're making means a great deal to us.

Miles Walton: Great, thank you so much.

Éric Martel: Thank you, sir.

As you've heard we are delivering on our commitment executing with discipline agility and building a strong resilient company that is focused on performance innovation and also a long term value creation. So thank you all and I look forward to speaking with you again in the new year.

Bart Demosky: Thank you, George.

Operator: Next question will be from Seth Seifman at JPMorgan. Please go ahead.

Tim James: Yeah. Hey, guys. This is Alex on for Seth. Thanks for taking the question. Maybe on.

Miles Walton: Good morning.

Tim James: Good morning. Maybe to ask a question on services. I think you guys have talked about this medium-term growth target of mid-to-high single digits in the past. Clearly, over the past few years, significantly outperformed that. I mean, even this year, you're up 11% year to date. You talk about opening up this new service center in Fort Wayne, Indiana. I'm just trying to think through, is there any kind of potential upside that you guys see to this target now that everything's performed so well?

Yes, Sir ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending and at this time, we do ask that you. Please disconnect your lines Android device.

Yeah.

Éric Martel: This is an amazing story, our service center. In 2020, we were a billion-dollar business. Last year, we've achieved $2.2-ish billion. We more than doubled the business in about four years, and we're not done. That's the great news. As you know, in the first part of the decade, we've increased significantly our international presence. Right now, as we mentioned earlier, we are increasing our presence in the US. We just announced the new service facility in Indiana. We have planned to do probably another two announcements in the next year or so. Paul and his team are working diligently on this to make sure we are at the right place, and we do the right investment. Again, we'll remain disciplined. The beauty of that business is, again, you know that we have more than 5,000 planes in service.

Éric Martel: Most of the time, customers prefer to come to the OEM if they are present. That's why being in the Midwest was strategic for us, important for our customer base, and for us. Now that we're there and giving the capability, we also know how predictable that business is because we know that the airplane we delivered 10 years ago is going to go into a major maintenance, as an example. This is calendar-driven most of the time, so we pretty much know exactly when that airplane will be. We can work on it already and plan for that. That's why we're planning the capacity, because we know for sure that today's capacity will not be enough to meet the demand. Otherwise, we'll lose market share, and that's not the plan.

Éric Martel: Actually, we're banking on a bigger market, but also on gaining market share by being more present at the right place. There are other things we do also. I think the opportunity that you saw arising in the last five years will definitely continue to go at a very fast pace again. We're very active. We're opening centers, building capacity to meet demand, to grow our market share. At the same time, we're training people to do that, so it's a fun challenge. Today, we have in the network hundreds of airplanes every day. Every morning, we take the picture of how many airplanes are we working on. It's pretty significant. It's actually double what it was five years ago. We're excited about this, and our assumption is that the trend will continue.

Bart Demosky: Yeah. Alex, just to add to Eric's comments to help with the numbers a little bit. The mid to high single-digit growth that we've forecasted is primarily driven by baseline growth alone. That's coming from more flight hours, more aircraft in the service centers that we already have in place, aging of the fleet, the fact that we're replacing Learjets with the Globals and Challengers, etc., and with price increases on an annual basis. That's what drives that growth. Incremental to that, to give you kind of the sense of upside, is gaining more market share. We've talked about the potential to get to as high as 70% market share in coming years. This will take some effort, obviously. Eric just talked about we're opening more service center capacity in the United States.

Bart Demosky: That will be part of the answer to how to get there because that'll attract more customers to us as the OEM. In addition, we're going to make some of those small, targeted investments, M&A in particular, tuck-ins to acquire capability and service licensing for major components, like landing gear, like engine repair, perhaps, and a variety of other things. Those are the upside elements, and we're working on those plans to execute on them right now.

Tim James: Awesome. Thanks, guys. I'll keep it at 1:00 today.

Bart Demosky: Thank you so much.

Éric Martel: Thanks, Alex.

Operator: Next question will be from Noah Poponak at Goldman Sachs. Please go ahead.

Miles Walton: Hey, good morning, everyone.

Éric Martel: Good morning.

Miles Walton: I just had a few follow-ups. Just a few follow-ups on the cash flow statement. I guess it would be a little surprising if you were at the low end of 2025, given the book-to-bill. Is always a part of the calculus and is trending well. To be at the high end, you have to do a billion one of free cash in the fourth quarter, which would be up a lot year over year with deliveries up a little, but not a ton. Bart, could you just maybe shed a little bit more light on why you haven't changed that range or what would get you a low end versus high end? As we go to 2026, do you feel like you are tracking to the $900 million or greater framework you've had or not for any reason?

Miles Walton: I just want to make sure, Eric, it sounded like you were pointing to neutral-ish change in working capital. Is that the right number? Because that's obviously been a pretty significant swing the last few years.

Bart Demosky: Yeah. Hi. Good morning, Noah. We've been consistent in our guidance all year on free cash flow, and we're not going to move off of it here in the fourth quarter. What we have highlighted clearly is that it's a very busy and strong market right now for new order activity. That is something that, obviously, depending on how many of those new orders actually get executed in the quarter, can swing the cash flow quite materially. You think about just a couple of sales that could be delivered in the same quarter, and you can be talking $100 million, $200 million of free cash flow very quickly. That's why we don't try to project beyond the next very short period of time, and we stick to our guidance. What we also have said, though, is we are expecting a very strong margin quarter, very profitable.

Bart Demosky: The deliveries, as Eric highlighted, are all set to go. The engines are all here. We have every confidence that we'll be making our plans. When it comes to next year, we'll be happy to talk more about our guidance for 2026 when we meet in February.

Miles Walton: Okay, thank you.

Bart Demosky: Okay, thank you, Noah. Thank you so much.

Operator: This time, I would like to turn the call back over to Francis Richer de la Flèche.

Éric Martel: Thank you, Céline. Before I pass it to Eric for the conclusion, for those who were following the presentation online, I think we had a technical issue displaying the slides for the second quarter instead of the third quarter. I apologize for that miscue. The correct slides are available on our website, and the replay of the presentation will be posted with the correct ones. With that, I'll pass it to Eric for his closing remarks.

Bart Demosky: Thanks to all of you for joining us today. Your continued interest in Bombardier and in the progress we're making means a great deal to us. As you've heard, we are delivering on our commitment, executing with discipline, agility, and building a strong, resilient company that is focused on performance, innovation, and also long-term value creation. Thank you all, and I look forward to speaking with you again in the new year.

Operator: Yes, sir. Ladies and gentlemen, this does indeed conclude the conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your lines. Enjoy the rest of your day.