REV Group's Q3 Net Income Soars 62% on Strong Sales Growth

TL;DR

**REV Group's Q3 earnings are a pleasant surprise, but don't forget the nine-month dip from that business sale — proceed with caution.**

AI Summary

REV Group, Inc. reported a significant increase in net income for the three months ended July 31, 2025, reaching $29.1 million, up from $18.0 million in the prior year, representing a 61.7% increase. Net sales also grew to $644.9 million for the quarter, compared to $579.4 million in the same period last year, an 11.3% rise. However, for the nine months ended July 31, 2025, net income decreased substantially to $66.3 million from $215.9 million in the prior year, primarily due to a $39.6 million loss on the sale of a business in 2025, contrasting with a $260.4 million gain in 2024. Operating income for the quarter more than doubled to $57.0 million from $28.6 million, driven by improved gross profit margins, which rose to 15.8% from 13.5%. The company's cash and cash equivalents increased to $36.0 million as of July 31, 2025, from $24.6 million at October 31, 2024, largely due to $164.2 million in net cash provided by operating activities. Strategic outlook includes continued focus on operational efficiency and managing supply chain disruptions, as indicated by the increase in inventories to $549.3 million from $602.8 million, suggesting better inventory management or sales. The company also repurchased $107.6 million of common stock during the nine months ended July 31, 2025.

Why It Matters

This filing reveals REV Group's strong operational performance in the latest quarter, with a significant jump in net income and sales, which could signal a positive trend for investors. The substantial share repurchases of $107.6 million indicate management's confidence and commitment to returning value to shareholders, potentially boosting stock price. However, the nine-month net income decline due to a business sale loss highlights the impact of strategic divestitures, which could affect long-term growth prospects and competitive positioning in the specialized vehicle market. Employees might see increased job security and potential for growth if the positive operational trends continue, while customers could benefit from a more focused product portfolio.

Risk Assessment

Risk Level: medium — The company faces a medium risk level due to the significant loss on the sale of a business, totaling $39.6 million for the nine months ended July 31, 2025, which heavily impacted overall net income compared to a $260.4 million gain in the prior year. While quarterly performance improved, the forward-looking statements highlight numerous external risks, including economic instability, supply chain disruptions, and commodity price increases, which could materially affect future results.

Analyst Insight

Investors should closely monitor REV Group's upcoming earnings calls for details on the profitability and strategic rationale behind the business divestiture. While the Q3 operational improvements are positive, a deeper dive into segment performance is warranted to assess the sustainability of this growth and its ability to offset the impact of the prior business sale.

Financial Highlights

revenue

$644.9M

operating Margin

8.8%

net Income

$29.1M

gross Margin

15.8%

cash Position

$36.0M

revenue Growth

+11.3%

Revenue Breakdown

Key Numbers

• $644.9M — Net Sales (Q3 2025) (Increased 11.3% from $579.4M in Q3 2024)
• $29.1M — Net Income (Q3 2025) (Increased 61.7% from $18.0M in Q3 2024)
• $66.3M — Net Income (YTD 2025) (Decreased from $215.9M in YTD 2024, largely due to business sale impact)
• $57.0M — Operating Income (Q3 2025) (More than doubled from $28.6M in Q3 2024)
• $39.6M — Loss on Sale of Business (YTD 2025) (Contrasts with a $260.4M gain in YTD 2024, significantly impacting YTD net income)
• $164.2M — Net Cash from Operating Activities (YTD 2025) (Improved from a net cash used of $15.2M in YTD 2024)
• $107.6M — Common Stock Repurchases (YTD 2025) (Demonstrates capital return to shareholders)
• 48,798,333 — Shares Outstanding (July 31, 2025) (Reduced from 52,131,600 shares at October 31, 2024)
• $36.0M — Cash and Cash Equivalents (July 31, 2025) (Increased from $24.6M at October 31, 2024)
• 15.8% — Gross Profit Margin (Q3 2025) (Improved from 13.5% in Q3 2024)

Key Players & Entities

• REV Group, Inc. (company) — Registrant
• American Industrial Partners Capital Fund IV, LP (company) — Former largest equity holder
• U.S. Securities and Exchange Commission (regulator) — Regulatory body for filings
• $29.1 million (dollar_amount) — Net income for three months ended July 31, 2025
• $18.0 million (dollar_amount) — Net income for three months ended July 31, 2024
• $644.9 million (dollar_amount) — Net sales for three months ended July 31, 2025
• $579.4 million (dollar_amount) — Net sales for three months ended July 31, 2024
• $66.3 million (dollar_amount) — Net income for nine months ended July 31, 2025
• $215.9 million (dollar_amount) — Net income for nine months ended July 31, 2024
• $39.6 million (dollar_amount) — Loss on sale of business for nine months ended July 31, 2025

FAQ

Risk Factors

• Supply Chain Disruptions [high — operational]: The company continues to face challenges related to the availability and cost of raw materials and components, impacting production schedules and potentially increasing costs. This was a contributing factor to the inventory levels observed.
• Economic Downturn [medium — market]: A significant economic slowdown or recession could reduce consumer and commercial demand for the company's products, particularly in the recreation segment, leading to lower sales and profitability.
• Interest Rate Fluctuations [medium — financial]: Changes in interest rates can affect the cost of financing for both the company and its customers, potentially impacting sales and the company's borrowing costs.
• Emissions and Safety Regulations [medium — regulatory]: Evolving environmental and safety regulations for vehicles could require significant investment in research and development and product modifications, increasing compliance costs.

Industry Context

REV Group operates in the specialty vehicle and recreation vehicle markets. The industry is characterized by cyclical demand influenced by economic conditions and consumer confidence. Competition is present from both large manufacturers and smaller niche players. Trends include increasing demand for customized vehicles and a focus on efficiency and sustainability.

Regulatory Implications

The company must comply with various federal and state regulations, including emissions standards and safety requirements for its vehicles. Changes in these regulations could necessitate product redesigns and increased manufacturing costs, impacting profitability.

What Investors Should Do

1. Monitor YTD Net Income Drivers
2. Assess Inventory Management
3. Evaluate Share Repurchase Program

Key Dates

• 2025-07-31: End of Third Quarter 2025 — Reported strong Q3 net income growth and increased net sales, alongside improved operating income and gross margins.
• 2025-07-31: End of Nine Months 2025 — Year-to-date net income significantly impacted by a loss on business sale, contrasting with a large gain in the prior year. Strong operating cash flow generation.
• 2024-10-31: End of Fiscal Year 2024 — Provided the comparative balance sheet date for cash and cash equivalents and shares outstanding.

Glossary

Operating Income

Profitability from a company's core business operations before interest and taxes. (More than doubled in Q3 2025, indicating improved operational performance and efficiency.)

Gross Profit Margin

The percentage of revenue that exceeds the cost of goods sold. (Improved to 15.8% in Q3 2025 from 13.5% in Q3 2024, showing better cost management or pricing power.)

Net Cash Provided by Operating Activities

The amount of cash generated from a company's normal business operations. (Significantly positive at $164.2M for YTD 2025, demonstrating strong cash generation capabilities.)

Common Stock Repurchases

When a company buys back its own shares from the open market. (The company repurchased $107.6M in YTD 2025, reducing shares outstanding and returning capital to shareholders.)

Year-Over-Year Comparison

REV Group's Q3 2025 performance shows a significant rebound with net income up 61.7% and net sales up 11.3% compared to Q3 2024, driven by improved gross margins (15.8% vs 13.5%) and operating income more than doubling. However, year-to-date net income is substantially lower due to a large loss on a business sale in 2025, contrasting with a significant gain in the prior year. Cash position has improved, and shares outstanding have decreased due to buybacks.

Key Financial Figures

• $0.001 — nge on which registered Common Stock ($0.001 Par Value) REVG New York Stock Exch

Filing Documents

• revg-20250731.htm (10-Q) — 2369KB
• revg-ex31_1.htm (EX-31.1) — 17KB
• revg-ex31_2.htm (EX-31.2) — 17KB
• revg-ex32_1.htm (EX-32.1) — 12KB
• revg-ex32_2.htm (EX-32.2) — 12KB
• 0001687221-25-000006.txt ( ) — 8446KB
• revg-20250731.xsd (EX-101.SCH) — 963KB
• revg-20250731_htm.xml (XML) — 1523KB

Financial Statements

Financial Statements 4 Condensed Unaudited Consolidated Balance Sheets 4 Condensed Unaudited Consolidated Statements of Income and Comprehensive Income 5 Condensed Unaudited Consolidated Statements of Cash Flows 6 Condensed Unaudited Consolidated Statements of Shareholders' Equity 7 Notes to Condensed Unaudited Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 19 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 28 Item 4.

Controls and Procedures

Controls and Procedures 28 PART II. OTHER INFORMATION 29 Item 1.

Legal Proceedings

Legal Proceedings 29 Item 1A.

Risk Factors

Risk Factors 29 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 29 Item 6. Exhibits 30

Signatures

Signatures 31 Cautionary Statement About Forward-Looking Statements This Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipate," "believe," "estimate," "expect," "guidance," "intend," "may," "outlook," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue," "contemplate," "aim," "strive," "goal," "seek," "forecast" and other similar expressions, although not all forward-looking statements contain these identifying words. Investors are cautioned that forward-looking statements are inherently uncertain. A number of factors could cause actual results to differ materially from these statements, including, but not limited to: economic factors and adverse developments in economic conditions; increased economic and political instability; a disruption, termination or alteration of the supply of vehicle chassis or other critical components from third-party suppliers due to changes in production, U.S. and foreign trade policies, tariffs, or other factors; competition in our markets; increases in the price of commodities, raw materials or other components used in our business due to inflation, tariffs, or other factors; a failure of a key information technology system or a breach of our information security; interruptions to our computer and information technology systems and cyber-attacks; performance of dealers, including the availability and terms of financing to dealers, and disruptions within our dealer network; our ability to attract, retain, and develop qualified personnel, including our ability to attract, retain, and develop proper succession plans for senior management and key employees; increases in the cost of labor, deterioration in employee relations, union organizing activity and work stoppages at our facilities; defects in our

—FINANCI AL INFORMATION

PART I—FINANCI AL INFORMATION

Financi al Statements

Item 1. Financi al Statements. REV Group, Inc. and Subsidiaries Condensed Unaudited Cons olidated Balance Sheets (Dollars in millions, except share amounts) (Audited) July 31, 2025 October 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 36.0 $ 24.6 Accounts receivable, net 196.1 152.3 Inventories, net 549.3 602.8 Other current assets 34.0 26.8 Total current assets 815.4 806.5 Property, plant and equipment, net 139.6 130.2 Goodwill 137.7 137.7 Intangible assets, net 86.0 95.4 Right of use assets 22.6 32.1 Deferred income taxes 8.2 5.4 Other long-term assets 9.5 5.7 Total assets $ 1,219.0 $ 1,213.0 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 216.0 $ 188.8 Short-term customer advances 155.1 158.0 Accrued compensation 33.8 33.7 Short-term accrued warranty 21.8 20.0 Short-term lease obligations 5.6 7.3 Other current liabilities 67.8 61.5 Total current liabilities 500.1 469.3 Long-term debt 90.0 85.0 Long-term customer advances 182.7 160.1 Long-term lease obligations 17.8 25.7 Other long-term liabilities 41.1 37.8 Total liabilities 831.7 777.9 Commitments and contingencies Shareholders' Equity: Preferred stock ($ .001 par value, 95,000,000 shares authorized; none issued or outstanding) — — Common stock ($ .001 par value, 605,000,000 shares authorized; 48,798,333 and 52,131,600 shares issued and outstanding, respectively) 0.1 0.1 Additional paid-in capital 212.5 316.5 Retained earnings 174.6 118.3 Accumulated other comprehensive income 0.1 0.2 Total shareholders' equity 387.3 435.1 Total liabilities and shareholders' equity $ 1,219.0 $ 1,213.0 See Notes to Condensed Unaudited Consolidated Financial Statements. 4 REV Group, Inc. and Subsidiaries Condensed Unaudited Consolidated Statements o f Incom

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