Embraer (EMBR3) Q1 2025 earnings summary

Executive summary

• Achieved record first-quarter revenue of $1.1 billion, the highest since 2016, and a record $26.4 billion backlog, with the highest Q1 adjusted EBITDA margin in five years.

• Aircraft deliveries increased by up to 30% year-over-year, reflecting operational efficiency improvements and production leveling initiatives.

• Defense & Security and Executive Aviation segments saw strong growth, with notable contracts in Sweden, Slovakia, Uruguay, and Panama.

• Resumed regular dividend and interest on equity payments to shareholders, with R$51.4 million declared for FY24.

• 2025 guidance reaffirmed, targeting double-digit growth in deliveries and revenue, with limited impact from U.S. tariffs.

Financial highlights

• Revenue rose 23% year-over-year to $1.1 billion, with Service & Support and Executive Aviation contributing nearly 70%.

• Adjusted EBITDA was $109 million (9.8% margin); adjusted EBIT was $62 million (5.6% margin), both significantly improved year-over-year.

• Adjusted net result was negative $74 million (-6.7% margin), but reported net income was positive $73 million (6.7% margin) due to deferred taxes and Eve results.

• Consumed $386 million in adjusted free cash flow, mainly due to inventory buildup for future deliveries.

• Earnings per ADS increased to $0.40 from $0.16 year-over-year.

Outlook and guidance

• 2025 guidance targets double-digit growth in deliveries and revenue, with total revenues forecasted at $7.0–$7.5 billion and adjusted EBIT margin of 7.5%–8.3%.

• Adjusted free cash flow expected at $200 million or higher.

• Aircraft delivery guidance: 77–85 commercial jets and 145–155 executive jets for the year.

• Production leveling initiatives are expected to yield more stable output from 2026 onward.

• U.S. tariffs expected to have limited impact; initial estimate is a 90 basis point negative effect on EBIT margin for 2025, with mitigation measures underway.