Company Overview - BRP designs, manufactures, and distributes recreational vehicles and powersports equipment, including snowmobiles, watercraft, and ATVs [5] - The company maintains a competitive edge through strong brand recognition, a broad dealer network, and ongoing investment in product development [8] Financial Metrics - As of January 16, 2026, BRP shares were priced at $78.19, which is down 7.8% from the 52-week high [3][4] - The company reported an annualized dividend yield of 0.79% and a forward price-to-earnings ratio of 20.88 as of January 20, 2026 [3][4] Recent Developments - QV Investors Inc. established a new position in BRP by purchasing 447,754 shares for an estimated transaction value of $31.70 million [2][6] - This new position accounts for 2.5% of QV Investors' 13F assets under management, reflecting a bullish outlook towards BRP [3][9] - BRP reported a 14% year-over-year increase in revenue to 2.3 billion Canadian dollars in its fiscal third quarter ended October 31, driven by the successful introduction of new products [9]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] Investment Opportunity - A specific company is highlighted as a potential investment opportunity, possessing critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI data centers [3][7] - This company is not a chipmaker or cloud platform but is positioned to benefit significantly from the anticipated surge in electricity demand driven by AI technologies [3][6] Energy Demand and Infrastructure - AI technologies, particularly large language models like ChatGPT, are extremely energy-intensive, with data centers consuming as much energy as small cities [2] - The company in focus is involved in the U.S. LNG exportation sector, which is expected to grow under the current administration's energy policies [7] Financial Position - The company is noted for being debt-free and holding a substantial cash reserve, amounting to nearly one-third of its market capitalization, which positions it favorably compared to other energy firms burdened with debt [8] - It is trading at less than 7 times earnings, indicating a potentially undervalued investment opportunity in the context of its critical role in the energy sector [10] Market Trends - The article discusses the broader trends of onshoring and tariffs that are influencing the energy and AI sectors, suggesting that this company is well-positioned to capitalize on these developments [5][14] - The influx of talent into the AI sector is expected to drive continuous innovation and advancements, further solidifying the importance of energy infrastructure [12] Conclusion - The company is described as a "toll booth" operator in the AI energy boom, collecting fees from energy exports and benefiting from the growing demand for electricity in the AI landscape [4][5] - The overall message emphasizes the urgency for investors to act now to capitalize on the potential returns associated with AI and energy investments [13][15]

Core Insights - BRP Inc. has received positive analyst attention, with National Bank upgrading its stock rating from "Sector Perform" to "Outperform" at a trading price of $77.22 [1][6] Financial Performance - In Q3 2026, BRP reported earnings of $1.15 per share, exceeding the Zacks Consensus Estimate of $0.88, resulting in a 30.68% earnings surprise and an improvement from $0.85 per share in the same quarter last year [2][6] - The company announced revenues of $1.63 billion for the quarter ending October 2025, surpassing the Zacks Consensus Estimate by 11.73% and showing a significant increase from $1.43 billion reported in the same period last year [3][6] Analyst Recommendations - The stock has a "Moderate Buy" consensus recommendation from eighteen ratings firms, with an average twelve-month price target of $79.60, indicating a positive outlook [4] - Recent brokerage updates have been favorable, with Citigroup upgrading its rating from "neutral" to "buy" and increasing its price target from $68.00 to $73.00, while the Royal Bank of Canada raised its price target from $100.00 to $107.00, maintaining an "outperform" rating [5]

Core Insights - BRP Inc. is a significant player in the recreational vehicle industry, focusing on powersports vehicles such as snowmobiles, watercraft, and off-road vehicles (ORVs) [1] - The company reported strong financial results, with earnings per share (EPS) of $0.94, exceeding estimates, and revenues of approximately $2.25 billion, significantly above forecasts [2][3] Financial Performance - In Q3 of fiscal year 2026, BRP achieved revenues of $2.25 billion, marking a 14% increase from the previous year, driven by higher ORV deliveries and a favorable product mix [3] - Net income for the quarter surged to $68 million, indicating robust financial health [3] - The company raised its full-year guidance for normalized diluted EPS to approximately $5.00, supported by successful new product introductions and a leaner inventory position [4] Market Position - Despite a 4% decrease in North American Powersports retail sales, BRP gained market share in North America for ORVs [4] - The price-to-sales ratio of 0.93 suggests that the stock may be undervalued relative to its annual sales [5][6] - The debt-to-equity ratio stands at 6.25, indicating a reliance on debt financing, while the current ratio of 1.34 reflects reasonable liquidity [5]

Financial Data and Key Metrics Changes - Revenue for the third quarter reached CAD 2.3 billion, a 14% increase compared to the previous year, driven by stronger ORV shipments [5][13] - Normalized EBITDA grew by 21% to CAD 326 million, while normalized EPS rose by 33% to CAD 1.59 [14] - Free cash flow from continued operations was CAD 320 million, with cash on hand at CAD 250 million [14] Business Line Data and Key Metrics Changes - ORV revenue increased by 22% to CAD 1.3 billion, with side-by-side retail up in high single digits, outperforming the industry [9] - Seasonal products revenue decreased by 2% to CAD 606 million due to a planned reduction in snowmobile shipments [10] - Parts, accessories, and apparel revenue rose by 18% to CAD 379 million, reflecting higher sales volume and a favorable mix of OEM engine sales [12] Market Data and Key Metrics Changes - North American retail sales decreased by 4%, with a 1% decline excluding snowmobiles, while Latin America saw a 13% increase in retail sales [6][7] - EMEA markets experienced a 4% decline in retail, and Asia-Pacific saw an 11% decrease [7] - Demand remained stronger for high-end products compared to entry-level models, which is favorable for the company [7] Company Strategy and Development Direction - The company is focused on disciplined execution and operational efficiency, with a strategic plan aiming for CAD 9.5 billion in revenue and CAD 8 in normalized EPS by the end of fiscal 2028 [19][20] - The company plans to enhance capital returns to shareholders by reactivating its share buyback program, allowing for the repurchase of up to 3.1 million shares over the next 12 months [15] - The management is optimistic about capturing demand upside as market conditions improve, supported by a strong product lineup and healthy network inventory levels [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving higher guidance for fiscal 2026, expecting approximately CAD 8.3 billion in revenue and CAD 5 in normalized EPS for the year [18] - The company anticipates a flat industry for ORV retail in the next 12 months, with a focus on maintaining strong dealer engagement and inventory management [42][54] - Management noted that the promotional environment remains elevated, particularly for entry-level models, but high-end products are performing well [41][66] Other Important Information - The company is in the process of finalizing the sale of Telwater in Australia, with expected cash inflow around CAD 200 million pending regulatory approvals [12][108] - The transition of production for the Ryker model to Vietnam is expected to impact deliveries next year, presenting a headwind [68] Q&A Session Summary Question: Can you provide insights on the current versus non-current inventory situation? - Management noted strong engagement from dealers and positive retail performance for new models, with gains in current inventory and planned losses in non-current inventory [23][25] Question: What is the dealer appetite for inventory given macro conditions? - Management indicated that dealers are more willing to take on new models due to reduced inventory levels and positive product reception [30][32] Question: How do you see the promotional environment affecting your business? - Management acknowledged that while the industry remains promotional, their sales programs are trending lower compared to the previous year, allowing for better positioning [66] Question: What are the expectations for snowmobile inventory levels? - Management expects to realign inventory levels by the end of the snowmobile season, with a focus on reducing non-current inventory [61][62] Question: What is the expected cash inflow from the sale of Telwater? - The expected cash inflow from the sale of Telwater is around CAD 200 million, pending regulatory approval [108]

Financial Data and Key Metrics Changes - Revenue for Q3 2026 was CAD 2.3 billion, a 14% increase compared to the previous year, driven by stronger ORV shipments, partially offset by lower snowmobile deliveries [11][3] - Normalized EBITDA grew 21% to CAD 326 million, and normalized EPS rose 33% to CAD 1.59 [11][3] - Free cash flow from continued operations was CAD 320 million, with cash on hand at CAD 250 million [11][12] Business Line Data and Key Metrics Changes - ORV revenue increased by 22% to CAD 1.3 billion, with side-by-side retail up in high single digits, outperforming the industry [6][3] - Seasonal products revenue decreased by 2% to CAD 606 million due to planned reductions in snowmobile shipments [8][3] - Parts, accessories, and apparel revenue rose 18% to CAD 379 million, reflecting higher sales volumes as dealers replenished inventory [10][3] Market Data and Key Metrics Changes - North American retail sales decreased by 4%, with a 1% decline excluding snowmobiles, while Latin America saw a 13% increase in retail sales [4][3] - EMEA markets experienced a 4% decline in retail, and Asia-Pacific saw an 11% decrease [4][3] - Demand remained stronger for high-end products compared to entry-level models, which is favorable for the company’s new high-end model introductions [4][3] Company Strategy and Development Direction - The company is focused on disciplined execution and operational efficiency, with a strategic plan aiming for CAD 9.5 billion in revenue and CAD 8 in normalized EPS by the end of fiscal 2028 [16][17] - The company plans to enhance capital returns to shareholders by reactivating its share buyback program, allowing for the repurchase of up to 3.1 million shares over the next 12 months [12][3] - The company is well-positioned to capture demand upside as market conditions improve, supported by a strong product lineup and healthy network inventory levels [14][3] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving higher guidance for fiscal 2026, expecting approximately CAD 8.3 billion in revenue and CAD 5 in normalized EPS for the year [15][3] - The company anticipates a flat industry for ORV retail in the next 12 months, with expectations for improved dealer sentiment and strong product introductions [37][3] - Management noted that the promotional environment remains elevated, particularly for entry-level models, but high-end products are performing well [36][3] Other Important Information - The company has successfully reduced network inventory by 17% year-over-year, positioning dealers to take on new products as production ramps up [13][3] - The company is in the process of selling its marine business, with expected cash inflow of around CAD 200 million from the sale of Telwater, pending regulatory approval [81][3] - The company is actively monitoring macroeconomic conditions and tariff negotiations, focusing on supporting the industry and adapting to changes [41][3] Q&A Session Summary Question: Insights on ORV market share and inventory dynamics - Management noted strong engagement from dealers and positive retail trends for new models, with gains in current inventory but losses in non-current inventory as planned [20][21] Question: Dealer appetite for inventory investment - Management indicated that dealers are more willing to take on new models due to reduced inventory and strong product offerings, with good engagement observed [28][29] Question: Impact of promotional environment on sales - Management acknowledged that while the industry remains promotional, their sales programs are trending lower than the previous year, contributing to better performance [53][11] Question: Expectations for snowmobile market and inventory levels - Management expects to clear older models by the end of the snowmobile season, with a good start to the season and plans to realign inventory levels [49][50] Question: Future CapEx and investment plans - Management confirmed a focus on responsible CapEx spending, with expectations of around CAD 420 million for the next year, primarily for product and technology investments [83][3]

Financial Performance - Revenues increased by 14% to CA$2,250 million in FY26 Q3 compared to CA$1,974 million in FY25 Q3[13] - Normalized diluted earnings per share increased by 33% to CA$1.59 in FY26 Q3 from CA$1.20 in FY25 Q3[13] - Free cash flow generation increased by 268% to CA$320 million[16] - The company raised full-year Normalized Diluted EPS guidance from "$4.25 to $4.75" to approximately "$5.00"[15] Retail Sales and Market Trends - North American Powersports retail sales declined by 4%[16] - North American network inventory decreased by 17%[16] - Year-Round Products revenues increased by 22%[33] - Seasonal Products revenues decreased by 2%[42] Market Share and Product Performance - Can-Am SSV gained over 4 percentage points of market share in the Utility segment[37] - Can-Am ATV gained over 11 percentage points of market share in current units[37] - Sea-Doo PWC ended the North American 2025 season as the 1 market leader[46]

Core Insights - BRP Inc. reported quarterly earnings of $1.15 per share, exceeding the Zacks Consensus Estimate of $0.88 per share, and showing an increase from $0.85 per share a year ago, resulting in an earnings surprise of +30.68% [1] - The company achieved revenues of $1.63 billion for the quarter ended October 2025, surpassing the Zacks Consensus Estimate by 11.73% and up from $1.43 billion year-over-year [2] - BRP shares have increased by approximately 39.1% since the beginning of the year, outperforming the S&P 500's gain of 16.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.39 on revenues of $1.76 billion, and for the current fiscal year, it is $3.28 on revenues of $5.92 billion [7] - The estimate revisions trend for BRP was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Automotive - Original Equipment industry, to which BRP belongs, is currently ranked in the top 34% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - For the nine-month period ended October 31, 2025, the Company completed the sales of Alumacraft and Manitou, presenting these businesses as discontinued operations[7]. - The Company reported total revenues of $2,250.3 million for the three-month period ended October 31, 2025, representing a 14.0% increase compared to $1,973.5 million in the same period last year[43]. - Total revenues for the nine-month period ended October 31, 2025, were $5,985.4 million, a 3.5% increase from $5,784.6 million in 2024[73]. - The Company’s net income for the three-month period was $76.5 million, a 150.0% increase from $30.6 million in the same period last year[41]. - Net income for the nine-month period ended October 31, 2025, increased by 156.0% to $294.6 million compared to $115.1 million in the same period in 2024[73]. - The Company reported a normalized EBITDA decrease of 8.8% to $739.6 million for the nine-month period ended October 31, 2025[82]. - Normalized EBITDA for the three-month period was CAD 325.6 million, an increase from CAD 268.4 million year-over-year[178]. - The Company’s net cash flows generated from operating activities for the nine-month period ended October 31, 2025, were $784.3 million, compared to $402.5 million in the same period of 2024, showing an increase of 95%[160]. Revenue Breakdown - Year-Round Products accounted for 58.2% of total revenues for the nine-month period ended October 31, 2025, up from 55.0% in the same period of 2024[23]. - Seasonal Products represented 25.0% of total revenues for the nine-month period ended October 31, 2025, a decrease from 29.3% in the prior year[23]. - Year-Round Products revenues increased by 22.1% to $1,265.6 million, driven by higher unit sales and a favorable product mix following new product launches[52]. - Seasonal Products revenues decreased by 1.6% to $606.2 million, mainly due to lower Snowmobile unit sales, partially offset by higher sales in PWC and Sea-Doo pontoons[55]. Operational Highlights - The Company employed approximately 16,500 employees worldwide as of the end of Fiscal 2025, selling products in over 130 countries through a network of about 2,400 dealers[21]. - The Company is managing dealer and distributor inventory financing arrangements to maintain dealer value proposition[12]. - The Company expects to maintain a regular flow of new product introductions and development of market-shaping products[12]. - North American retail sales decreased by 4% for the three-month period ended October 31, 2025, primarily due to lower Seasonal Products sales[42]. - North American network inventories decreased by 17% compared to October 31, 2024, reflecting the Company's focus on reducing inventory levels[49]. Financial Position and Cash Flow - The Company’s cash and cash equivalents at the end of the period were $250.1 million, an increase from $145.7 million at the end of the same period in 2024[104]. - Net cash flows used in investing activities decreased to $196.9 million for the nine-month period ended October 31, 2025, from $299.4 million in 2024, primarily due to lower investments in property, plant, and equipment[108]. - The company reported net cash flows used in financing activities of $533.9 million for the nine-month period ended October 31, 2025, compared to $443.1 million in 2024, largely due to a significant repayment of long-term debt[109]. - The carrying amount of assets classified as held for sale was $128.0 million as of October 31, 2025, down from $292.7 million in January 2025[100]. - The total comprehensive loss from discontinued operations for the nine-month period ended October 31, 2025, was $44.3 million, compared to $106.1 million in 2024[99]. Tax and Regulatory Matters - The Company expects to pay cash taxes in all tax jurisdictions for Fiscal 2026, except in the United States[38]. - The effective income tax rate decreased to 28.5% for Q3 2025 from 52.0% in Q3 2024, primarily due to foreign currency translation effects[63]. Research and Development - The Company is committed to developing electric models for its existing product lines, focusing on innovation and market opportunities[20]. - Research and development expenses increased by 15.0% to $110.1 million in Q3 2025, up from $95.7 million in Q3 2024[59]. Risk Management - The Company is exposed to commodity price fluctuations, with approximately 75% of its cost of sales consisting of materials used in manufacturing[29]. - The Company’s liquidity risk is managed through continuous monitoring of operating cash requirements, ensuring financial flexibility[148]. - The Company has entered into interest rate cap contracts to limit exposure to interest rate increases related to its Term Facility[151]. Internal Controls and Governance - The Company has established effective internal controls over financial reporting as of October 31, 2025[198]. - There have been no material changes in internal control over financial reporting during the nine-month period ended October 31, 2025[198]. - The Company is not aware of any significant changes to its risk factors since the last disclosure[201].

Core Viewpoint - BRP Inc. has received approval from the Toronto Stock Exchange for the renewal of its normal course issuer bid (NCIB) to repurchase up to 3,131,256 subordinate voting shares over a twelve-month period, which represents approximately 10% of its public float as of December 2, 2025 [1][6]. Group 1: NCIB Details - The NCIB will be executed through the TSX or other eligible Canadian trading systems, adhering to their regulations, and will involve open market transactions and other permitted means [2]. - BRP is allowed to purchase a maximum of 44,267 subordinate voting shares daily, which is 25% of the average daily trading volume of 177,071 shares over the last six months [3]. - The purchase price for shares will be the market price at the time of acquisition, plus brokerage fees, with potential discounts for certain types of purchases [4]. Group 2: Automatic Share Purchase Plan - BRP has established an automatic share purchase plan (APP) with a designated broker to facilitate share purchases during regulatory restrictions or blackout periods, effective January 24, 2026 [5]. - The APP allows BRP to instruct the broker to make purchases based on pre-established parameters before entering a blackout period, ensuring compliance with TSX rules and applicable securities laws [5]. Group 3: Previous NCIB Performance - Under the previous NCIB that expires on December 9, 2025, BRP did not purchase any subordinate voting shares as of December 2, 2025, despite being allowed to buy a total of 3,331,852 shares [6]. Group 4: Strategic Rationale - The Board of Directors believes that repurchasing subordinate voting shares could be a beneficial use of available cash to enhance shareholder value [7]. Group 5: Company Overview - BRP Inc. is a global leader in powersports products, with annual sales of CA$7.8 billion and a workforce of approximately 16,500 as of January 31, 2025 [8].