BRP二季度收入超预期并上调全年正常化EPS指引，但利润率受关税和供应商重组冲击

----- d117601d6k.htm -----
6-K
1
d117601d6k.htm
6-K
6-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE
13A-16
OR
15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of September, 2026
Commission File Number:
001-38648
BRP INC.
(Translation of
registrant’s name into English)
726 Saint-Joseph Street
Valcourt, Quebec, Canada
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form
20-F
or Form
40-F.
Form
20-F
☐ Form
40-F
☒
EXHIBIT INDEX
Exhibits 99.1 and 99.2 to
this report of a Foreign Private Issuer on Form
6-K
are deemed filed for all purposes under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.
Exhibit
No.
Description
99.1
Unaudited Condensed
Consolidated Interim Financial Statements for the Three- and
Six-Months
Ended July 31, 2026
99.2
Management’s Discussion and Analysis of Financial Condition and Results
of Operations for the Three- and
Six-Months
Ended July 31, 2026
99.3
Regulation
52-109F2
Certification
of Chief Executive Officer
99.4
Regulation
52-109F2
Certification
of Chief Financial Officer
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BRP Inc.
By:
/s/ Sébastien Martel
Name:
Sébastien Martel
Title:
Chief Financial Officer
Date: September 3, 2026

----- d117601dex991.htm -----
EX-99.1
2
d117601dex991.htm
EX-99.1
EX-99.1
Exhibit 99.1
Unaudited Condensed Consolidated Interim
Financial Statements
BRP Inc.
For the
three- and
six-month
periods ended July 31, 2026 and 2025
BRP Inc.
CONDENSED
CONSOLIDATED INTERIM STATEMENTS OF NET (LOSS) INCOME
[Unaudited]
[in millions of Canadian dollars, except per share data]
Three-month periods ended
Six-month periods ended
Notes
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Revenues
9
$2,236.8
$1,888.2
$4,628.6
$3,735.1
Cost of sales
1,974.3
1,490.5
3,804.5
2,942.6
Gross profit
262.5
397.7
824.1
792.5
Operating expenses
Selling and marketing
116.7
112.4
247.1
219.8
Research and development
108.7
96.4
227.5
201.4
General and administrative
89.3
96.5
177.4
174.3
Other operating (income) expenses
10
(2.2)
2.0
(3.4)
12.7
Total operating expenses
312.5
307.3
648.6
608.2
Operating income (loss)
(50.0)
90.4
175.5
184.3
Financing costs
11
50.6
50.5
95.6
97.1
Financing income
11
(5.4)
(3.3)
(8.5)
(4.6)
Foreign exchange loss (gain) on long-term debt
72.6
6.9
81.4
(119.5)
Income (loss) before income taxes
(167.8)
36.3
7.0
211.3
Income tax expense (recovery)
12
(31.0)
(20.8)
16.5
(6.8)
Net (loss) income from continuing operations
(136.8)
57.1
(9.5)
218.1
Net income (loss) from discontinued operations
14
2.7
(33.6)
4.3
(44.5)
Net (loss) income
$(134.1)
$23.5
$(5.2)
$173.6
Attributable to shareholders
$(133.9)
$24.3
$(4.4)
$174.5
Attributable to
non-controlling
interest
$(0.2)
$(0.8)
$(0.8)
$(0.9)
Basic (loss) earnings per share - continuing operations
8
$(1.88)
$0.79
$(0.12)
$3.00
Diluted (loss) earnings per share - continuing operations
8
$(1.88)
$0.79
$(0.12)
$2.98
Basic earnings (loss) per share - discontinued operations
8
$0.04
$(0.46)
$0.06
$(0.61)
Diluted earnings (loss) per share - discontinued operations
8
$0.04
$(0.46)
$0.06
$(0.60)
Basic (loss) earnings per share
8
$(1.84)
$0.33
$(0.06)
$2.39
Diluted (loss) earnings per share
8
$(1.84)
$0.33
$(0.06)
$2.38
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
2
BRP Inc.
CONDENSED
CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
[Unaudited]
[in millions of Canadian dollars]
Three-month periods ended
Six-month periods ended
Notes
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Net (loss) income
$(134.1)
$23.5
$(5.2)
$173.6
Other comprehensive income
Items that will be reclassified subsequently to net income
Net changes in fair value of derivatives designated as cash flow hedges
(20.5)
3.5
(27.5)
33.2
Net changes in unrealized (loss) gain on translation of foreign operations
(10.3)
7.3
(13.6)
65.2
Income tax recovery (expense)
5.5
(2.5)
7.3
(8.7)
(25.3)
8.3
(33.8)
89.7
Items that will not be reclassified subsequently to net income
Actuarial gains on defined benefit pension plans
8.7
6.6
17.0
10.2
Gain on fair value of restricted investments
0.1
0.3
—
—
Income tax expense
(2.2)
(1.8)
(4.3)
(2.5)
6.6
5.1
12.7
7.7
Total other comprehensive (loss) income
(18.7)
13.4
(21.1)
97.4
Total comprehensive (loss) income
$(152.8)
$36.9
$(26.3)
$271.0
Attributable to shareholders
$(152.8)
$37.7
$(25.7)
$271.9
Attributable to
non-controlling
interest
—
(0.8)
(0.6)
(0.9)
Total comprehensive (loss) income attributable to shareholders
Continuing operations
$(155.7)
$72.0
$(30.9)
$309.1
Discontinued operations
14
2.9
(34.3)
5.2
(37.2)
$(152.8)
$37.7
$(25.7)
$271.9
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
3
BRP Inc.
CONDENSED
CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
[Unaudited]
[in millions of Canadian dollars]
As at
Notes
July 31,
2026
January 31,
2026
Cash and cash equivalents
$647.8
$427.1
Trade and other receivables
393.7
607.2
Income taxes and investment tax credits receivable
161.7
157.6
Other financial assets
48.0
60.7
Inventories
3
1,923.7
1,824.6
Other current assets
92.3
66.2
Assets classified as held for sale
14
130.9
126.1
Total current assets
3,398.1
3,269.5
Investment tax credits receivable
14.0
26.8
Other financial assets
32.1
62.9
Property, plant and equipment
1,757.2
1,816.8
Intangible assets
497.7
494.9
Right-of-use
assets
467.5
212.2
Deferred income taxes
466.8
436.2
Other
non-current
assets
2.8
3.5
Total
non-current
assets
3,238.1
3,053.3
Total assets
$6,636.2
$6,322.8
Trade payables and accruals
$1,505.7
$1,515.2
Provisions
4
920.2
737.4
Other financial liabilities
176.0
73.4
Income tax payable
18.4
24.1
Deferred revenues
64.3
62.0
Current portion of long-term debt
5
49.7
49.2
Current portion of lease liabilities
5
57.2
55.1
Other current liabilities
33.9
26.7
Liabilities associated to assets classified as held for
sale
14
30.4
26.8
Total current liabilities
2,855.8
2,569.9
Long-term debt
5
2,449.8
2,393.1
Lease liabilities
5
442.8
182.3
Provisions
4
134.9
120.7
Other financial liabilities
77.1
71.9
Deferred revenues
77.7
82.3
Employee future benefit liabilities
191.4
210.9
Deferred income taxes
34.9
34.4
Other
non-current
liabilities
36.6
46.6
Total
non-current
liabilities
3,445.2
3,142.2
Total liabilities
$6,301.0
$5,712.1
Equity
$335.2
$610.7
Total liabilities and equity
$6,636.2
$6,322.8
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
4
BRP Inc.
CONDENSED
CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
[Unaudited]
[in millions of Canadian dollars]
For the
six-month
period ended July 31, 2026
Attributed to shareholders
Capital
Stock
(Note 6)
Contributed
surplus
Retained
earnings
(losses)
Translation
of foreign
operations
Cash-
flow
hedges
Total
Non-
controlling
interests
Total
equity
Balance as at January 31, 2026
$279.5
$86.5
$153.8
$83.5
$0.8
$604.1
$6.6
$610.7
Net loss
—
—
(4.4
)
—
—
(4.4
)
(0.8
)
(5.2
)
Other comprehensive income (loss)
—
—
12.7
(13.8
)
(20.2
)
(21.3
)
0.2
(21.1
)
Total comprehensive income (loss)
—
—
8.3
(13.8
)
(20.2
)
(25.7
)
(0.6
)
(26.3
)
Dividends
—
—
(36.4
)
—
—
(36.4
)
—
(36.4
)
Issuance of subordinate shares (Note 6)
34.3
(8.3
)
—
—
—
26.0
—
26.0
Repurchase of subordinate shares (Note 6)
(17.7
)
(42.3
)
(184.0
)
—
—
(244.0
)
—
(244.0
)
Stock-based compensation
—
4.7
—
—
—
4.7
—
4.7
Other
—
—
—
—
—
—
0.5
0.5
Balance as at July 31, 2026
$296.1
$40.6
$(58.3
)
$69.7
$(19.4
)
$328.7
$6.5
$335.2
For the
six-month
period ended July 31, 2025
Attributed to shareholders
Capital
Stock
(Note 6)
Contributed
surplus
Retained
earnings
(losses)
Translation
of foreign
operations
Cash-
flow
hedges
Total
Non-
controlling
interests
Total
equity
Balance as at January 31, 2025
$251.0
$83.0
$(37.3
)
$(21.5
)
$(33.9
)
$241.3
$5.5
$246.8
Net income (loss)
—
—
174.5
—
—
174.5
(0.9
)
173.6
Other comprehensive income
—
—
7.7
65.2
24.5
97.4
—
97.4
Total comprehensive income (loss)
—
—
182.2
65.2
24.5
271.9
(0.9
)
271.0
Dividends
—
—
(31.3
)
—
—
(31.3
)
—
(31.3
)
Issuance of subordinate shares (Note 6)
0.8
(0.2
)
—
—
—
0.6
—
0.6
Stock-based compensation
—
12.4
—
—
—
12.4
—
12.4
Special long-term incentive program (Note 7)
—
(9.3
)
—
—
—
(9.3
)
—
(9.3
)
Other
—
—
—
—
—
—
3.4
3.4
Balance as at July 31, 2025
$251.8
$85.9
$113.6
$43.7
$(9.4
)
$485.6
$8.0
$493.6
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
5
BRP Inc.
CONDENSED
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
[Unaudited]
[in millions of Canadian dollars]
Six-month periods ended
Notes
July 31,
2026
July 31,
2025
OPERATING ACTIVITIES
Net income (loss)
$(5.2)
$173.6
Non-cash
and
non-operating
items:
Depreciation expense
221.7
219.5
Income tax expense (recovery)
18.7
(20.6)
Foreign exchange loss (gain) on long-term debt
81.4
(119.5)
Interest expense
83.9
87.9
Unrealized foreign exchange (gain) loss on other working capital items
(41.2)
35.0
Other
16.8
6.2
Cash flows generated from operations before changes in working capital
376.1
382.1
Changes in working capital:
Decrease in trade and other receivables
222.1
110.7
(Increase) decrease in inventories
(72.0)
42.0
(Increase) decrease in other assets
(23.4)
2.2
Decrease in trade payables and accruals
(14.3)
(24.1)
Increase in other financial liabilities
41.8
12.8
Increase (decrease) in provisions
177.7
(97.6)
Decrease in other liabilities
(11.1)
(9.5)
Cash flows generated from operations
696.9
418.6
Income taxes paid, net of refunds
(10.1)
(45.5)
Net cash flows generated from operating activities
686.8
373.1
INVESTING ACTIVITIES
Additions to property, plant and equipment
(105.5)
(115.5)
Additions to intangible assets
(21.9)
(18.4)
Proceeds of disposal from Marine businesses
14
—
18.2
Other
1.2
(3.4)
Net cash flows used in investing activities
(126.2)
(119.1)
FINANCING ACTIVITIES
Repayment of long-term debt
5
(25.4)
(31.4)
Repayment of lease liabilities
(27.8)
(29.1)
Interest paid
(82.6)
(86.0)
Issuance of subordinate voting shares
6
26.0
0.6
Repurchase of subordinate voting shares
6
(195.3)
—
Dividends paid
(36.4)
(31.3)
Other
0.5
3.2
Net cash flows used in financing activities
(341.0)
(174.0)
Effect of exchange rate changes on cash and cash
equivalents
1.1
11.6
Net increase in cash and cash equivalents
220.7
91.6
Cash and cash equivalents at the beginning of period
427.8
180.0
Cash and cash equivalents at the end of period
$648.5
$271.6
The Company has elected to present a consolidated statement of cash flows that includes both continuing and discontinued operations.
Amounts related to discontinued operations by operating, investing and financing activities are disclosed in Note 14.
The accompanying notes are an integral
part of these unaudited condensed consolidated interim financial statements.
6
BRP Inc.
NOTES TO
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three- and
six-month
periods ended July 31, 2026 and 2025
[Unaudited]
[Tabular figures are in millions of Canadian dollars, unless otherwise
indicated]
1.
NATURE OF OPERATIONS
BRP Inc. (“BRP”) is incorporated under the laws of Canada. BRP’s multiple voting shares are owned by Beaudier Inc. and
4338618 Canada Inc. (collectively, “Beaudier Group”), Bain Capital Integral Investors II, L.P. (“Bain Capital”) and La Caisse de dépôt et placement du Québec (“La Caisse”), (collectively,
the “Principal Shareholders”). BRP’s subordinate voting shares are listed in Canada on the Toronto Stock Exchange and in the United States on the Nasdaq Global Select Market under the symbol DOO.
BRP and its subsidiaries (the “Company”) design, develop, manufacture and sell powersports vehicles. The Company’s
diversified portfolio of products includes: “Year-Round Products”, which consists of
all-terrain
vehicles,
side-by-side
vehicles, three-wheel vehicles and electric motorcycles; “Seasonal Products”, which consists of snowmobiles, personal watercraft and pontoons;
and “PA&A, OEM Engines and Others”, which consists of parts, accessories and apparel (“PA&A”), engines for karts, recreational aircrafts and jet boats, as well as other products and services.
The Company’s products are sold mainly through a network of independent dealers, independent distributors and to original
equipment manufacturers (the “Customers”). The Company distributes its products worldwide and manufactures them in Mexico, Canada, Austria, the United States, Finland, Australia and Germany.
The Company’s headquarters is located at 726 Saint-Joseph Street, Valcourt, Québec, J0E 2L0.
2.
BASIS OF PRESENTATION
These unaudited condensed consolidated interim financial statements for the three- and
six-month
periods ended July 31, 2026 and 2025 have been prepared using accounting policies consistent with IFRS
®
Accounting Standards as issued by the International Accounting Standards Board and
in accordance with
IAS 34
“
Interim Financial Reporting
”
. These unaudited condensed consolidated interim financial statements for the three- and
six-month
periods ended
July 31, 2026 and 2025 follow the same accounting policies as the audited consolidated financial statements for the year ended January 31, 2026 and, as such, should be read in conjunction with them.
7
BRP Inc.
NOTES TO
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three- and
six-month
periods ended July 31, 2026 and 2025
[Unaudited]
[Tabular figures are in millions of Canadian dollars, unless otherwise
indicated]
2.
BASIS OF PREPARATION [CONTINUED]
The preparation of these unaudited condensed consolidated interim financial statements in accordance with the Company’s accounting
policies requires management to make estimates and judgments that can affect the reported amounts of assets and liabilities, related amounts of revenues and expenses, other comprehensive income and disclosures made. The Company’s best
estimates are based on the information, facts and circumstances available at the time estimates are made. Management uses historical experience and information, general economic conditions and trends, as well as assumptions regarding probable future
outcomes as the basis for determining estimates. Actual results could differ from the estimates used and such differences could be significant.
These unaudited condensed consolidated interim financial statements include the financial statements of BRP and its subsidiaries. BRP
controls all of its subsidiaries that are wholly owned through voting equity interests, except for BRP Commerce & Trade (Shanghai) Company Limited in China, and LVHA Manufacturing Company Limited in Vietnam for which a
non-controlling
interest of 20% and 35% respectively are recorded upon consolidation, and Pinion GmbH in Germany for which there is a
non-controlling
interest of 20%. BRP is
also part of a joint venture located in Austria. All inter-company transactions and balances have been eliminated upon consolidation.
The Company’s revenues and operating income experience substantial fluctuations from quarter to quarter. In general, wholesale
sales of the Company’s products are higher in the period immediately preceding and during their respective season of use. However, the mix of product sales may vary considerably from time to time as a result of changes in seasonal and
geographic demand, the introduction of new products and models, and production scheduling for particular types of products.
On
September 2, 2026, the Board of Directors of the Company approved these unaudited condensed consolidated interim financial statements for the three- and
six-month
periods ended July 31, 2026 and
2025.
3.
INVENTORIES
The Company’s inventories were as follows, as at:
July 31,
2026
January 31,
2026
Materials and work in progress
$796.6
$707.0
Finished products
693.4
707.7
Parts, accessories and apparel
433.7
409.9
Total inventories
$1,923.7
$1,824.6
The Company recognized in the condensed consolidated interim statements of net (loss) income during the
three- and
six-month
periods ended July 31, 2026, a net write-down on inventories of $4.0 million and $19.3 million respectively ($0.3 million and $6.6 million respectively during the
three- and
six-month
periods ended July 31, 2025).
8
BRP Inc.
NOTES TO
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three- and
six-month
periods ended July 31, 2026 and 2025
[Unaudited]
[Tabular figures are in millions of Canadian dollars, unless otherwise
indicated]
4.
PROVISIONS
The Company’s provisions were as follows, as at:
July 31,
2026
January 31,
2026
Product-related
$860.9
$810.2
Other
194.2
47.9
Total provisions
$1,055.1
$858.1
Current
920.2
737.4
Non-current
134.9
120.7
Total provisions
$1,055.1
$858.1
Product-related provisions include provisions for regular warranty coverage on products sold, product
liability provisions and provisions related to sales programs offered by the Company to its customers in order to support the retail activity.
The
non-current
portion of provisions is mainly attributable to product-related provisions.
The changes in provisions were as follows:
Product-related
Other
Total
Balance as at January 31, 2026
$810.2
$47.9
$858.1
Expensed during the period
617.9
175.2
793.1
Paid during the period
(587.3
)
(28.4
)
(615.7
)
Reversed during the period
(1.1
)
(0.1
)
(1.2
)
Effect of foreign currency exchange rate changes
21.3
(0.4
)
20.9
Unwinding of discount and effect of changes in discounting
estimates
(0.1
)
—
(0.1
)
Balance as at July 31, 2026
$860.9
$194.2
$1,055.1
9
BRP Inc.
NOTES TO
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three- and
six-month
periods ended July 31, 2026 and 2025
[Unaudited]
[Tabular figures are in millions of Canadian dollars, unless otherwise
indicated]
5.
DEBT
Revolving Credit Facility
The Company has a
Revolving Credit Facility totaling $1,500.0 million, which can also be drawn in U.S dollar or Euro equivalent. As at July 31, 2026, the Company had no outstanding amount drawn on the Revolving Credit Facility (nil as at January 31,
2026). Commitment fees on the undrawn amount of the Revolving Credit Facility, varying from 0.25% to 0.40%, were 0.25%.
The
applicable interest rates are subject to a customary credit spread adjustment ranging from 0.45% to 3.00%, which varies depending on a Leverage Ratio. Based on the Leverage Ratio, the cost of borrowing as at July 31, 2026, in Canadian dollars,
was either the CORRA plus 1.70% or the Canadian Prime Rate plus 0.70%. In U.S. dollars, it was either the SOFR plus 1.70%, the U.S. Base Rate plus 0.70% or the U.S. Prime Rate plus 0.70%. In Euros, it was the EURIBOR plus 1.70%.
The Company is required to maintain, under certain conditions, a minimum fixed charge coverage ratio. Additionally, the total available
borrowing under the Revolving Credit Facility is subject to a borrowing base calculation representing 75% of the carrying amount of trade and other receivables plus 50% of the carrying amount of inventories. The total amount available was
$1,265.0 million as at July 31, 2026.
Long-Term Debt
As at July 31, 2026 and January 31, 2026, the maturity dates, interest rates, outstanding nominal amounts and carrying amounts
of long-term debt were as follows:
July 31, 2026
Maturity date
Contractual
interest rate
Effective
interest rate
Outstanding
nominal amount
Carrying
amount
Term Facility
Term Loan
B-2
December 2029
5.98%
5.98%
U.S. $568.6
$797.8
Term Loan
B-3
January 2031
5.98%
5.98%
U.S. $1,147.9
1,610.6
Term Loans
Mar. 2027 to Dec. 2030
0.93% to 3.50%
2.72% to 6.50%
€
58.8
91.1
Total long-term debt
$2,499.5
Current
49.7
Non-current
2,449.8
Total long-term debt
$2,499.5
10
BRP Inc.
NOTES TO
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three- and
six-month
periods ended July 31, 2026 and 2025
[Unaudited]
[Tabular figures are in millions of Canadian dollars, unless otherwise
indicated]
5.
DEBT [CONTINUED]
January 31, 2026
Maturity date
Contractual
interest rate
Effective
interest rate
Outstanding
nominal amount
Carrying
amount
Term Facility
Term Loan
B-2
December 2029
5.92%
5.92%
U.S. $571.5
$774.8
Term Loan
B-3
January 2031
5.92%
5.92%
U.S. $1,153.7
1,564.2
Term Loans
Mar. 2026 to Dec. 2030
0.93% to 3.23%
2.48% to 6.50%
€
67.1
103.3
Total long-term debt
$2,442.3
Current
49.2
Non-current
2,393.1
Total long-term debt
$2,442.3
The following table explains the changes in long-term debt during the
six-month
period ended July 31, 2026:
Statements of cash flows
Non-cash changes
Carrying
amount as at
January 31,
2026
Issuance
Repayment
Effect of
foreign
currency
exchange rate
changes
Other
Carrying
amount as at
July 31, 2026
Term Facility
$2,339.0
$—
$(12.0)
$81.4
$—
$2,408.4
Term Loans
103.3
—
(13.4)
0.3
0.9
91.1
Total
$2,442.3
$—
$(25.4)
$81.7
$0.9
$2,499.5
11
BRP Inc.
NOTES TO
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three- and
six-month
periods ended July 31, 2026 and 2025
[Unaudited]
[Tabular figures are in millions of Canadian dollars, unless otherwise
indicated]
5.
DEBT [CONTINUED]
a)
Term Facility
As at July 31, 2026, the cost of borrowing under the Term Loan
B-2
was as follows:
(i) Term SOFR, plus 2.25% per annum, with a Term SOFR floor of 0.50%
As at July 31, 2026, the cost of borrowing under the Term Loan
B-3
was as follows:
(i) Term SOFR, plus 2.25% per annum, with a Term SOFR floor of 0.00%
Under the Term Facility, the cost of borrowing in U.S. Base Rate or U.S. Prime Rate cannot be lower than the cost of borrowing under
SOFR.
The Company is required to repay a minimum of 0.25% of the nominal amount each quarter, less any voluntary prepayments done
to date. Consequently, the Company repaid an amount of U.S. $8.7 million ($12.0 million) during the
six-month
period ended July 31, 2026 (U.S. $7.5 million ($10.4 million) during the
six-month
period ended July 31, 2025). Also, the Company may be required to repay a portion of the Term Facility in the event that it has an excess cash position at the end of the fiscal year and its Leverage
Ratio is above a certain threshold level. As at July 31, 2026 and 2025, the Company was not required to repay any portion of the Term Facility under this requirement.
b)
Lease Liability
During the
six-month
period ended July 31, 2026, the Company entered a lease agreement for a
distribution center related to PA&A operations in Saint-Philippe, Quebec. As a result, a lease liability of $246.7 million has been recognized in the condensed consolidated statement of financial position.
12
BRP Inc.
NOTES TO
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three- and
six-month
periods ended July 31, 2026 and 2025
[Unaudited]
[Tabular figures are in millions of Canadian dollars, unless otherwise
indicated]
6.
CAPITAL STOCK
The changes in capital stock issued and outstanding were as follows:
Number of shares
Carrying Amount
Subordinate voting shares
Balance as at January 31, 2026
38,303,785
$276.7
Issued upon exercise of stock options
673,169
34.3
Repurchased under the normal course issuer bid program
(2,258,400)
(17.7)
Balance as at July 31, 2026
36,718,554
$293.3
Multiple voting shares
Balance as at January 31, 2026
34,819,204
$2.8
Balance as at July 31, 2026
34,819,204
$2.8
Total outstanding as at July 31, 2026
71,537,758
$296.1
a)
Normal course issuer bid program (“NCIB”)
During the
six-month
period ended July 31, 2026, the Company continued share repurchases
under the NCIB that was announced and started during the fiscal year ended January 31, 2026 and repurchased for cancellation 2,258,400 subordinate voting shares, for a total consideration of $201.7 million, of which $6.4 million will
be paid upon settlement.
Of the total consideration of $201.7 million, $17.7 million represents the carrying amount of
the shares repurchased and $184.0 million represents the amount charged to retained earnings.
As at July 31, 2026, a
$42.3 million financial liability, with a corresponding amount in equity, was recorded in the consolidated statements of financial position in relation to the NCIB. This liability represented the value of subordinate voting shares expected to
be repurchased by a designated broker under an automatic share purchase plan. This automatic share purchase plan allows the designated broker to purchase subordinate voting shares under
pre-set
conditions at
times when the Company would ordinarily not be permitted to purchase shares due to regulatory restrictions or self-imposed blackout periods.
13
BRP Inc.
NOTES TO
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three- and
six-month
periods ended July 31, 2026 and 2025
[Unaudited]
[Tabular figures are in millions of Canadian dollars, unless otherwise
indicated]
7.
SHARE BASED PAYMENT PLANS
The Company has two share-based payment plans: pursuant to its stock option plan, the Company has made equity-settled stock option
grants, and pursuant to its share unit plan, it has made cash-settled restricted share units (“RSU”) grants.
a)
Stock options
During the
six-month
periods ended July 31, 2026 and 2025, the Company granted respectively
324,840 and 752,300 stock options to eligible officers and employees to acquire subordinate voting shares at an average exercise price of $99.26 and $49.78 respectively. The fair value of the options at the grant date was $35.40 and $17.28,
respectively. Such stock options are time vesting and 25% of the options will vest on each of the first, second, third and fourth anniversary of the grant. The stock options have a
ten-year
term at the end of
which the options expire.
b)
Restricted share units
During the
six-month
periods ended July 31, 2026 and 2025, the Company granted respectively
169,700 and 230,020 RSU. The RSU were granted to eligible employees at a share price of $99.26 and $49.78 respectively. The RSU that were granted during the
six-month
periods ended July 31, 2026 and 2025
are time vesting and 33% of the units will vest on each of the first, second and third anniversary of the grant. The associated compensation expense and liability are recognized over the three-year vesting period. To mitigate the impact of share
price variation on this payment plan, the Company secured hedging contracts.
During the
six-month
period ended July 31, 2025, the Company granted 266,304 restricted share units at a share price of $62.87 under a special long-term incentive program. The restricted share units are subject to
time-based and continued employment criteria as well as the voluntary forfeiture of a number of stock options issued in calendar years 2021, 2022 and 2023. As a result of this grant, the Company recognized in the condensed consolidated interim
statements of net income an expense of $4.3 million, representing the incremental fair value of the restricted share units compared to the 2021-2023 stock options both measured at the grant date. The Company also reclassified $13.6 million
from contributed surplus to other liability, representing the change from an equity to cash settled plan. To mitigate the impact of share price variation on this payment plan, the Company secured hedging contracts.
14
BRP Inc.
NOTES TO
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three- and
six-month
periods ended July 31, 2026 and 2025
[Unaudited]
[Tabular figures are in millions of Canadian dollars, unless otherwise
indicated]
8.
EARNINGS PER SHARE
a)
Basic earnings per share
Details of basic earnings per share were as follows:
Three-month periods ended
Six-month periods ended
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Net (loss) income attributable to shareholders - continuing operations
$(136.6)
$57.9
$(8.7)
$219.0
Net income (loss) attributable to shareholders - discontinued
operations
2.7
(33.6)
4.3
(44.5)
Net (loss) income attributable to shareholders
$(133.9)
$24.3
$(4.4)
$174.5
Weighted average number of shares
72,756,365
73,040,187
72,950,539
73,036,072
Basic (loss) earnings per share - continuing operations
$(1.88)
$0.79
$(0.12)
$3.00
Basic earnings (loss) per share - discontinued operations
0.04
(0.46)
0.06
(0.61)
Basic (loss) earnings per share
$(1.84)
$0.33
$(0.06)
$2.39
b)
Diluted earnings per share
Details of diluted earnings per share were as follows:
Three-month periods ended
Six-month periods ended
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Net (loss) income attributable to shareholders - continuing operations
$(136.6)
$57.9
$(8.7)
$219.0
Net income (loss) attributable to shareholders - discontinued
operations
2.7
(33.6)
4.3
(44.5)
Net (loss) income attributable to shareholders
$(133.9)
$24.3
$(4.4)
$174.5
Weighted average number of shares
72,756,365
73,040,187
72,950,539
73,036,072
Dilutive effect of stock options
—
576,570
—
533,162
Weighted average number of diluted shares
72,756,365
73,616,757
72,950,539
73,569,234
Diluted (loss) earnings per share - continuing operations
$(1.88)
$0.79
$(0.12)
$2.98
Diluted (loss) earnings per share - discontinued operations
0.04
(0.46)
0.06
(0.60)
Diluted (loss) earnings per share
$(1.84)
$0.33
$(0.06)
$2.38
Due to the net loss reported for the three- and
six-month
periods ended July 31, 2026, all 2,833,143 outstanding stock options were considered anti-dilutive. Accordingly, basic and diluted loss per share were identical for both periods. For the corresponding three- and
six-month
periods ended July 31, 2025, 2,610,744 and 2,796,919 stock options, respectively, were deemed to be anti-dilutive and also excluded from the above calculation.
15
BRP Inc.
NOTES TO
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three- and
six-month
periods ended July 31, 2026 and 2025
[Unaudited]
[Tabular figures are in millions of Canadian dollars, unless otherwise
indicated]
9.
REVENUES
Details of revenues were as follows:
Three-month periods ended
Six-month periods ended
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Year-Round Products
$1,485.1
$1,113.8
$2,933.8
$2,219.6
Seasonal Products
427.7
469.7
996.1
888.9
PA&A, OEM Engines and Others
324.0
304.7
698.7
626.6
Revenues
$2,236.8
$1,888.2
$4,628.6
$3,735.1
The following table provides geographic information on the Company’s revenues. The attribution of
revenues was based on customer locations:
Three-month periods ended
Six-month periods ended
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
United States
$1,268.8
$1,080.7
$2,596.3
$2,090.4
Canada
352.6
264.5
748.3
490.3
Europe
293.9
262.6
639.9
570.0
Asia Pacific
144.7
130.4
278.3
268.9
Latin America
172.1
145.8
357.0
309.0
Other
4.7
4.2
8.8
6.5
Revenues
$2,236.8
$1,888.2
$4,628.6
$3,735.1
16
BRP Inc.
NOTES TO
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three- and
six-month
periods ended July 31, 2026 and 2025
[Unaudited]
[Tabular figures are in millions of Canadian dollars, unless otherwise
indicated]
10. OTHER OPERATING (INCOME) EXPENSES
Details of other operating (income) expenses were as follows:
Three-month periods ended
Six-month periods ended
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Foreign exchange (gain) loss on working capital elements
$(7.1)
$(2.4)
$(15.0)
$17.9
Loss (gain) on forward exchange contracts
5.4
4.2
10.1
(7.6)
Other
(0.5)
0.2
1.5
2.4
Other operating (income) expenses
$(2.2)
$2.0
$(3.4)
$12.7
11.
FINANCING COSTS AND INCOME
Details of financing costs and financing income were as follows:
Three-month periods ended
Six-month periods ended
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Interest on long-term debt
$37.3
$40.8
$73.0
$79.2
Interest on lease liabilities
5.3
2.6
8.1
4.9
Net interest on employee future benefit liabilities
2.3
1.9
4.5
3.8
Interest and commitment fees on revolving credit facilities
1.4
1.5
2.6
3.5
Other
4.3
3.7
7.4
5.7
Financing costs
50.6
50.5
95.6
97.1
Financing income
(5.4
)
(3.3
)
(8.5
)
(4.6
)
Net financing costs
$45.2
$47.2
$87.1
$92.5
17
BRP Inc.
NOTES TO
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three- and
six-month
periods ended July 31, 2026 and 2025
[Unaudited]
[Tabular figures are in millions of Canadian dollars, unless otherwise
indicated]
12. INCOME TAXES
Details of income tax expense (recovery) were as follows:
Three-month periods ended
Six-month periods ended
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Current income tax expense (recovery)
Related to current year
$0.7
$(3.3)
$53.2
$41.5
Related to prior years
(21.5)
(21.8)
(20.8)
(22.3)
(20.8)
(25.1)
32.4
19.2
Deferred income tax (recovery) expense
Temporary differences
(19.9)
2.3
(27.2)
(11.8)
Tax benefits not previously recognized and unrecognized tax
benefits
9.7
2.0
11.3
(14.2)
(10.2)
4.3
(15.9)
(26.0)
Income tax expense (recovery)
$(31.0)
$(20.8)
$16.5
$(6.8)
The reconciliation of income taxes computed at the Canadian statutory rates to income tax expense
(recovery) recorded was as follows:
Three-month periods ended
Six-month periods ended
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Income taxes calculated at statutory rates
$(44.5)
26.5%
$9.6
26.5%
$1.9
26.5%
$56.0
26.5%
Increase (decrease) resulting from:
Income tax rate differential of foreign subsidiaries
1.3
(1.4)
3.3
(1.2)
Tax benefits not previously recognized and unrecognized tax benefits
9.7
2.0
11.3
(14.2)
Recognition of income taxes on foreign currency translation
(8.0)
(7.6)
(10.5)
(9.3)
Recognition of income taxes on inflation
—
(1.4)
(2.5)
(2.6)
Permanent differences
[a]
7.1
0.3
9.0
(14.8)
Recognition of tax incentives
—
(25.9)
—
(25.9)
Adjustments in respect of prior years and other
3.4
3.6
4.0
5.2
Income tax expense (recovery)
$(31.0)
$(20.8)
$16.5
$(6.8)
[a]
The permanent differences result mainly from the foreign exchange (gain) loss on
long-term debt denominated in U.S. dollars.
18
BRP Inc.
NOTES TO
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three- and
six-month
periods ended July 31, 2026 and 2025
[Unaudited]
[Tabular figures are in millions of Canadian dollars, unless otherwise
indicated]
13.
FINANCIAL INSTRUMENTS
a)
Fair value
The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair values of the Company’s financial instruments take into account the credit risk embedded in the instrument. For financial assets, the credit risk of the counterparty is considered whereas
for financial liabilities, the Company’s credit risk is considered.
In order to determine the fair value of its financial
instruments, the Company uses, when active markets exist, quoted prices from these markets (“Level 1” fair value). When public quotations are not available in the market, fair values are determined using valuation techniques. When
inputs used in the valuation techniques are only inputs directly and indirectly observable in the marketplace, fair value is presented as “Level 2” fair value. If fair value is assessed using inputs that require considerable
judgment from the Company in interpreting market data and developing estimates, fair value is presented as “Level 3” fair value. For Level 3 fair value, the use of different assumptions and/or estimation methodologies may have
a material effect on the estimated fair values.
The fair value level, carrying amount and fair value of restricted investments,
non-controlling
interest liability, derivative financial instruments and long-term debt were as follows:
As at July 31, 2026
Fair value level
Carrying amount
Fair value
Restricted investments
Level 2
$16.3
$16.3
Contingent consideration
Level 3
$22.4
$22.4
Derivative financial instruments
Forward exchange contracts
Assets
$5.3
$5.3
Liabilities
(27.2)
(27.2)
Interest rate cap
1.9
1.9
Other
Assets
7.4
7.4
Liabilities
(3.5)
(3.5)
Level 2
$(16.1)
$(16.1)
Long-term debt (including current portion)
Term Facility (Note 5)
Level 1
$(2,408.4)
$(2,408.3)
Term Loans (Note 5)
Level 2
(91.1)
(94.9)
$(2,499.5)
$(2,503.2)
For cash, trade and other receivables, revolving credit facilities, trade payables and accruals, and
dealer holdback programs and customer deposits, the carrying amounts reported on the condensed consolidated interim statements of financial position or in the notes approximate the fair values of these items due to their short-term nature.
19
BRP Inc.
NOTES TO
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three- and
six-month
periods ended July 31, 2026 and 2025
[Unaudited]
[Tabular figures are in millions of Canadian dollars, unless otherwise
indicated]
13.
FINANCIAL INSTRUMENTS [CONTINUED]
Cash includes $4.3 million held by BRP Saint Petersburg LLC ($4.4 million as at January 31, 2026). This cash is subject to
regulatory restrictions and is therefore not available for general use by the other entities within the group.
b)
Liquidity risk
The following table summarizes the contractual maturities of the Company’s financial liabilities as at July 31, 2026:
Less than
1 year
1-3 years
4-5 years
More than
5 years
Total
amount
Trade payables and accruals
$1,505.7
$—
$—
$—
$1,505.7
Long-term debt (including interest)
196.5
401.6
2,498.7
—
3,096.8
Lease liabilities (including interest)
74.3
131.4
89.5
368.6
663.8
Derivative financial instruments
23.9
6.8
—
—
30.7
Other financial liabilities
152.1
24.2
20.6
25.5
222.4
Other liabilities
33.9
8.6
—
—
42.5
Total
$1,986.4
$572.6
$2,608.8
$394.1
$5,561.9
14.
DISCONTINUED OPERATIONS
Manitou and Alumacraft
During the
year ended January 31, 2026, the Company completed the sales of Alumacraft Boat Co. (“Alumacraft”) and Triton Industries Inc. (“Manitou”). Consequently, these businesses are presented as discontinued operations as of
July 31, 2025, and the associated assets and liabilities were disposed as at January 31, 2026.
Telwater
During the three-month period ended April 30, 2025, the Company announced a definitive agreement to sell 100% of the outstanding
shares of Telwater Pty, Ltd. to Yamaha Motor Australia Pty, Ltd. On December 18, 2025, the Company acknowledged the Australian Competition and Consumer Commission’s decision to oppose the proposed sale of Telwater to Yamaha Motor
Australia Pty Ltd., a subsidiary of Yamaha Motor Co., Ltd. The Company continues to pursue potential buyers, keeping Telwater under the sale process.
As at July 31, 2026, Telwater is presented as discontinued operations and the associated assets and liabilities as held for sale.
20
BRP Inc.
NOTES TO
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three- and
six-month
periods ended July 31, 2026 and 2025
[Unaudited]
[Tabular figures are in millions of Canadian dollars, unless otherwise
indicated]
14.
DISCONTINUED OPERATIONS [CONTINUED]
The net income (loss) and comprehensive income (loss) from discontinued operations are as follows:
Three-month periods ended
Six-month periods ended
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Revenues
$32.0
$42.8
$60.6
$105.8
Cost of sales
26.1
74.8
50.5
141.2
Gross profit (loss)
5.9
(32.0)
10.1
(35.4)
Operating expenses
Selling and marketing
0.7
2.7
1.4
9.0
Research and development
0.1
2.6
0.3
7.4
General and administrative
1.4
2.7
2.6
5.5
Other operating (income) expenses
(0.2)
4.0
(0.6)
0.9
Total operating expenses
2.0
12.0
3.7
22.8
Operating income (loss)
3.9
(44.0)
6.4
(58.2)
Financing (income) costs
(0.1)
0.1
(0.1)
0.1
Income (loss) before income taxes
4.0
(44.1)
6.5
(58.3)
Income tax expense (recovery)
1.3
(10.5)
2.2
(13.8)
Net income (loss) from discontinued operations
$2.7
$(33.6)
$4.3
$(44.5)
Three-month periods ended
Six-month
periods ended
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Net income (loss) from discontinued operations
[a]
$2.7
$(33.6)
$4.3
$(44.5)
Net changes in unrealized gain (loss) on translation of foreign
operations
0.2
(0.7)
0.9
7.3
Total comprehensive income (loss) from discontinued operations
[a]
$2.9
$(34.3)
$5.2
$(37.2)
[a]
Nil amount of net income (loss) and comprehensive income (loss) are attributable
to
non-controlling
interest.
21
BRP Inc.
NOTES TO
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three- and
six-month
periods ended July 31, 2026 and 2025
[Unaudited]
[Tabular figures are in millions of Canadian dollars, unless otherwise
indicated]
14.
DISCONTINUED OPERATIONS [CONTINUED]
As at July 31, 2026, the carrying amount of assets and liabilities presented as held for sale is as follows:
July 31,
2026
January 31,
2026
Inventories
$13.8
$13.6
Property, plant and equipment
72.2
69.4
Intangible assets
40.3
38.7
Other assets
4.6
4.4
Assets classified as held for sale
$130.9
$126.1
Trade payables and accruals
$11.7
$8.8
Provisions
7.3
6.9
Deferred tax liabilities
9.2
8.7
Other liabilities
2.2
2.4
Liabilities associated to assets classified as held for
sale
$30.4
$26.8
Assets net of liabilities held for sale
$100.5
$99.3
The net cash flows (used in) from discontinued operations are as follows:
Six-month periods ended
July 31,
2026
July 31,
2025
Net cash flows from (used in) operating activities
$0.4
$(60.7)
Net cash flows (used in) from investing activities
(1.4)
16.5
Net cash flows from financing activities
—
44.5
Net cash flows (used in) from discontinued
operations
$(1.0)
$0.3
22

----- d117601dex992.htm -----
EX-99.2
3
d117601dex992.htm
EX-99.2
EX-99.2
Exhibit 99.2
BRP INC.
MANAGEMENT’S
DISCUSSION AND
ANALYSIS
FOR THE THREE- AND
SIX-MONTH
PERIODS ENDED JULY 31, 2026
Table of contents
Glossary
2
Basis of Presentation
3
Forward-Looking Statements and
Non-IFRS
Measures
4
Business Overview
6
Factors Affecting the Company’s Results of Operations
7
Executive Summary
10
Retail Performance & Market Statistics
11
Results of Operations
12
Analysis of Results for the Second Quarter of Fiscal 2027
12
Geographical Trends for the Second Quarter of Fiscal 2027
14
Analysis of Results for the First Half of Fiscal 2027
15
Geographical Trends for the First Half of Fiscal 2027
17
Discontinued Operations
18
Foreign Exchange
20
Liquidity and Capital Resources
21
Contractual Obligations
23
Capital Resources
24
Consolidated Financial Position
26
Off-Balance
Sheet Arrangements
27
Transaction Between Related Parties
29
Financial Instruments
29
Non-IFRS
Measures and Reconciliation Tables
31
Reconciliation Tables
32
Summary of Consolidated Quarterly Results
35
Reconciliation Table for Consolidated Quarterly Results
36
Critical Accounting Estimates
39
Controls and Procedures
41
Risk Factors
42
Disclosure of Outstanding Shares
43
Additional Information
43
BRP Inc.
Management’s Discussion and Analysis
1
Glossary
Abbreviations
Description
Abbreviations
Description
3WV
Three-Wheel Vehicles
MD&A
Management’s Discussion & Analysis
ATV
All-Terrain
Vehicles
NCIB
Normal Course Issuer Bid
BPS
Basis points
OEM
Original Equipment Manufacturer
CAPEX
Capital Expenditure
ORV
Off-Road
Vehicles
CGU
Cash Generating Unit
PA&A
Parts, Accessories & Apparel
CORRA
Canadian Overnight Repo Rate Average. Defined as the Daily Compounded CORRA or the forward-looking term rate based on CORRA plus a customary credit spread adjustment, when applicable
PP&E
Property, Plant & Equipment
EBITDA
Earnings Before Interest, Taxes, Depreciation & Amortization
PWC
Personal Watercraft
EPS
Earnings (Loss) Per Share
R&D
Research & development
EURIBOR
Euro Interbank Offered Rate
SOFR
Secured Overnight Financing Rate
EV
Electric Vehicles
Term SOFR
Defined as the forward-looking term rate based on SOFR plus a customary credit spread adjustment, when applicable
G&A
General & Administrative
SSV
Side-by-Side
Vehicles
IAS
International Accounting Standards
S&M
Selling & marketing
IFRS
IFRS
®
Accounting Standards as issued by the International Accounting Standards Board
Working Capital
Current assets less current liabilities
International
All regions except United States & Canada
BRP Inc.
Management’s Discussion and Analysis
2
Basis of Presentation
The following MD&A provides information concerning the financial position and results of operations of BRP Inc. (the
“Company” or “BRP”) for the second quarter of the fiscal year ending January 31, 2027. This MD&A should be read in conjunction with the unaudited condensed consolidated interim financial statements for the three- and
six-month
periods ended July 31, 2026 and 2025. Some of the information included in this discussion and analysis contains forward-looking statements that involve risks and uncertainties. Actual results
may differ materially from underlying forward-looking statements as a result of various factors, including those described in the “Forward-Looking Statements” section of this MD&A. This MD&A reflects information available to the
Company as at September 2, 2026.
The unaudited condensed consolidated interim financial statements of the Company for the
three- and
six-month
periods ended July 31, 2026 and 2025 have been prepared using accounting policies consistent with IFRS
®
Accounting Standards
as issued by the International Accounting Standards Board and in accordance with IAS 34 “
Interim Financial Reporting
”. All amounts presented are in Canadian dollars unless otherwise indicated. The Company’s fiscal year is
the twelve-month period ending January 31. All references in this MD&A to “Fiscal 2027”, “Fiscal 2026”, and “Fiscal 2025” are to the Company’s fiscal year ended January 31, 2027, 2026 and 2025
respectively.
This MD&A, approved by the Board of Directors on September 2, 2026, is based on the Company’s
unaudited condensed consolidated interim financial statements and accompanying notes for the three- and
six-month
periods ended July 31, 2026 and 2025.
BRP Inc.
Management’s Discussion and Analysis
3
Forward-Looking Statements and
Non-IFRS
Measures
Forward-Looking Statements
Certain
statements in this MD&A about the Company’s current and future plans, including statements relating to the declaration and payment of dividends, its prospects, expectations, anticipations, estimates and intentions, results, levels of
activity, performance, objectives, targets, goals, achievements, priorities and strategies, financial position, market position, including its ambition to become North America’s leading
off-road
brand
and commitment to make major product announcements every six months for the next four years, capabilities, competitive strengths and beliefs, the prospects and trends of the industries in which the Company operates, the expected demand for products
and services in the markets in which the Company competes, research and product development activities, including projected design, characteristics, capacity or performance of future products and their expected scheduled entry to market, expected
financial requirements and the availability of capital resources and liquidity, the anticipated benefits and impacts associated with BRP Financial Services, its new branded retail financing program in the United States, the Company’s ability
to complete its process for the sale of Telwater as expected and to manage and mitigate the risks associated therewith, at expected cost levels and expected proceeds, the expected impact of the supplier financial restructuring, ongoing geopolitical
instability in the Middle East, including the impact of ongoing volatility in global oil and energy prices, the expected impact of tariffs, duties and other trade restrictions, and the Company’s ability to manage such tariff’s exposure,
including through incremental mitigation measures, potential supply chain disruptions, inflationary pressures, and broader macroeconomic conditions or any other future events or developments and other statements in this MD&A that are not
historical facts constitute forward-looking statements within the meaning of applicable securities laws. The words “may”, “will”, “would”, “should”, “could”, “expects”,
“forecasts”, “plans”, “intends”, “trends”, “indications”, “anticipates”, “believes”, “estimates”, “outlook”, “predicts”,
“projects”, “likely” or “potential” or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements.
Forward-looking statements are presented for the purpose of assisting readers in understanding certain key elements of the
Company’s current objectives, goals, targets, strategic priorities, expectations and plans, and in obtaining a better understanding of the Company’s business and anticipated operating environment. Readers are cautioned that such
information may not be appropriate for other purposes; readers should not place undue reliance on forward-looking statements contained herein. Forward-looking statements, by their very nature, involve inherent risks and uncertainties and are based
on a number of assumptions, both general and specific. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance of
the Company or the industry to be materially different from the outlook or any future results or performance implied by such statements. In addition, many factors could cause the Company’s actual results, level of activity, performance or
achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the risk factors discussed in greater detail under the heading “Risk
Factors” in the Company’s MD&A for the fiscal year ended January 31, 2026.
The forward-looking statements
contained in this MD&A are made as of the date of this MD&A, and the Company has no intention and undertakes no obligation to update or revise any forward-looking statements to reflect future events, changes in circumstances, or changes in
beliefs, unless required by applicable securities regulations. In the event that the Company does update any forward-looking statements contained in this MD&A, no inference should be made that the Company will make additional updates with
respect to that statement, related matters or any other forward-looking statement.
BRP Inc.
Management’s Discussion and Analysis
4
The Company made a number of economic, market and operational assumptions in preparing
and making certain forward-looking statements contained in this MD&A, including without limitation the following assumptions: industries in both Seasonal and Year-Round Products consistent with current trends and continuously challenging
macroeconomic and geopolitical environments; expected market share volatility; main currencies in which the Company operates will remain at near current levels; there will be no significant changes in tax laws or treaties applicable to the Company;
the supply base will remain able to support product development and planned production rates on commercially acceptable terms in a timely manner; the absence of unusually adverse weather conditions, especially in peak seasons. BRP cautions that its
assumptions may not materialize, and that the currently challenging macroeconomic and geopolitical environments in which it evolves, including specifically the uncertainty around the potential evolution of tariffs, duties and other trade
restrictions (and any retaliatory measures), as well as the ongoing geopolitical instability in the Middle East and its potential negative impact on the global economy, may render such assumptions, although believed reasonable at the time they were
made, subject to greater uncertainty. These assumptions reflect certain U.S. tariffs currently in effect; however, they do not fully incorporate the potential expansion of U.S. tariffs, including tariffs on all imports from Canada and Mexico, and
potential retaliatory tariffs. Given the fast-evolving situation and the high degree of uncertainty around the duration of a potential trade war, it is difficult to predict how the effects would flow through the economy. New and existing tariffs
could significantly affect the outlooks for economic growth, consumer spending, inflation and the Canadian dollar.
Non-IFRS
Measures
This MD&A makes reference to certain
non-IFRS
measures. These measures are not recognized
measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement
those IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company’s
financial information reported under IFRS.
The Company defines and reconciles these measures in the
“Non-IFRS
Measures and Reconciliation Tables” section of this MD&A.
BRP Inc.
Management’s Discussion and Analysis
5
Business Overview
BRP Inc. is a global leader in the world of powersports products and powertrains, built on 80 years of ingenuity and intensive consumer
focus. Through its portfolio of industry-leading and distinctive brands featuring
Ski-Doo
and Lynx snowmobiles,
Sea-Doo
watercraft and pontoons,
Can-Am
on-
and
off-road
vehicles, Quintrex boats and Rotax marine propulsion systems, Rotax engines for karts and recreational aircraft
and Pinion gearboxes, BRP unlocks exhilarating adventures and provides access to experiences across different playgrounds. The Company completes its lines of products with a dedicated parts, accessories and apparel portfolio to fully optimize the
riding experience.
As at the end of Fiscal 2026, the Company employed close to 17,000 employees worldwide. It sold its products in
over 110 countries. The products were sold directly through a network of approximately 2,050 dealers in 21 countries, as well as through approximately 140 distributors that served approximately 375 additional dealers.
The Company designs, develops, manufactures and sells powersports vehicles. The Company’s diversified portfolio of products
includes Year-Round Products, Seasonal Products and Parts, Accessories & Apparel, OEM Engines and others. Year-Round Products consist of BRP vehicles that are sold and used throughout the year in most climates and include ATVs, SSVs, 3WVs
and electric motorcycles product lines. All products within the Year-Round Product category are sold under the
Can-Am
brand. Seasonal products consist of BRP products that are mostly used
in specific seasons. These products include snowmobiles, which are mainly used during the winter season with sales to dealers concentrated in the months of September to January, as well as PWC and
Sea-Doo
pontoons, which are mainly used during the summer season, with sales to dealers concentrated in the months of January to April. All these products leverage BRP’s Rotax engines. PA&A, OEM Engines and Others consist of parts, accessories,
and apparel (referred to as “PA&A”), Rotax engines for karts, recreational aircrafts and jet boats, as well as other products and services.
The following table shows the percentage of total revenues by category:
Proportion of Total Revenues
(in percentages)
Three-month periods ended
Six-month periods ended
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Year-Round Products
66.4%
59.0%
63.4%
59.4%
Seasonal Products
19.1%
24.9%
21.5%
23.8%
PA&A, OEM Engines and Others
14.5%
16.1%
15.1%
16.8%
Total Revenues
[1]
100.0%
100.0%
100.0%
100.0%
[1]
Figures are on a continuing basis.
BRP Inc.
Management’s Discussion and Analysis
6
Factors Affecting the Company’s Results of Operations
Revenues and Sales Program Costs
The
Company’s revenues are primarily derived from the wholesale activities to dealers and distributors of the Company’s manufactured vehicles, including Year-Round Products, Seasonal Products, and PA&A, OEM Engines and Others. Revenue
recognition normally occurs when products are shipped to dealers or distributors from the Company’s facilities.
In order to
support the wholesale activities of the Company and the retail activities of dealers and distributors, the Company may provide support in the form of various sales programs consisting of cash and
non-cash
incentives. The cash incentives consist mainly of rebates and volume discounts given to dealers and distributors, free or extended coverage period under dealer and distributor inventory financing programs, and retail financing programs. The cost of
these cash incentives is recorded as a reduction of revenues. The
non-cash
incentives mainly consist of extended warranty coverage or free PA&A. When an extended warranty coverage is given with the
purchase of a product, a portion of the revenue recognized upon the sale of that product is deferred and recognized during the extended warranty coverage period. The cost of the free PA&A is recorded in cost of sales.
The support provided to dealers, distributors and consumers tends to increase when general economic conditions are difficult, when
changing market conditions require the launch of new or more competitive programs, or when dealer and distributor inventory is above appropriate levels.
Under dealer and distributor inventory financing arrangements, the Company could be required to purchase repossessed new and unused
products in certain cases of default by dealers or distributors. The cost of repossession tends to increase when dealers or distributors are facing challenging and prolonged difficult retail conditions and when their
non-current
inventory level is high. During the current fiscal year and previous fiscal year, the Company did not experience significant repossessions under its dealer and distributor inventory financing
arrangements.
Refer to the
“Off-Balance
Sheet Arrangements” section of this MD&A for more information on dealer and distributor inventory financing arrangements.
Commodity Costs
Approximately 75% of
the Company’s cost of sales consists of material used in the manufacturing process. Therefore, the Company is exposed to the fluctuation of prices of certain raw materials such as aluminum, steel, plastic, resins, stainless steel, copper,
rubber and certain rare earth metals. Additionally, the Company is exposed to fuel price fluctuations related to its procurement and distribution activities. The Company does not hedge its long-term exposure to such price fluctuations. Therefore, an
increase in commodity prices could negatively impact the Company’s operating results if it is not able to transfer these cost increases to dealers, distributors or consumers.
BRP Inc.
Management’s Discussion and Analysis
7
Warranty Costs
The Company’s regular warranty generally covers periods ranging from twelve months to three years for most products. In certain
circumstances, the Company provides extended warranty coverage as a result of sales programs, under certain commercial accounts, or as required by local regulations. During the warranty period, the Company reimburses dealers and distributors for the
entire cost of repair or replacement performed on the products (mainly composed of parts or accessories provided by the Company and labour costs incurred by dealers or distributors). In addition, the Company sells in the normal course of business
and provides under certain sales programs extended product warranties.
During its product development process, the Company ensures
that high quality standards are maintained at each development stage of a new product. This includes the development of detailed product specifications, the evaluation of the quality of the supply chain and the manufacturing methods and detailed
testing requirements over the development stage of the products. Additionally, product quality is ensured by quality inspections during and after the manufacturing process.
The Company records a regular warranty provision when products are sold. Management believes that, based on available information, the
Company has adequate provisions to cover any future warranty claims on products sold. However, future claim amounts can differ significantly from provisions that are recorded in the condensed consolidated interim statements of financial position.
For extended warranty, the claims are recorded in cost of sales as incurred.
Foreign Exchange
The Company’s revenues are reported in Canadian dollars but are mostly generated in U.S. dollars, Canadian dollars and euros. The
Company’s revenues reported in Canadian dollars are to a lesser extent exposed to foreign exchange fluctuations with the Australian dollar, Brazilian real, Swedish krona, Norwegian krone, British pound, New Zealand dollar, Mexican peso and
Chinese yuan. The costs incurred by the Company are mainly denominated in Canadian dollars, U.S. dollars and euros and, to a lesser extent in Mexican pesos. Therefore, recorded revenues, gross profit and operating income in Canadian dollars are
exposed to foreign exchange fluctuations. The Company’s facilities are located in different countries, which helps mitigate some of its foreign currency exposure.
As of July 31, 2026, the Company had an outstanding balance of U.S. $1,716.5 million ($2,408.4 million) under its U.S.
$1,765.0 million ($2,476.4 million) term facility agreement (the “Term Facility”), which results in a gain or loss in net income when the U.S. dollar/Canadian dollar exchange rate at the end of the period varies from the opening
period rate. Additionally, the Company’s interest expense on the Term Facility is exposed to U.S. dollar/Canadian dollar exchange rate fluctuations. The Company does not currently hedge the U.S. dollar/Canadian dollar exchange rate fluctuation
exposures related to its Term Facility, and therefore, an increase in the value of the U.S. dollar against the Canadian dollar could negatively impact the Company’s net income.
For further detail relating to the Company’s exposure to foreign currency fluctuations, see “Financial Instruments –
Foreign Exchange Risk” section of this MD&A.
BRP Inc.
Management’s Discussion and Analysis
8
Net Financing Costs (Financing Costs less Financing Income)
Net financing costs are incurred principally on long-term debt, defined benefit pension plan liabilities and revolving credit facility.
As at July 31, 2026, the Company’s long-term debt of $2,499.5 million was mainly comprised of the Term Facility, which includes Term Loans
B-2
and
B-3,
the currently outstanding tranches of which both bear interest at Term SOFR plus 2.25%. The Company entered into interest rate cap contracts, which limit its exposure to interest rates increases.
Income Taxes
The Company is subject
to federal, state and provincial income taxes in jurisdictions in which it conducts business. The Canadian income tax statutory rate was 26.5% for the three- and
six-month
periods ended July 31, 2026.
However, the Company’s effective consolidated tax rate is influenced by various factors, including the mix of accounting profits or losses before income tax among tax jurisdictions in which it operates and the foreign exchange gain or loss on
the Term Facility. The Company expects to pay cash taxes in all tax jurisdictions for Fiscal 2027.
Seasonality
The Company’s revenues and operating income experience substantial fluctuations from quarter to quarter. In general, wholesale
sales of the Company’s products are higher in the period immediately preceding and during their respective season of use. However, the mix of product sales may vary considerably from time to time as a result of changes in seasonal and
geographic demand, the introduction of new products and models and production scheduling for particular types of products.
BRP Inc.
Management’s Discussion and Analysis
9
Executive Summary
The three-month period ended July 31, 2026 marked the second consecutive quarter of Fiscal 2027 with double-digit revenue growth
compared to the same period last year. The increase in revenues was primarily driven by higher ORV shipments to support retail demand and a favourable SSV mix resulting from the introduction of new models. Revenue growth was partially offset by
lower PWC deliveries, mostly reflecting units that were shipped earlier in the first quarter. Gross profit and gross profit margin decreased compared to last year, primarily due to the impacts of Section 232 tariffs on Steel, Aluminum and
Copper imports into the United States, as well as the effect of a supplier financial restructuring. The supplier financial restructuring represented an unfavourable impact of $74.8 million or 330 bps on gross profit and gross profit margin
respectively. These impacts were partially offset by the positive effects of higher volumes and lower sales programs mainly in ORV.
The Company’s North American retail sales were up 1% for the three-month period ended July 31, 2026 compared to the same
period last year. The increase in retail sales was driven by positive industry trends in SSV and market share gains in ORV, which were partially offset by lower retail sales in Seasonal Products.
Financial Highlights
(in millions of Canadian
dollars, except per share
data and margin)
Three-month periods ended
Six-month
periods ended
July 31,
2026
July 31,
2025
Variance
($)
Variance
(%)
July 31,
2026
July 31,
2025
Variance
($)
Variance
(%)
Income Statement
[2]
Total Revenues
$2,236.8
$1,888.2
$348.6
18.5%
$4,628.6
$3,735.1
$893.5
23.9%
Gross Profit
262.5
397.7
(135.2)
(34.0%)
824.1
792.5
31.6
4.0%
Gross Profit Margin (%)
11.7%
21.1%
N/A
(940bps)
17.8%
21.2%
N/A
(340bps)
Operating Income (Loss)
(50.0)
90.4
(140.4)
(155.3%)
175.5
184.3
(8.8)
(4.8%)
Normalized EBITDA
[1]
138.8
213.2
(74.4)
(34.9%)
473.2
414.0
59.2
14.3%
Net (Loss) Income
(136.8)
57.1
(193.9)
(339.6%)
(9.5)
218.1
(227.6)
(104.4%)
Normalized Net Income (Loss)
[1]
(13.0)
66.9
(79.9)
(119.4%)
121.5
101.5
20.0
19.7%
Diluted EPS
(1.88)
0.79
(2.67)
(338.0%)
(0.12)
2.98
(3.10)
(104.0%)
Normalized Diluted EPS
[1]
(0.18)
0.92
(1.10)
(119.6%)
1.66
1.39
0.27
19.4%
Net Income (Loss) from Discontinued Operations
2.7
(33.6)
36.3
108.0%
4.3
(44.5)
48.8
109.7%
[1]
See
“Non-IFRS
Measures” section.
[2]
Unless otherwise indicated, figures are on a continuing basis.
Recent events – Highlights from Club BRP 2027
●
Demonstrating its ambition to become North America’s leading
off-road
brand, the Company committed to major product announcements every six months for the next four years.
●
The Company continued to bolster its product pipeline with several industry-firsts and innovative products, namely the
all-new
limited-edition
Sea-Doo
RXP-X
Senna 350 equipped with the most powerful PWC engine from the factory; an upgraded Spark lineup
delivering more horsepower and the addition of the new Spark X model with premium features; the second-generation
Can-Am
Defender HD10 as well as the most significant evolution of the
Can-Am
Ryker platform since its initial launch.
●
The Company also launched BRP Financial Services, its new branded retail financing program in the United States.
BRP Inc.
Management’s Discussion and Analysis
10
Retail Performance & Market Statistics
North American retail sales - for the Second Quarter of Fiscal 2027
The Company’s North American retail sales increased by 1% for the three-month period ended July 31, 2026 compared to the same
period last year. The increase in retail sales was driven by positive industry trends in SSV and market share gains in ORV, which were partially offset by lower retail sales in Seasonal Products.
●
North American Year-Round Products retail sales increased on a percentage basis in the
low-single
digits compared to the three-month period ended July 31, 2025. The Year-Round Products industry sales increased in the
low-single
digits over the same
period.
●
North American Seasonal Products retail sales decreased on a percentage basis in the
low-single
digits compared to the three-month period ended July 31, 2025. The Seasonal Products industry sales increased on a percentage basis in the
low-single
digits over the same period.
North American retail sales - for the First Half of Fiscal 2027
The Company’s North American retail sales decreased by 2% for the
six-month
period ended
July 31, 2026 compared to the same period last year. The decrease in retail sales was due to lower Snowmobile industry volumes compared with a strong
end-of-season
last year, as well as to market share losses in Pontoon and PWC. This decrease was partially offset by market share gains in ORV.
●
North American Year-Round Products retail sales increased on a percentage basis in the
mid-single
digits compared to the
six-month
period ended July 31, 2025. The Year-Round Products industry sales increased on a percentage basis in the
low-single
digits over the same period.
●
North American Seasonal Products retail sales decreased on a percentage basis in the
low-teens
range compared to the
six-month
period ended July 31, 2025. The Seasonal Products industry sales decreased on a percentage basis in the
mid-single
digits over the same period.
North American network inventories
As at July 31, 2026, the Company’s North American network inventories increased by 2% compared to July 31, 2025. The
increase was primarily driven by higher ORV inventory to support retail demand and increased PWC inventory mostly resulting from higher shipments, partially offset by lower Snowmobile inventory.
BRP Inc.
Management’s Discussion and Analysis
11
Results of Operations
Analysis of Results for the Second Quarter of Fiscal 2027
The following section provides an overview of the financial performance of the Company for the three-month period ended July 31,
2026 compared to the same period ended July 31, 2025:
(in millions of Canadian dollars, except margin data)
Three-month periods ended
July 31,
2026
July 31,
2025
Variance ($)
Variance (%)
Income Statement
[1]
Revenues
Year-Round Products
$1,485.1
$1,113.8
371.3
33.3%
Seasonal Products
427.7
469.7
(42.0)
(8.9%)
PA&A, OEM Engines and Others
324.0
304.7
19.3
6.3%
Total Revenues
2,236.8
1,888.2
348.6
18.5%
Gross Profit
262.5
397.7
(135.2)
(34.0%)
Gross Profit Margin (%)
11.7%
21.1%
N/A
(940bps)
Operating Expenses
312.5
307.3
5.2
1.7%
Normalized EBITDA
[2]
138.8
213.2
(74.4)
(34.9%)
Net Financing Costs
45.2
47.2
(2.0)
(4.2%)
Income Taxes
(31.0
)
(20.8
)
(10.2)
49.0%
Net (Loss) Income
(136.8
)
57.1
(193.9)
(339.6%)
Normalized Net (Loss) Income
[2]
(13.0
)
66.9
(79.9)
(119.4%)
Net Income (Loss) from Discontinued Operations
2.7
(33.6)
36.3
108.0%
[1]
Unless otherwise indicated, figures are on a continuing basis.
[2]
See
“Non-IFRS
Measures” section.
Revenues
Year-Round Products
The increase in revenues from Year-Round Products was primarily attributable to a higher volume of units sold in ORV to support retail
demand and a favourable SSV product mix resulting from the introduction of new models. The increase was also attributable to lower sales programs across all product lines. The increase includes a favourable foreign exchange rate variation of
$37 million.
Seasonal Products
The
decrease in revenues from Seasonal Products was primarily attributable to a lower volume of units sold in PWC, mostly reflecting units that were shipped earlier in the first quarter. The decrease was partially offset by lower sales programs in
Snowmobile. The decrease includes a favourable foreign exchange rate variation of $5 million.
PA&A, OEM Engines and Others
The increase in revenues from PA&A, OEM Engines and Others was primarily attributable to a higher volume of PA&A sold, coupled
with favourable pricing. The increase was partially offset by unfavourable product mix in OEM Engines. The increase includes a favourable foreign exchange rate variation of $4 million.
Gross Profit
Gross profit and gross profit
margin decreased compared to last year, primarily due to the impacts of Section 232 tariffs on Steel, Aluminum and Copper imports into the United States, as well as the effect of a supplier financial restructuring. These impacts were partially
offset by the positive effects of higher volumes and lower sales programs mainly in ORV. The decrease in gross profit includes a favourable foreign exchange rate variation of $17 million.
BRP Inc.
Management’s Discussion and Analysis
12
Operating Expenses
The following table provides a breakdown of the Company’s Operating Expenses for the three-month period ended July 31, 2026
compared to the three-month period ended July 31, 2025:
(in millions of Canadian dollars)
Three-month periods ended
July 31,
2026
July 31,
2025
Variance ($)
Variance (%)
Selling and marketing
$116.7
$112.4
$4.3
3.8%
Research and development
108.7
96.4
12.3
12.8%
General and administrative
89.3
96.5
(7.2)
(7.5%)
Other operating (income) expenses
(2.2)
2.0
(4.2)
(210.0%)
Operating Expenses
[1]
$312.5
$307.3
$5.2
1.7%
[
1]
Unless otherwise indicated,
figures are on a continuing basis.
The increase in operating expenses was mainly attributable to higher investments in R&D to
support product development, partially offset by lower G&A expenses due to a special long-term incentive program and the costs associated with executive management transition during the three-month period ended July 31, 2025. The increase
in operating expenses includes an unfavourable foreign exchange rate variation of $1 million.
Normalized EBITDA
[1]
The decrease in Normalized EBITDA
[1]
was primarily due to lower gross profit combined with increased operating expenses.
Net Financing Costs
The decrease in net financing costs was not material.
Income Taxes
The increase in income tax
recovery was due to a lower operating income offset by lower benefits related to tax incentives. The effective income tax rate amounted to 18.5% for the three-month period ended July 31, 2026 compared to (57.3)% for the three-month period ended
July 31, 2025. The increase in the effective income tax rate resulted from the tax and accounting treatment of the foreign exchange loss on the Term Facility and lower tax benefits related to tax incentives.
Net (Loss) Income
The decrease in net income
was primarily due to lower gross profit, an unfavourable foreign exchange rate variation on the U.S. denominated long-term debt and increased operating expenses.
Normalized Net (Loss) Income
[1]
The decrease in Normalized net income
[1]
was due to lower gross profit combined
with increased operating expenses.
Net Income (Loss) from Discontinued Operations
The increase in net income from discontinued operations was primarily due to the closing of the sales of Alumacraft’s and
Manitou’s assets during the three-month periods ended July 31, 2025 and October 31, 2025 respectively.
[1]
See
“Non-IFRS
Measures” section.
BRP Inc.
Management’s Discussion and Analysis
13
Geographical Trends for the Second Quarter of Fiscal 2027
Revenues
Revenues by geography
(in millions of Canadian dollars)
Three-month periods ended
Variance ($)
Variance (%)
July 31, 2026
July 31, 2025
Revenues
[1]
($)
United States
$1,268.8
$1,080.7
$188.1
17.4%
Canada
352.6
264.5
88.1
33.3%
International
615.4
543.0
72.4
13.3%
Total Revenues ($)
$2,236.8
$1,888.2
Revenues (%)
United States
56.7%
57.2%
N/A
(50bps
)
Canada
15.8%
14.0%
N/A
180bps
International
27.5%
28.8%
N/A
(130bps)
Total Revenues (%)
100.0%
100.0%
[1]
Unless otherwise indicated, figures are on a continuing basis.
United States
The increase in revenues from
the United States was primarily due to a higher volume of shipments in ORV and 3WV, as well as lower sales programs and favourable pricing across most product lines. The increase was partially offset by a lower volume of shipments in Seasonal
Products. The increase includes a favourable foreign exchange rate variation of $25 million.
Canada
The increase in revenues from Canada was primarily due to a higher volume of shipments, favourable product mix and lower sales programs
across most product lines, as well as favourable pricing across all product lines.
International
The increase in revenues from International was primarily due to a higher volume of shipments in ORV and 3WV, as well as favourable
product mix across most product lines. The increase was partially offset by unfavourable pricing across most product lines. The increase includes a favourable foreign exchange rate variation of $21 million.
BRP Inc.
Management’s Discussion and Analysis
14
Analysis of Results for the First Half of Fiscal 2027
The following section provides an overview of the Company’s financial performance for the
six-month
period ended July 31, 2026 compared to the same period ended July 31, 2025.
(in millions of Canadian dollars, except margin data)
Six-month periods ended
July 31,
2026
July 31,
2025
Variance ($)
Variance (%)
Income Statement
[1]
Revenues
Year-Round Products
$2,933.8
$2,219.6
$714.2
32.2%
Seasonal Products
996.1
888.9
107.2
12.1%
PA&A, OEM Engines and Others
698.7
626.6
72.1
11.5%
Total Revenues
4,628.6
3,735.1
893.5
23.9%
Gross Profit
824.1
792.5
31.6
4.0%
Gross Profit Margin (%)
17.8%
21.2%
N/A
(340bps)
Operating Expenses
648.6
608.2
40.4
6.6%
Normalized EBITDA
[2]
473.2
414.0
59.2
14.3%
Net Financing Costs
87.1
92.5
(5.4)
(5.8%)
Income Taxes
16.5
(6.8)
23.3
342.6%
Net (Loss) Income
(9.5)
218.1
(227.6)
(104.4%)
Normalized Net Income
[2]
121.5
101.5
20.0
19.7%
Net Income (Loss) from Discontinued Operations
4.3
(44.5)
48.8
109.7%
[1]
Unless otherwise indicated, figures are on a continuing basis.
[2]
See
“Non-IFRS
Measures” section.
Revenues
Year-Round Products
The increase in revenues from Year-Round Products was primarily attributable to a higher volume of units sold across most product lines
and to a favourable product mix in ORV resulting from the introduction of new models and features in this product category. The increase was also attributable to lower sales programs and favourable pricing across most product lines. The increase
includes a favourable foreign exchange rate variation of $23 million.
Seasonal Products
The increase in revenues from Seasonal Products was primarily attributable to a higher volume of PWC and Pontoon sold compared to the
same period last year. The increase was also attributable to lower sales programs in Snowmobile and favourable pricing in PWC. The increase includes a favourable foreign exchange rate variation of $4 million.
PA&A, OEM Engines and Others
The
increase in revenues from PA&A, OEM Engines and Others was primarily attributable to a higher volume of PA&A and OEM Engines sold, as well as favourable pricing net of sales programs in these product categories. The increase was partially
offset by unfavourable product mix in OEM Engines. The increase includes a favourable foreign exchange rate variation of $4 million.
Gross Profit
Gross profit increased compared to last year, reflecting the positive impacts of higher volumes, lower sales programs and favourable
pricing, partially offset by the impacts of Section 232 tariffs. Gross profit margin decreased compared to last year, primarily due to the impacts of Section 232 tariffs, as well as the effect of a supplier financial restructuring. These
impacts were partially offset by positive effects of higher volumes, lower sales programs and favourable pricing.
BRP Inc.
Management’s Discussion and Analysis
15
Operating Expenses
The following table provides a breakdown of the Company’s Operating Expenses for the
six-month
period ended July 31, 2026 compared to the
six-month
period ended July 31, 2025:
(in millions of Canadian dollars)
Six-month periods ended
July 31,
2026
July 31,
2025
Variance ($)
Variance (%)
Selling and marketing
$247.1
$219.8
$27.3
12.4%
Research and development
227.5
201.4
26.1
13.0%
General and administrative
177.4
174.3
3.1
1.8%
Other operating (income) expenses
(3.4)
12.7
(16.1)
(126.8%)
Operating Expenses
[1]
$648.6
$608.2
$40.4
6.6%
[
1]
Unless otherwise indicated,
figures are on a continuing basis.
The increase in operating expenses was mainly attributable to higher S&M expenses following
the launch of campaigns to support revenue growth, as well as increased investments in R&D to support product development. The increase was partially offset by a favourable foreign exchange variation on working capital, net of forward contracts.
The increase in operating expenses includes a favourable foreign exchange rate variation of $9 million.
Normalized EBITDA
[1]
The increase in Normalized EBITDA
[1]
was primarily due to higher gross profit, partially offset by increased operating expenses.
Net Financing
Costs
The decrease in net financing costs primarily resulted from a lower interest expense on the Term Facility due to a lower
average interest rate and lower outstanding nominal amount.
Income Taxes
The increase in income tax expense was mainly due to lower tax benefits related to tax incentives. The effective income tax rate amounted
to 235.7% for the
six-month
period ended July 31, 2026 compared to (3.2)% for the
six-month
period ended July 31, 2025. The increase resulted primarily from
the tax and accounting treatment of the foreign exchange loss (gain) on the Term Facility, as well as lower tax benefits related to tax incentives.
Net (Loss)
Income
The decrease in net income was primarily due to an unfavourable foreign exchange rate variation on the U.S. denominated
long-term debt and to a higher income tax expense.
Normalized Net Income
[1]
The increase in Normalized net income
[1]
was primarily due to higher gross profit,
partially offset by increased operating expenses.
Net Income (Loss) from Discontinued Operations
The increase in net income from discontinued operations was primarily due to the closing of the sales of Alumacraft’s and
Manitou’s assets during the three-month periods ended July 31, 2025 and October 31, 2025 respectively.
[1]
See
“Non-IFRS
Measures” section.
BRP Inc.
Management’s Discussion and Analysis
16
Geographical Trends for the First Half of Fiscal 2027
Revenues
Revenues by geography
(in millions of Canadian dollars)
Six-month periods ended
Variance ($)
Variance (%)
July 31, 2026
July 31, 2025
Revenues
[1]
($)
United States
$2,596.3
$2,090.4
$505.9
24.2%
Canada
748.3
490.3
258.0
52.6%
International
1,284.0
1,154.4
129.6
11.2%
Total Revenues ($)
$4,628.6
$3,735.1
Revenues (%)
United States
56.1%
56.0%
N/A
10bps
Canada
16.2%
13.1%
N/A
310bps
International
27.7%
30.9%
N/A
(320bps)
Total Revenues (%)
100.0%
100.0%
[1]
Unless otherwise indicated, figures are on a continuing basis.
United States
The increase in revenues from
the United States was primarily due to a higher volume of shipments, lower sales programs and favourable pricing across most product lines, as well as favourable product mix in SSV. The increase was partially offset by a lower volume of shipments in
Snowmobile and unfavourable product mix across most product lines. The increase includes an unfavourable foreign exchange rate variation of $8 million.
Canada
The increase in revenues from Canada
was primarily due to a higher volume of shipments, favourable product mix and lower sales programs across most product lines, as well as favourable pricing across all product lines.
International
The increase in revenues from
International was primarily due to a higher volume of shipments and favourable product mix across most product lines. The increase was partially offset by unfavourable pricing and higher sales programs in PWC and ORV. The increase includes a
favourable foreign exchange rate variation of $39 million.
BRP Inc.
Management’s Discussion and Analysis
17
Discontinued Operations
Manitou and Alumacraft
During the
year ended January 31, 2026, the Company completed the sales of Alumacraft Boat Co. (“Alumacraft”) and Triton Industries Inc. (“Manitou”). Consequently, these businesses are presented as discontinued operations as of
July 31, 2025, and the associated assets and liabilities were disposed as at January 31, 2026.
Telwater
During the three-month period ended April 30, 2025, the Company announced a definitive agreement to sell 100% of the outstanding
shares of Telwater Pty, Ltd. to Yamaha Motor Australia Pty, Ltd. On December 18, 2025, the Company acknowledged the Australian Competition and Consumer Commission’s decision to oppose the proposed sale of Telwater to Yamaha Motor
Australia Pty Ltd., a subsidiary of Yamaha Motor Co., Ltd. The Company continues to pursue potential buyers, keeping Telwater under the sale process.
As at July 31, 2026, Telwater is presented as discontinued operations and the associated assets and liabilities as held for sale.
The net income (loss) and comprehensive income (loss) from discontinued operations, as presented in Note 14 of the unaudited
condensed consolidated interim financial statements, are as follows:
Three-month periods ended
Six-month periods ended
(in millions of Canadian dollars)
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Revenues
$32.0
$42.8
$60.6
$105.8
Cost of sales
26.1
74.8
50.5
141.2
Gross profit (loss)
5.9
(32.0)
10.1
(35.4)
Operating expenses
Selling and marketing
0.7
2.7
1.4
9.0
Research and development
0.1
2.6
0.3
7.4
General and administrative
1.4
2.7
2.6
5.5
Other operating (income) expenses
(0.2)
4.0
(0.6)
0.9
Total operating
expenses
2.0
12.0
3.7
22.8
Operating income (loss)
3.9
(44.0)
6.4
(58.2)
Financing (income) costs
(0.1)
0.1
(0.1)
0.1
Income (loss) before income taxes
4.0
(44.1)
6.5
(58.3)
Income tax expense (recovery)
1.3
(10.5)
2.2
(13.8)
Net income (loss) from
discontinued operations
$2.7
$(33.6)
$4.3
$(44.5)
BRP Inc.
Management’s Discussion and Analysis
18
Three-month periods ended
Six-month periods ended
(in millions of Canadian dollars)
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Net income (loss) from discontinued operations
[1]
$2.7
$(33.6)
$4.3
$(44.5)
Net changes in unrealized gain (loss) on translation of foreign
operations
0.2
(0.7)
0.9
7.3
Total comprehensive income (loss) from discontinued operations
[1]
$2.9
$(34.3)
$5.2
$(37.2)
[1]
Nil amount of net income (loss) and comprehensive income (loss) are attributable
to
non-controlling
interest.
As at July 31, 2026, the carrying amount of assets and
liabilities presented as held for sale is as follows:
(in millions of Canadian dollars)
July 31,
2026
January 31,
2026
Inventories
$13.8
$13.6
Property, plant and equipment
72.2
69.4
Intangible assets
40.3
38.7
Other assets
4.6
4.4
Assets classified as held for sale
$130.9
$126.1
Trade payables and accruals
11.7
8.8
Provisions
7.3
6.9
Deferred tax liabilities
9.2
8.7
Other liabilities
2.2
2.4
Liabilities associated to assets classified as held for
sale
$30.4
$26.8
Assets net of liabilities held for sale
$100.5
$99.3
The net cash flows (used in) from discontinued operations are as follows:
Six-month periods ended
(in millions of Canadian dollars)
July 31,
2026
July 31,
2025
Net cash flows from (used in) operating activities
$0.4
$(60.7)
Net cash flows (used in) from investing activities
(1.4)
16.5
Net cash flows from financing activities
—
44.5
Net cash flows (used in) from discontinued
operations
$(1.0)
$0.3
BRP Inc.
Management’s Discussion and Analysis
19
Foreign Exchange
The key average exchange rates used to translate foreign-denominated revenues and expenses, excluding any effect of the Company’s
hedging program for the three- and
six-month
periods ended July 31, 2026, were as follows:
Three-month periods ended
Six-month periods ended
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
U.S. dollars (CA$/US$)
1.3953
1.3740
1.3828
1.3978
Euro
(CA$/
€
)
1.6103
1.5788
1.6066
1.5577
The key
period-end
exchange rates used to translate foreign-denominated assets and liabilities
were as follows:
July 31,
2026
January 31,
2026
U.S. dollars (CA$/US$)
1.4031
1.3558
Euro
(CA$/
€
)
1.6159
1.6114
When comparing the operating income (loss) and the income (loss) before income tax for the three- and
six-month
periods ended July 31, 2026, the impacts of foreign exchange fluctuations were as follows:
Foreign exchange (gain) loss
(in millions of Canadian dollars)
Three-month period
Six-month period
Revenues
$(46.0)
$(31.0)
Cost of sales
29.5
30.6
Impact of foreign exchange fluctuations on gross
profit
(16.5)
(0.4)
Operating expenses
1.0
(8.7)
Impact of foreign exchange fluctuations on
operating income
(15.5)
(9.1)
Long-term debt
65.7
200.9
Net financing costs
(0.7)
—
Impact of foreign exchange fluctuations on income
before income taxes
$49.5
$191.8
BRP Inc.
Management’s Discussion and Analysis
20
Liquidity and Capital Resources
Liquidity
The Company’s primary
sources of cash consist of existing cash balances, operating activities and available borrowings under the Revolving Credit Facility, Term Facility, Term Loans and Bank Overdraft.
The Company’s primary use of cash is to fund operations, working capital requirements and capital expenditures in connection with
product development and manufacturing infrastructure. The fluctuation of working capital requirements is primarily due to the seasonality of the Company’s production schedule and product shipments.
A summary of consolidated net cash flows by activity for the
six-month
periods ended
July 31, 2026 and 2025 is presented below:
Six-month periods ended
(in millions of Canadian dollars)
July 31,
2026
July 31,
2025
Net cash flows generated from operating activities
$686.8
$373.1
Net cash flows used in investing activities
(126.2)
(119.1)
Net cash flows used in financing activities
(341.0)
(174.0)
Effect of exchange rate changes on cash and cash equivalents
1.1
11.6
Net increase in cash and cash equivalents
220.7
91.6
Cash and cash equivalents at beginning of period
427.8
180.0
Cash and cash equivalents at end of period
$648.5
$271.6
Free cash flow
[1]
$559.4
$239.2
As presented in the unaudited condensed consolidated interim financial statements, the cash flow will be
analyzed on a consolidated basis.
Net Cash Flows Generated from Operating Activities
A summary of consolidated cash flows from operating activities for the
six-month
periods ended
July 31, 2026 and 2025 is presented below:
Six-month periods ended
(in millions of Canadian dollars)
July 31,
2026
July 31,
2025
Net income (loss)
$(5.2)
$173.6
Non-cash
and
non-operating
items
381.3
208.5
Changes in working capital
320.8
36.5
Income taxes paid, net of refunds
(10.1)
(45.5)
Net cash flows generated from operating
activities
$686.8
$373.1
Net cash flows generated from operating activities totalled $686.8 million for the
six-month
period ended July 31, 2026 compared to $373.1 million for the
six-month
period ended July 31, 2025. The $313.7 million increase in net cash flows
generated was mainly due to favourable changes in working capital and lower income taxes paid, partially offset by lower profitability. The favourable changes in working capital were driven by higher provisions and a decrease in trade receivables,
partially offset by an increase in inventories.
[1
]
See
“Non-IFRS
Measures” section.
BRP Inc.
Management’s Discussion and Analysis
21
Net Cash Flows Used in Investing Activities
A summary of consolidated cash flows used in investing activities for the
six-month
periods ended
July 31, 2026 and 2025 is presented below:
Six-month periods ended
(in millions of Canadian dollars)
July 31,
2026
July 31,
2025
Additions to property, plant and equipment
$(105.5)
$(115.5)
Additions to intangible assets
(21.9)
(18.4)
Other
1.2
14.8
Net cash flows used in investing activities
$(126.2)
$(119.1)
Net cash flows used in investing activities totalled $126.2 million for the
six-month
period ended July 31, 2026 compared to $119.1 million for the
six-month
period ended July 31, 2025. The $7.1 million increase in net cash flows
used was not significant, reflecting comparable investments in property, plant and equipment and intangible assets compared to the same period last year.
Net
Cash Flows Used in Financing Activities
A summary of consolidated cash flows used in financing activities for the
six-month
periods ended July 31, 2026 and 2025 is presented below:
Six-month periods ended
(in millions of Canadian dollars)
July 31,
2026
July 31,
2025
Repurchase of subordinate voting shares
$(195.3)
$—
Dividends paid
(36.4)
(31.3)
Repayment of long-term debt
(25.4)
(31.4)
Interest paid
(82.6)
(86.0)
Repayment of lease liabilities
(27.8)
(29.1)
Issuance of subordinate voting shares
26.0
0.6
Other
0.5
3.2
Net cash flows used in financing activities
$(341.0)
$(174.0)
Net cash flows used in financing activities totalled $341.0 million for the
six-month
period ended July 31, 2026 compared to $174.0 million for the
six-month
period ended July 31, 2025. The $167.0 million increase in net cash flows
used was mainly attributable to the repurchase of subordinate voting shares during the
six-month
period ended July 31, 2026. The increase was partially offset by a higher number of stock options exercised
during the same period.
BRP Inc.
Management’s Discussion and Analysis
22
Contractual Obligations
The following table summarizes the Company’s significant contractual obligations as at July 31, 2026:
(in millions of Canadian dollars)
Less than
1 year
1-3 years
4-5 years
More than
5 years
Total
amount
Trade payables and accruals
$1,505.7
$—
$—
$—
$1,505.7
Long-term debt (including interest)
196.5
401.6
2,498.7
—
3,096.8
Lease liabilities (including interest)
74.3
131.4
89.5
368.6
663.8
Derivative financial instruments
23.9
6.8
—
—
30.7
Other financial liabilities
152.1
24.2
20.6
25.5
222.4
Other liabilities
33.9
8.6
—
—
42.5
Total
$1,986.4
$572.6
$2,608.8
$394.1
$5,561.9
The Company enters into purchasing agreements with suppliers related to material used in production.
These agreements are usually entered into before production begins and may specify a fixed or variable quantity of material to be purchased. Due to the uncertainty as to the amount and pricing of material that may be purchased, the Company is not
able to determine with precision its commitments in connection with these supply agreements.
Management believes that the
Company’s operating activities and available financing capacity will provide adequate sources of liquidity to meet its short-term and long-term needs.
BRP Inc.
Management’s Discussion and Analysis
23
Capital Resources
Revolving Credit Facility
The Company has a
Revolving Credit Facility totaling $1,500.0 million, which can also be drawn in U.S dollar or Euro equivalent. As at July 31, 2026, the Company had no outstanding amount drawn on the Revolving Credit Facility (nil as at January 31,
2026). Commitment fees on the undrawn amount of the Revolving Credit Facility, varying from 0.25% to 0.40%, were 0.25%.
The
applicable interest rates are subject to a customary credit spread adjustment ranging from 0.45% to 3.00%, which varies depending on a Leverage Ratio. Based on the Leverage Ratio, the cost of borrowing as at July 31, 2026, in Canadian dollars,
was either the CORRA plus 1.70% or the Canadian Prime Rate plus 0.70%. In U.S. dollars, it was either the SOFR plus 1.70%, the U.S. Base Rate plus 0.70% or the U.S. Prime Rate plus 0.70%. In Euros, it was the EURIBOR plus 1.70%.
The Company is required to maintain, under certain conditions, a minimum fixed charge coverage ratio. Additionally, the total available
borrowing under the Revolving Credit Facility is subject to a borrowing base calculation representing 75% of the carrying amount of trade and other receivables plus 50% of the carrying amount of inventories. The total amount available was
$1,265.0 million as at July 31, 2026.
As at July 31, 2026, the Company had issued letters of credit for an amount of
$20.7 million under the Revolving Credit Facility ($20.0 million as at January 31, 2026). In addition, $4.8 million in letters of credit were outstanding under other agreements as at July 31, 2026, ($5.1 million as at
January 31, 2026).
(in millions of Canadian dollars)
July 31,
2026
January 31,
2026
Bank overdraft
$—
$—
Issued letters of credit under the Revolving Credit Facility
20.7
20.0
Other outstanding letters of credit
4.8
5.1
Term Facility
As at July 31, 2026, the cost of borrowing under the Term Loan was as follows:
Loan
Cost of Borrowing
Term Loan
B-2
◾
Term SOFR plus 2.25% per annum, with a Term SOFR floor of 0.50%
Term Loan
B-3
◾
Term SOFR plus 2.25% per annum, with a Term SOFR floor of 0.00%
Under the Term Facility, the cost of borrowing in U.S. Base Rate or U.S. Prime Rate cannot be lower than
the cost of borrowing in SOFR.
BRP Inc.
Management’s Discussion and Analysis
24
The Company is required to repay a minimum of 0.25% of the nominal amount each
quarter, less any voluntary prepayments done to date. Consequently, the Company repaid an amount of U.S. $8.7 million ($12.0 million) during the
six-month
period ended July 31, 2026 (U.S.
$7.5 million ($10.4 million) during the
six-month
period ended July 31, 2025). Also, the Company may be required to repay a portion of the Term Facility in the event that it has an excess cash
position at the end of the fiscal year and its leverage ratio is above a certain threshold level. As at July 31, 2026 and 2025, the Company was not required to repay any portion of the Term Facility under this requirement.
Austrian Term Loans
As at July 31,
2026, the Company had
€
58.8 million ($94.9 million) outstanding under its Austrian term loans bearing interest at a range between 0.93% to 3.50% and maturing between March 2027 and December
2030.
Lease Liabilities
As at
July 31, 2026, the contractual obligations in relation to assets recognized under lease agreements amounted to $663.8 million ($258.8 million as at January 31, 2026).
Normal Course Issuer Bid Program
During the
six-month
period ended July 31, 2026, the Company continued share repurchases under the NCIB that was announced and started during the fiscal year ended January 31, 2026 and repurchased for cancellation
2,258,400 subordinate voting shares, for a total consideration of $201.7 million, of which $6.4 million will be paid upon settlement.
As at July 31, 2026, a $42.3 million financial liability, with a corresponding amount in equity, was recorded in the
consolidated statements of financial position in relation to the NCIB. This liability represented the value of subordinate voting shares expected to be repurchased by a designated broker under an automatic share purchase plan. This automatic share
purchase plan allows the designated broker to purchase subordinate voting shares under
pre-set
conditions at times when the Company would ordinarily not be permitted to purchase shares due to regulatory
restrictions or self-imposed blackout periods.
Dividend
On September 2, 2026, the Company’s Board of Directors declared a quarterly dividend of $0.25 per share for holders of its
multiple and subordinate voting shares. The dividend will be paid on October 13, 2026 to shareholders of record at the close of business on September 29, 2026.
The Board of Directors has determined that this quarterly dividend is appropriate based on several relevant factors, including, without
limitation, the Company’s results of operations, current and anticipated cash requirements and surplus, financial condition, contractual restrictions and financing agreement covenants (including restrictions in the Term Facility and the
Revolving Credit Facility or other material agreements) and solvency tests imposed by corporate law.
The payment of each quarterly
dividend remains subject to the declaration of that dividend by the Board of Directors. The actual amount, the declaration date, the record date and the payment date of each quarterly dividend are subject to the discretion of the Board of Directors.
BRP Inc.
Management’s Discussion and Analysis
25
Consolidated Financial Position
The following table reflects the main variances that have occurred in the Company’s unaudited condensed consolidated interim
statements of financial position between July 31, 2026 and January 31, 2026, the impact of the fluctuation of exchange rates on such variances, the related net variance (excluding the impact of the fluctuation of exchange rates on such
variances) as well as explanations for the net variance:
(in millions of
Canadian dollars)
July 31,
2026
January 31,
2026
Variance
Exchange
Rate
Impact
Net
Variance
Explanation of Net
Variance
Trade and other receivables
$393.7
$607.2
$(213.5)
$(9.3)
$(222.8)
Mostly explained by additional factoring of trade receivables and seasonality.
Inventories
1,923.7
1,824.6
99.1
(26.4)
72.7
Mostly explained by higher raw materials and work in progress inventory.
Property, plant
and equipment
1,757.2
1,816.8
(59.6)
(7.1)
(66.7)
Mostly explained by depreciation.
Right-of-use
assets
467.5
212.2
255.3
(3.0)
252.3
The increase in
right-of-use
assets was primarily attributable to a new PA&A distribution center.
Trade payables and accruals
1,505.7
1,515.2
(9.5)
8.3
(1.2)
Variance is not material.
Provisions
1,055.1
858.1
197.0
(20.9)
176.1
Mostly explained by higher sales programs and the tariffs provision.
Long-term debt, including current portion
2,499.5
2,442.3
57.2
(81.7)
(24.5)
Mostly explained by payments of principal.
Lease liabilities
500.0
237.4
262.6
(4.7)
257.9
The increase in lease liabilities was primarily attributable to a new PA&A distribution center.
Other financial liabilities
253.1
145.3
107.8
(1.3)
106.5
Mostly explained by the automatic share purchase plan and the supplier financial restructuring liabilities.
BRP Inc.
Management’s Discussion and Analysis
26
Off-Balance
Sheet Arrangements
Dealer and Distributor Financing Arrangements
The Company, most of its independent dealers and some of its independent distributors are parties to agreements with third-party
financing service providers. These agreements provide financing to facilitate the purchase of the Company’s products and improve the Company’s working capital by allowing an earlier collection of accounts receivable from dealers and
distributors. Approximately three-quarters of the Company’s sales are made under such agreements. The parties listed above have agreements with Huntington Distribution Finance, Inc., Huntington Commercial Finance Canada Inc., Huntington
Commercial Finance LLC and Huntington Commercial Finance New Zealand Ltd (collectively, “Huntington”), to provide financing facilities in North America, Australia and New Zealand, and with Wells Fargo Commercial Distribution Finance,
Wells Fargo Bank International Unlimited Company and Wells Fargo International Finance LLC (collectively “Wells Fargo”) for financing facilities in North America. The agreement between the Company and Huntington will expire on
January 31, 2028. During the three-month period ended July 31, 2025, the Company signed a wholesale financing agreement in Europe with De Lage Landen International B.V. (“DLL”), in replacement of the Wells Fargo Bank
International Unlimited Company agreement that expired on January 31, 2026. The agreement became effective on December 12, 2025.
The total consolidated amount of financing provided to the Company’s independent dealers and distributors totalled
$2,142.0 million and $4,380.3 million for the three- and
six-month
periods ended July 31, 2026, compared to $1,603.8 million and $3,096.2 million for the three- and
six-month
periods ended July 31, 2025. The outstanding consolidated financing between the Company’s independent dealers and distributors and third-party finance companies amounted to $2,800.1 million
and $2,635.2 million as at July 31, 2026, and January 31, 2026, respectively.
The breakdown of consolidated
outstanding amounts by country and local currency between the Company’s independent dealers and distributors with third-party finance companies were as follows, as at:
(in millions)
Currency
July 31,
2026
January 31,
2026
Total outstanding
CAD
$2,800.1
$2,635.2
United States
USD
$1,356.3
$1,399.1
Canada
CAD
$594.3
$533.4
Europe
EUR
€
107.5
€
55.5
Australia and New Zealand
AUD
$131.1
$121.7
Total outstanding - continuing operations
CAD
$2,733.7
$2,564.9
Total outstanding - discontinued operations
CAD
$66.4
$70.3
The consolidated costs incurred by the Company under the dealers’ and distributors’
financing agreements totalled $32.5 million and $60.0 million for the three- and
six-month
periods ended July 31, 2026 compared to $24.6 million and $51.0 million for the three- and
six-month
periods ended July 31, 2025.
BRP Inc.
Management’s Discussion and Analysis
27
Under the dealer and distributor financing agreements, in the event of default, the
Company may be required to purchase, from the finance companies, repossessed new and unused products at the total unpaid principal balance of the dealer or distributor to the finance companies.
The combined consolidated maximum obligation is generally within a range of:
i) U.S. $25.0 million ($35.1 million) or 10% of the last twelve-month average amount of consolidated financing outstanding
under the financing agreements ($261.2 million as at July 31, 2026) and;
ii) Euro
€
10.0 million ($16.2 million) or 10% of the calendar year twelve-month average amount of consolidate financing outstanding under the financing agreements (not applicable as at July 31,
2026).
As such, the maximum consolidated amount subject to the Company’s obligation to purchase repossessed new and unused
products from the finance companies was $278.9 million as at July 31, 2026 and $284.4 million as at January 31, 2026. This includes a remaining obligation of $1.5 million from financing agreements with Wells Fargo.
For the six-month period ended July 31, 2026, the Company incurred a loss of $0.1 million related to new and unused products
repossessed by the finance companies ($0.5 million loss for the six-month period ended July 31, 2025).
Consumer Financing Arrangements
The Company has contractual relationships with third-party financing companies in order to facilitate consumer credit for the purchase of
its products in North America. The agreements generally allow the Company to offer a subsidized interest rate to consumers for a certain limited period under certain sales programs. Under these contracts, the Company’s financial obligations
are related to the commitments made under certain sales programs.
BRP Inc.
Management’s Discussion and Analysis
28
Transaction Between Related Parties
Transactions with Bombardier Inc., a Company Related to Beaudier Group
Pursuant to the purchase agreement entered into in 2003 in connection with the acquisition of the recreational product business of
Bombardier Inc., the Company committed to reimburse to Bombardier Inc. income taxes amounting to $22.6 million as at July 31, 2026 and $22.4 million as at January 31, 2026, respectively. The payments will begin when Bombardier
Inc. starts making income tax payments in Canada and/or in the United States. The Company does not expect to make any payments to Bombardier Inc. in relation to that obligation for Fiscal 2027.
Financial Instruments
The Company’s
financial instruments, divided into financial assets and financial liabilities, are measured at the end of each period at fair value or amortized costs using the effective interest method depending on their classification determined by IFRS. By
nature, financial assets are exposed to credit risk whereas financial liabilities are exposed to liquidity risk. Additionally, the Company’s financial instruments and transactions could be denominated in foreign currency creating a foreign
exchange exposure that could be mitigated by the use of derivative financial instruments. The Company is to a lesser extent exposed to interest risk associated to its Revolving Credit Facility, Term Facility and Austrian term loans.
Foreign Exchange Risk
The elements
presented in the Company’s unaudited condensed consolidated interim financial statements in Canadian dollars are significantly exposed to the fluctuation of exchange rates, mainly the Canadian dollar/U.S. dollar rate and the Canadian
dollar/euro rate.
The Company’s cash inflows and outflows are mainly comprised of Canadian dollars, U.S. dollars and euros.
The Company intends to maintain, as a result of its business transactions, a certain offset position on U.S. dollar and euro denominated cash inflows and outflows.
For some currencies over which the Company cannot achieve an offset through its recurring business transactions, the Company uses
foreign exchange contracts according to the Company’s hedging strategy. Management periodically reviews the relevant hedging position and may hedge at any level within the authorized parameters of the policy, up to the maximum percentage
allowed. Those contracts are accounted for under the cash flow hedge model covering highly probable forecasted sales in these currencies, and the gains or losses on those derivatives are recorded in net income only when the forecasted sales
occur.
Finally, the Company reduces the exposure on its net income arising from the revaluation at
period-end
of monetary items denominated in a different functional currency by using foreign exchange contracts. Those contracts are recorded in net income at each period end in order to mitigate the gains or losses
resulting from the revaluation at spot rate of these foreign-denominated positions.
While the Company’s operating income is
protected, to a certain extent, from significant fluctuations of foreign exchange rates resulting from the application of the Company’s hedging strategy, the net income is significantly exposed to Canadian dollar/U.S. dollar rate fluctuations
due to the U.S. dollar-denominated long-term debt. However, there is a monetary impact for the Company only to the extent the Term Facility is repaid.
BRP Inc.
Management’s Discussion and Analysis
29
Liquidity Risk
The Company is exposed to the risk of encountering difficulty in meeting obligations related to its financial liabilities. In order to
manage its liquidity risk accurately, the Company continuously monitors its operating cash requirements taking into account the seasonality of the Company’s working capital needs, revenues and expenses. The Company believes the cash flows
generated from operations combined with its cash on hand and the availability of funds under its credit facility ensures its financial flexibility and mitigates its liquidity risk.
Credit Risk
The Company could be
exposed, in the normal course of business, to the potential inability of dealers, distributors and other business partners to meet their contractual obligations on financial assets and on amounts guaranteed under dealer and distributor financing
arrangements with Huntington, Wells Fargo and DLL.
The Company considers that its credit risk associated with its trade receivables
and its limited responsibilities under the dealer and distributor financing agreements with Huntington, Wells Fargo and DLL does not represent a significant concentration of risk and loss due to the large number of dealers, distributors and other
business partners and their dispersion across many geographic areas. Moreover, the Company mitigates such risk by doing business through its own distribution channels and by monitoring the creditworthiness of the dealers and distributors in the
different geographic areas.
Interest Rate Risk
The Company is exposed to the variation of interest rates mainly resulting from the Term SOFR on its Term Facility. However, the Company
entered into interest rate cap contracts, which limit its exposure to interest rate increase.
BRP Inc.
Management’s Discussion and Analysis
30
Non-IFRS
Measures and Reconciliation Tables
The Company uses
non-IFRS
measures and ratio, including the following:
Non-IFRS
measures
Definition
Reason for use
Normalized
EBITDA
Net
income before financing costs, financing income, income tax expense (recovery), depreciation expense and normalized elements
Assist investors in determining the financial performance of the Company’s operating activities on a consistent basis by
excluding certain
non-cash
elements such as depreciation expense, impairment charge, foreign exchange gain or loss on the Company’s long-term debt denominated in U.S. dollars and foreign exchange gain or
loss on certain of the Company’s lease liabilities. Other elements, such as restructuring and wind-down costs,
non-recurring
gain or loss and acquisition-related costs, may be excluded from net income in
the determination of Normalized EBITDA as they are considered not being reflective of the operational performance of the Company
Normalized net
income
Net
income before normalized elements adjusted to reflect the tax effect on these elements
In addition to the financial performance of operating activities, these measures consider the impact of investing activities,
financing activities and income taxes on the Company’s financial results
Normalized
income tax expense
Income
tax expense adjusted to reflect the tax effect on normalized elements and to normalize specific tax elements
Assist investors in determining the tax
expense relating to the normalized items explained above, as they are considered not being reflective of the operational performance of the Company
Normalized
effective tax rate
Based on
Normalized net income before Normalized income tax expense
Assist investors in determining the
effective tax rate including the normalized items explained above, as they are considered not being reflective of the operational performance of the Company
Normalized
earnings per share – diluted
Calculated by dividing the Normalized net income by the weighted average number of shares – diluted
Assist investors in determining the
normalized financial performance of the Company’s activities on a per share basis
Free cash flow
Cash
flows from operating activities less additions to PP&E and intangible assets
Assist investors in assessing the Company’s liquidity generation abilities that could be available for shareholders, debt
repayment and business combination, after capital expenditure
The Company believes
non-IFRS
measures are important
supplemental measures of financial performance because they eliminate items that have less bearing on the Company’s financial performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on
IFRS measures. The Company also believes that securities analysts, investors and other interested parties frequently use
non-IFRS
measures in the evaluation of companies, many of which present similar metrics
when reporting their results. Management also uses
non-IFRS
measures in order to facilitate financial performance comparisons from period to period, prepare annual operating budgets, assess the Company’s
ability to meet its future debt service, capital expenditure and working capital requirements and also as a component in the determination of the short-term incentive compensation for the Company’s employees. Because other companies may
calculate these
non-IFRS
measures differently than the Company does, these metrics are not comparable to similarly titled measures reported by other companies.
BRP Inc.
Management’s Discussion and Analysis
31
Reconciliation Tables
[2]
The following table presents the reconciliation of Net income to Normalized net income
[1]
and Normalized EBITDA
[1]
.
Three-month periods ended
Six-month periods ended
(in millions of Canadian dollars)
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Net (loss) income
$(136.8)
$57.1
$(9.5)
$218.1
Normalized elements
Foreign exchange loss (gain) on long-term debt and lease liabilities
73.7
7.0
82.7
(121.6)
Costs related to business combinations
[3]
1.0
3.3
2.1
6.4
Special long-term incentive program
[4]
—
4.4
—
4.4
Executive management transition cost
[5]
—
2.5
—
2.5
Supplier financial restructuring
[6]
74.8
—
74.8
—
Other elements
[7]
—
1.0
—
1.9
Income tax adjustment
[1] [8]
(25.7)
(8.4)
(28.6)
(10.2)
Normalized net income (loss)
[1]
(13.0)
66.9
121.5
101.5
Normalized income tax expense (recovery)
[1]
(5.3)
(12.4)
45.1
3.4
Financing costs adjusted
[1]
50.3
50.5
94.9
97.1
Financing income
(5.4)
(3.3)
(8.5)
(4.6)
Depreciation expense adjusted
[1]
112.2
111.5
220.2
216.6
Normalized EBITDA
[1]
$138.8
$213.2
$473.2
$414.0
[1]
See
“Non-IFRS
Measures” section.
[2]
Figures are on a continuing basis.
[3]
Transaction costs and depreciation of intangible assets related to business combinations.
[4]
Incremental fair value recorded as a result of a special long-term incentive program.
[5]
Includes the impact of accelerated vesting of executive management stock options.
[6]
Includes the costs associated to a supplier financial restructuring.
[7]
Other elements include transaction costs associated with the sale of the Marine businesses and restructuring costs.
[8]
Income tax adjustment is related to the income tax on Normalized elements subject to tax and for which income tax has
been recognized and to the adjustment related to the impact of foreign currency translation from Mexican operations.
BRP Inc.
Management’s Discussion and Analysis
32
The following table presents the reconciliation of consolidated net cash flows
generated from operating activities to consolidated free cash flow
[1]
.
(millions of Canadian dollars)
Six-month periods ended
July 31,
2026
July 31,
2025
Net cash flows generated from operating activities
$686.8
$373.1
Additions to property, plant and equipment
(105.5)
(115.5)
Additions to intangible assets
(21.9)
(18.4)
Free cash flow
[1]
$559.4
$239.2
Free cash flow from continuing operations
[1]
$560.4
$301.9
Free cash flow used in discontinued operations
[1]
$(1.0)
$(62.7)
[1]
See
“Non-IFRS
Measures”
section.
BRP Inc.
Management’s Discussion and Analysis
33
The following table
[2]
presents
the reconciliation of items as included in the Normalized net income
[1]
and Normalized EBITDA
[1]
compared to respective IFRS measures as well
as the Normalized EPS – basic and diluted
[1]
calculation.
(millions of Canadian dollars, except per share data)
Three-month periods ended
Six-month periods ended
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Depreciation expense reconciliation
Depreciation expense
$112.9
$113.0
$221.6
$219.5
Depreciation of intangible assets related to business combinations
(0.7)
(1.5)
(1.4)
(2.9)
Depreciation expense
adjusted
[1]
$112.2
$111.5
$220.2
$216.6
Income tax expense reconciliation
Income tax expense (recovery)
$(31.0)
$(20.8)
$16.5
$(6.8)
Income tax adjustment
[3]
25.7
8.4
28.6
10.2
Normalized income tax
expense (recovery)
[1]
$(5.3)
$(12.4)
$45.1
$3.4
Financing costs reconciliation
Financing costs
$50.6
$50.5
$95.6
$97.1
Other
(0.3)
—
(0.7)
—
Financing costs adjusted
[1]
$50.3
$50.5
$94.9
$97.1
Normalized basic EPS
[1]
calculation
Normalized net income (loss)
[1]
$(13.0)
$66.9
$121.5
$101.5
Non-controlling
interests
0.2
0.8
0.8
0.9
Weighted average number of shares - basic
72,756,365
73,040,187
72,950,539
73,036,072
Normalized basic EPS
[1]
$(0.18)
$0.93
$1.68
$1.40
Normalized diluted EPS
[1]
calculation
Normalized net income (loss)
[1]
$(13.0)
$66.9
$121.5
$101.5
Non-controlling
interests
0.2
0.8
0.8
0.9
Weighted average number of shares - diluted
[4]
72,756,365
73,616,757
73,529,444
73,569,234
Normalized diluted EPS
[1]
$(0.18)
$0.92
$1.66
$1.39
[1]
See
“Non-IFRS
Measures” section.
[2]
Figures are on a continuing basis.
[3]
Income tax adjustment is related to the income tax on Normalized elements subject to tax and for which income tax has
been recognized and to the adjustment related to the impact of foreign currency translation from Mexican operations.
[4]
The weighted average number of diluted shares outstanding used in calculating Normalized diluted EPS
[1]
for the
six-month
period ended July 31, 2026 was 73,529,444. The difference in the weighted average number of diluted shares outstanding used in
calculating diluted EPS is explained by a reported net loss under IFRS Measures for the same period.
BRP Inc.
Management’s Discussion and Analysis
34
Summary of Consolidated Quarterly Results
[2]
Three-month periods ended
July
April
January
October
July
April
January
October
31,
30,
31,
31,
31,
30,
31,
31,
2026
2026
2026
2025
2025
2025
2025
2024
Fiscal
2027
Fiscal
2027
Fiscal
2026
Fiscal
2026
Fiscal
2026
Fiscal
2026
Fiscal
2025
Fiscal
2025
(millions of Canadian dollars,
except per share and gross profit
data)
Revenues
Year-Round Products
$1,485.1
$1,448.7
$1,317.2
$1,265.6
$1,113.8
$1,105.8
$1,128.0
$1,036.4
Seasonal Products
427.7
568.4
796.4
606.2
469.7
419.2
677.5
616.0
PA&A, OEM Engines and Others
324.0
374.7
343.7
378.5
304.7
321.9
312.8
321.1
Total revenues
2,236.8
2,391.8
2,457.3
2,250.3
1,888.2
1,846.9
2,118.3
1,973.5
Gross profit
262.5
561.6
553.6
541.2
397.7
394.8
421.8
435.1
As a percentage of revenues
11.7%
23.5%
22.5%
24.1%
21.1%
21.4%
19.9%
22.0%
Net (loss) income
(136.8
)
127.3
45.8
76.5
57.1
161.0
(50.5
)
30.6
Normalized EBITDA
[1]
138.8
334.4
363.8
325.6
213.2
200.8
247.0
268.5
Normalized net (loss) income
[1]
(13.0
)
134.5
163.3
117.7
66.9
34.6
76.8
88.5
Basic EPS
(1.88
)
1.75
0.64
1.05
0.79
2.21
(0.69
)
0.42
Diluted EPS
(1.88
)
1.73
0.63
1.04
0.79
2.19
(0.68
)
0.42
Normalized basic EPS
[1]
(0.18
)
1.85
2.24
1.61
0.93
0.48
1.06
1.22
Normalized diluted EPS
[1]
(0.18
)
1.83
2.21
1.59
0.92
0.47
1.05
1.20
[1]
See
“Non-IFRS
Measures” section.
[2]
Unless otherwise indicated, figures are on a continuing basis and prior periods are reclassified accordingly.
BRP Inc.
Management’s Discussion and Analysis
35
Reconciliation Table for Consolidated Quarterly Results
[2]
Three-month periods ended
July
April
January
October
July
April
January
October
31,
30,
31,
31,
31,
30,
31,
31,
2026
2026
2026
2025
2025
2025
2025
2024
(millions of Canadian dollars)
Fiscal
2027
Fiscal
2027
Fiscal
2026
Fiscal
2026
Fiscal
2026
Fiscal
2026
Fiscal
2025
Fiscal
2025
Net (loss) income
$(136.8)
$127.3
$45.8
$76.5
$57.1
$161.0
$
(50.5)
$30.6
Normalized elements
Foreign exchange (gain) loss on long-term debt and lease liabilities
73.7
9.0
(80.0
)
31.8
7.0
(128.6
)
103.4
26.2
Cybersecurity incident
[3]
—
—
—
—
—
—
(12.5
)
—
Impairment and other charges
[4]
—
—
232.5
—
—
—
—
9.4
Costs related to business combinations (reversal)
[5]
1.0
1.1
1.5
3.1
3.3
3.1
(7.9
)
3.6
Exit costs
[6]
—
—
—
—
—
—
15.1
—
Restructuring and related costs (reversal)
[7]
—
—
(0.5
)
(0.5
)
—
—
41.8
11.9
Transaction costs on long-term debt
[8]
—
—
—
12.6
—
—
—
—
Special long-term incentive program
[9]
—
—
—
—
4.4
—
—
—
Executive management transition cost
[10]
—
—
2.5
2.5
2.5
—
—
—
Supplier financial restructuring
[11]
74.8
—
—
—
—
—
—
—
Other elements
[12]
—
—
2.0
0.9
1.0
0.9
1.2
—
Income tax adjustment
[1][13]
(25.7
)
(2.9
)
(40.5
)
(9.2
)
(8.4
)
(1.8
)
(13.8
)
6.8
Normalized net (loss) income
[1]
(13.0
)
134.5
163.3
117.7
66.9
34.6
76.8
88.5
Normalized income tax expense
[1]
(5.3
)
50.4
41.9
39.7
(12.4
)
15.8
19.5
26.3
Financing costs adjusted
[1]
50.3
44.6
46.5
55.0
50.5
46.6
48.4
51.1
Financing income adjusted
[1]
(5.4
)
(3.1
)
(3.2
)
(3.2
)
(3.3
)
(1.3
)
(0.9
)
(1.3
)
Depreciation expense adjusted
[1]
112.2
108.0
115.3
116.4
111.5
105.1
103.2
103.9
Normalized EBITDA
[1]
$138.8
$334.4
$363.8
$325.6
$213.2
$200.8
$247.0
$268.5
[1]
See
“Non-IFRS
Measures” section.
[2]
Unless otherwise indicated, figures are on a continuing basis and prior periods are reclassified accordingly.
[3]
During Fiscal 2025, the Company received insurance payments in relation to the cybersecurity incident that occurred in
Fiscal 2023.
[4]
During Fiscal 2026, the Company recognized impairment charges related to the EV assets and light mobility CGU,
increased provisions related to EV products, as well as reversed the
non-controlling
interest liability. During Fiscal 2025, the Company recognized an impairment charge on unutilized assets.
[5]
Transaction costs and depreciation of intangible assets related to business combinations.
[6]
The Company impaired service parts inventory related to its Evinrude outboard engine business.
[7]
The Company recorded restructuring costs, which includes severance packages to employees as part of workforce
reduction, contract exit costs and supplier claims related to restructuring activities.
[8]
Derecognition of unamortized transaction costs and incremental transaction costs related to the amendment of the
Company’s Term Facility.
[9]
Incremental fair value recorded as a result of a special long-term incentive program.
[10]
Includes the impact of accelerated vesting of executive management stock options.
[11]
Includes the costs associated with a supplier financial restructuring.
[12]
Other elements include transaction costs associated with the sale of the Marine businesses and fees associated with the
secondary offerings that occurred during Fiscal 2025 and 2026.
[13]
Income tax adjustment is related to the income tax on Normalized elements subject to tax and for which income tax has
been recognized, to the adjustment related to the impact of foreign currency translation from Mexican operations, and to the deferred income tax on operating losses recorded as part of the impairment in Fiscal 2026.
BRP Inc.
Management’s Discussion and Analysis
36
Selected Consolidated Financial Information
The selected consolidated financial information set out below for the three- and
six-month
periods ended July 31, 2026 and 2025, has been determined based on the unaudited condensed consolidated interim financial statements and related notes approved on September 2, 2026.
Net Income Data
[2]
(in millions of Canadian dollars)
Three-month periods
ended
Six-month periods
ended
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Revenues
Year-Round Products
$1,485.1
$1,113.8
$2,933.8
$2,219.6
Seasonal Products
427.7
469.7
996.1
888.9
PA&A, OEM Engines and Others
324.0
304.7
698.7
626.6
Total revenues
2,236.8
1,888.2
4,628.6
3,735.1
Cost of sales
1,974.3
1,490.5
3,804.5
2,942.6
Gross profit
262.5
397.7
824.1
792.5
As a percentage of revenues
11.7%
21.1%
17.8%
21.2%
Operating expenses
Selling and marketing
116.7
112.4
247.1
219.8
Research and development
108.7
96.4
227.5
201.4
General and administrative
89.3
96.5
177.4
174.3
Other operating (income) expenses
(2.2
)
2.0
(3.4
)
12.7
Total operating expenses
312.5
307.3
648.6
608.2
Operating income (loss)
(50.0
)
90.4
175.5
184.3
Net financing costs
45.2
47.2
87.1
92.5
Foreign exchange loss (gain) on long-term debt
72.6
6.9
81.4
(119.5
)
Income (loss) before income taxes
(167.8
)
36.3
7.0
211.3
Income tax expense (recovery)
(31.0
)
(20.8
)
16.5
(6.8
)
Net (loss) income from continuing
operations
$(136.8
)
$57.1
$(9.5
)
$218.1
Net income (loss) from discontinued
operations
$2.7
$(33.6
)
$4.3
$(44.5
)
Net (loss) income
$(134.1
)
$23.5
$(5.2
)
$173.6
Attributable to shareholders
$(133.9
)
$24.3
$(4.4
)
$174.5
Attributable to
non-controlling
interest
$(0.2
)
$(0.8
)
$(0.8
)
$(0.9
)
Normalized EBITDA
[1]
$138.8
$213.2
$473.2
$414.0
Normalized net income (loss)
[1]
$(13.0
)
$66.9
$121.5
$101.5
[1]
See
“Non-IFRS
Measures”
section.
[2]
Figures are on a continuing basis.
BRP Inc.
Management’s Discussion and Analysis
37
Other Financial Data
[3]
(in millions of Canadian dollars, except per share data)
Three-month periods ended
Six-month periods ended
July 31,
2026
July 31,
2025
July 31,
2026
July 31,
2025
Weighted average number of shares – basic
72,756,365
73,040,187
72,950,539
73,036,072
Weighted average number of shares – diluted
[1]
72,756,365
73,616,757
72,950,539
73,569,234
Basic EPS
$(1.88
)
$0.79
$(0.12
)
$3.00
Diluted EPS
(1.88
)
0.79
(0.12
)
2.98
Normalized basic EPS
[2]
(0.18
)
0.93
1.68
1.40
Normalized diluted EPS
[1] [2]
(0.18
)
0.92
1.66
1.39
Declared dividends per share
$0.25
$0.215
$0.50
$0.43
[1]
The weighted average number of diluted shares outstanding used in calculating Normalized diluted EPS
[2]
for the
six-month
period ended July 31, 2026 was 73,529,444. The difference in the weighted average number of diluted shares outstanding used in
calculating diluted EPS is explained by a reported net loss under IFRS Measures for the same period.
[2]
See
“Non-IFRS
Measures” section.
[3]
Figures are on a continuing basis.
Financial Position Data
As at
(
in millions of Canadian dollars
)
July 31,
2026
January 31,
2026
Cash and cash equivalents
$647.8
$427.1
Working capital
441.8
600.3
Property, plant and equipment
1,757.2
1,816.8
Total assets
[1]
6,505.3
6,196.7
Total
non-current
financial liabilities
2,969.7
2,647.3
Total liabilities
[2]
6,270.6
5,685.3
Total equity
335.2
610.7
Long-term debt
2,499.5
2,442.3
[1]
Excludes the assets classified as held for sale as at July 31, 2026, and
January 31, 2026.
[2]
Excludes the liability associated to assets classified as held for sale as at
July 31, 2026 and January 31, 2026.
BRP Inc.
Management’s Discussion and Analysis
38
Critical Accounting Estimates
Significant Estimates and Judgments
The preparation of the unaudited condensed consolidated interim financial statements in accordance with the Company’s accounting
policies requires management to make estimates and judgments that can affect the reported amounts of assets and liabilities, related amounts of revenues and expenses, other comprehensive income and disclosures made.
The Company’s best estimates are based on the information, facts and circumstances available at the time estimates are made.
Management uses historical experience and information, general economic conditions and trends, as well as assumptions regarding probable future outcomes as the basis for determining estimates. Estimates and their underlying assumptions are reviewed
periodically and the effects of any changes are recognized immediately. Actual results could differ from the estimates used and such differences could be significant.
The Company’s annual operating budget and operating budget revisions performed during the year (collectively “Budget”)
and the Company’s strategic plan comprise fundamental information used as a basis for some significant estimates necessary to prepare the condensed consolidated interim financial statements. Management prepares the annual operating budget and
strategic plan each year using a process whereby a detailed
one-year
budget and three-year strategic plan are prepared by each entity and then consolidated.
Cash flows and profitability included in the Budget are based on the existing and future expected sales orders, general market
conditions, current cost structures, anticipated cost variations and current agreements with third parties. Management uses the annual operating budget information as well as additional projections or assumptions to derive the expected results for
the strategic plan and periods thereafter.
The Budget and the strategic plan are approved by management and the Board of Directors.
Management then tracks performance compared to the Budget. Significant variances in actual performance are a key trigger to assess whether certain estimates used in the preparation of financial information must be revised.
Management needs to rely on estimates in order to apply the Company’s accounting policies and considers that the most critical
ones are the following:
Estimating the net realizable value of inventory
The net realizable value of materials and work in progress is determined by comparing inventory components and value with production
needs, current and future product features, expected production costs to be incurred and the expected profitability of finished products. The net realizable value of finished products and parts, accessories and apparel is determined by comparing
inventory components and value with expected sales prices, sales programs and new product features.
Estimating Recoverability of Deferred Tax Assets
Deferred tax assets are recognized only if management believes it is probable that they will be realized based on the annual budget,
strategic plan and additional projections to derive the expected results for the periods thereafter.
Estimating Provisions for Regular Product Warranty, Product
Liability and Sales Program
The regular warranty cost is established by product line and recorded at the time of sale based on
management’s best estimate, using historical cost rates and trends. Adjustments to the regular warranty provision are made when the Company identifies a significant and recurring issue on products sold or when costs and trend differences are
identified in the analysis of warranty claims.
BRP Inc.
Management’s Discussion and Analysis
39
The product liability provision at period end is based on management’s best
estimate of the amounts necessary to resolve existing claims. In addition, the product liability provision at the end of the reporting period includes incurred, but not reported claims, based on average historical cost information.
Sales program provision is estimated based on current program features, historical data and expected retail sales for each product line.
Estimating the Discount Rates Used in Assessing Defined Benefit Plan Expenses and Liability
In order to select the discount rates used to determine defined benefit plan expenses and liabilities, management consults with external
actuarial firms to provide commonly used and applicable discount rates that are based on the yield of high quality corporate fixed income investments with cash flows that match expected benefit payments for each defined benefit plan. Management uses
its knowledge and comprehension of general economic factors in order to conclude on the accuracy of the discount rates used.
Significant Judgments in
Applying the Company’s Accounting Policies
Management needs to make certain judgments in order to apply the
Company’s accounting policies and the most significant ones are the following:
Recoverability and impairment of property, plant and equipment, intangible
assets and
right-of-use
assets
The Company
operates using a high level of integration and interdependency between design, development, manufacturing and distribution operations. The cash inflows generated by each product line require the use of various assets of the Company, limiting the
impairment testing to be done for a single asset. Therefore, management performs impairment testing by grouping assets into CGUs.
Functional Currency
The Company operates worldwide, but its design, development, manufacturing and distribution operations are highly integrated, which
require significant judgments from management in order to determine the functional currency of each entity using factors provided by
IAS
21 The Effects of Changes in Foreign Exchange Rates
(“IAS 21”). Management
established the functional currency of each entity as its local currency unless the assessment of the criteria established by IAS 21 to assess the functional currency leads to the determination of another currency. IAS 21 criteria are reviewed
annually for each entity.
BRP Inc.
Management’s Discussion and Analysis
40
Controls and Procedures
The Company’s President and Chief Executive Officer and the Chief Financial Officer are responsible for establishing and
maintaining the Company’s disclosure controls and procedures as well as its internal control over financial reporting, as those terms are defined in National Instrument
52-109
–
Certification of
Disclosure in Issuers
’
Annual and Interim Filings
of the Canadian securities regulatory authorities and Rule
13a-15(e)
and Rule
15d-15(e)
under
the U.S. Securities
Exchange Act of 1934
, as amended.
Disclosure controls and procedures
As at the end of the reporting period covered by the unaudited condensed consolidated interim financial statements, the President and
Chief Executive Officer and the Chief Financial Officer have designed, or caused to be designed under their supervision, disclosure controls and procedures in order to provide reasonable assurance that:
●
material information relating to the Company has been made known to them; and
●
information required to be disclosed in the Company’s filings is recorded, processed, summarized and
reported within the time periods specified in securities legislation.
Internal control over financial reporting
As at the end of the reporting period covered by the interim financial statements, the President and Chief Executive Officer and the
Chief Financial Officer have designed, or caused to be designed under their supervision, such internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with IFRS.
There have been no changes in the Company’s internal control over
financial reporting during the
six-month
period ended July 31, 2026, that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial
reporting. Management determined that the Company’s internal control over financial reporting was effective as of July 31, 2026.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Management’s
projections of any evaluation of the effectiveness of internal control over financial reporting as to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with
the policies or procedures may deteriorate. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the
Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
BRP Inc.
Management’s Discussion and Analysis
41
Risk Factors
For a detailed description of risk factors associated with the Company, refer to the “Risk Factors” section of the
Company’s MD&A for the fourth quarter and the fiscal year ended January 31, 2026. The Company is not aware of any significant changes to the Company’s risk factors from those disclosed at that time.
BRP Inc.
Management’s Discussion and Analysis
42
Disclosure of Outstanding Shares
As at September 1, 2026, the Company had:
Issued and outstanding shares and stock options
Multiple voting shares with no par value
34,819,204
Subordinate voting shares with no par value
36,331,098
Stock options to acquire subordinate voting
shares
2,825,749
Additional Information
Additional information relating to BRP Inc., including the Company’s AIF, is available on SEDAR+ at
www.sedarplus.ca
.
BRP Inc.
Management’s Discussion and Analysis
43

----- d117601dex993.htm -----
EX-99.3
4
d117601dex993.htm
EX-99.3
EX-99.3
Exhibit 99.3
FORM
52-109F2
CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE
I, Denis Le Vot, President and Chief Executive Officer of BRP Inc., certify the following:
1. Review
: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of BRP Inc.
(the “issuer”) for the interim period ended July 31, 2026.
2. No misrepresentations
: Based on my knowledge, having
exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances
under which it was made, with respect to the period covered by the interim filings.
3. Fair presentation
: Based on my knowledge,
having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows
of the issuer, as of the date of and for the periods presented in the interim filings.
4. Responsibility
: The issuer’s other
certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in Regulation
52-109
respecting Certification of Disclosure in Issuers’ Annual and Interim Filings (c.
V-1.1,
r. 27), for the issuer.
5. Design
: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I
have, as at the end of the period covered by the interim filings
(a) designed DC&P, or caused it to be designed under
our supervision, to provide reasonable assurance that
(i) material information relating to the issuer is made known to us
by others, particularly during the period in which the interim filings are being prepared; and
(ii) information required
to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation;
and
(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
5.1 Control framework
: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR
is
Internal Control – Integrated Framework (2013 COSO Framework)
published by
The Committee of Sponsoring Organizations of the Treadway Commission
.
5.2
N/A
5.3
N/A
6. Reporting changes in ICFR
: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred
during the period beginning on May 1, 2026 and ended on July 31, 2026 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
Date: September 3, 2026
(s) Denis Le Vot
Denis Le Vot
President and Chief Executive Officer
M.0.
2008-16,
Sch.
52-109F1;
M.0.
2010-17,
s. 5.

----- d117601dex994.htm -----
EX-99.4
5
d117601dex994.htm
EX-99.4
EX-99.4
Exhibit 99.4
FORM
52-109F2
CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE
I, Sébastien Martel, Chief Financial Officer of BRP Inc., certify the following:
1. Review
: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of BRP Inc.
(the “issuer”) for the interim period ended July 31, 2026.
2. No misrepresentations
: Based on my knowledge, having
exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances
under which it was made, with respect to the period covered by the interim filings.
3. Fair presentation
: Based on my knowledge,
having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows
of the issuer, as of the date of and for the periods presented in the interim filings.
4. Responsibility
: The issuer’s other
certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in Regulation
52-109
respecting Certification of Disclosure in Issuers’ Annual and Interim Filings (c.
V-1.1,
r. 27), for the issuer.
5. Design
: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I
have, as at the end of the period covered by the interim filings
(a) designed DC&P, or caused it to be designed under
our supervision, to provide reasonable assurance that
(i) material information relating to the issuer is made known to us
by others, particularly during the period in which the interim filings are being prepared; and
(ii) information required
to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation;
and
(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
5.1 Control framework
: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR
is
Internal Control – Integrated Framework (2013 COSO Framework)
published by
The Committee of Sponsoring Organizations of the Treadway Commission
.
5.2
N/A
5.3
N/A
6. Reporting changes in ICFR
: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during
the period beginning on May 1, 2026 and ended on July 31, 2026 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
Date: September 3, 2026
(s) Sébastien Martel
Sébastien Martel
Chief Financial Officer
M.0.
2008-16,
Sch.
52-109F1;
M.0.
2010-17,
s. 5.