Embraer (EMBR3) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues increased 32% year-over-year, driven by Executive Aviation and Defense & Security, with a record $22.7 billion backlog, the highest in nine years.

• Adjusted EBIT margin rose to 17.6% in Q3, aided by a $150 million Boeing arbitration gain; adjusted net income reached $221 million.

• 59 aircraft delivered in Q3, up 37% year-over-year, with Executive Aviation deliveries up 46%.

• Credit rating upgraded to BBB- by Fitch and S&P, with Moody's outlook positive.

• 2024 revenue guidance midpoint reiterated at $6.2 billion, with adjusted EBIT margin guidance raised to 9.5%–10% and free cash flow target increased to $300 million or higher.

Financial highlights

• Q3 revenues nearly $1.7 billion, up 32% year-over-year; nine-month revenues at $4.1 billion, up 24% year-over-year.

• Adjusted EBITDA for Q3 at $357 million (21.1% margin); adjusted EBIT at $298 million (17.6% margin), including Boeing gain.

• Adjusted net income for Q3 was $221 million (13.1% margin); adjusted free cash flow at $241 million.

• Cash position increased to $1.77 billion, with net debt (ex-Eve) reduced to $1.09 billion.

• Net debt to EBITDA leverage ratio declined to 1.0x in Q3 2024.

Outlook and guidance

• 2024 revenue guidance maintained at $6.0–$6.4 billion; adjusted EBIT margin guidance raised to 9–10% (from 6.5–7.5%).

• Free cash flow guidance increased to $300 million or higher for 2024.

• Commercial Aviation delivery guidance reduced to 70–73 aircraft for 2024; Executive Aviation guidance reiterated at 125–135.

• Double-digit growth in deliveries, revenue, and EBIT expected for 2025 and beyond.