Embraer (EMBR3) Q2 2025 earnings summary

Executive summary

• Achieved record second quarter revenue of $1.8 billion, up 22% year-over-year, the highest in company history, with a 40% increase in backlog to $29.7 billion, driven by strong demand across all business units.

• Delivered 61 aircraft in Q2, a 30% increase year-over-year, with Executive Aviation deliveries up 41%.

• Book-to-bill ratio close to 2:1 over the last 12 months, reflecting robust order activity and operational efficiency.

• Major commercial wins include SAS ordering 45 E195-E2s and SkyWest ordering 60 E175s.

• Portugal and Lithuania expanded KC-390 orders, reinforcing defense segment momentum in Europe.

Financial highlights

• Adjusted EBITDA was $246 million (13.5% margin), up from $190 million (12.7%) year-over-year.

• Adjusted EBIT margin reached 10.5%, the best for a second quarter in a decade.

• Executive aviation revenue surged 64% year-over-year, with adjusted EBIT margin rising to 14.5%.

• Defense and security revenue increased 18% year-over-year, with EBIT margin improving to 9.2%.

• Adjusted net income was $(4.7) million, down from $80.4 million in 2Q24, mainly due to extraordinary deferred tax and Eve's results.

Outlook and guidance

• 2025 guidance reaffirmed: revenue $7.0–$7.5 billion, adjusted EBIT margin 7.5–8.3%, and adjusted free cash flow $200 million or higher.

• Expected deliveries: 77–85 commercial aircraft and 145–155 executive jets for the year.

• Tariff impacts (10%) are fully incorporated into current forecasts; potential upside if tariffs are removed.

• Management remains cautious due to inflation, FX volatility, and tariff uncertainties, but sees guidance as safe.

• Guidance and projections subject to risks including economic, political, and trade conditions, investment plans, product development timelines, and regulatory changes.