By Tom Batchelor
Nov. 04, 2025, © Leeham News:
Embraer reported record third-quarter revenues and reaffirmed its full-year 2025 financial and delivery guidance on Tuesday, even as profits softened compared with the previous quarter.
The Brazilian aerospace manufacturer said its 3Q25 results remained strong across its commercial, executive, and defense segments, underscoring continued momentum despite well-documented challenges, in the form of tariffs and supply chain delays.
The company reported revenues of $2 billion in 3Q25, an 18% year-on-year increase and the highest third-quarter figure in its history.
The performance was fuelled by a 31% jump in Commercial Aviation revenues and a 27% rise in Defense & Security, reflecting stronger deliveries.
Executive Aviation also remained a major contributor to overall performance, building on a surge in first-half shipments.
Key financial metrics
Embraer’s adjusted EBIT came in at $172 million, equivalent to an 8.6% operating margin.
While down from $191.8 million (10.5%) in 2Q25, the figure still marked an improvement compared with $146 million (7.3%) in 3Q24.
The quarter’s result was tempered by U.S. import tariffs of $17 million, which reduced profitability by approximately 85 basis points.
On a year-to-date basis, tariff-related expenses reached $27 million.
Notably, adjusted net income for the third quarter of this year stood at $54.4 million, down from $118.9 million in 2Q25 and $221 million in 3Q24.
For the nine months to September 2025, adjusted net income also dropped to $99.7 million, versus $288.5 million in the same period a year earlier.
However, the company’s free cash flow excluding Eve Air Mobility surged to $300.3 million, a sharp turnaround from the negative $162 million reported in 2Q25.
Deliveries up in 3Q25
Embraer delivered 62 aircraft during the quarter, up 5% year-on-year and an additional aircraft versus the 61 aircraft in 2Q25.
The 3Q deliveries consisted of 20 commercial jets (13 E2s and 7 E1s), 41 executive jets (23 light and 18 medium), and one KC-390 Millennium in the defense segment.
The firm order backlog rose to a record US$31.3 billion, up from US$29.7 billion in the second quarter and reflecting continued strength in both commercial and business aviation.
The E-Jet E2 family remains a key growth driver, supported by new commitments from global regional carriers and leasing firms, while the Phenom and Praetor executive jet lines continue to see robust demand.
Highlights include new orders for Avelo for 50 E195-E2s, plus 50 options, and Latam for 24 E195-E2s, plus 50 options.
Francisco Gomes Neto, president and CEO of Embraer, told investors on a Tuesday morning earnings call: “Embraer is currently experiencing a highly positive phase, a strong indication that our strategy driven by efficiency and innovation is delivering solid results and effectively supporting our sustainable growth.”
Full year guidance holds steady
Embraer reiterated its 2025 operational and financial guidance, projecting 77–85 commercial aircraft deliveries and 145–155 executive jet deliveries for the full year.
The company continues to target revenues in the range of $7.0–7.5 billion, an adjusted EBIT margin between 7.5% and 8.3%, and adjusted free cash flow of at least $200 million. Before Tuesday’s results were announced, J.P.Morgan analysts had forecast that, based on 1H solid data (EBIT margin at 8.7%), the EBIT margin guidance would be revised upward to at least 8.0-9.0%.
The steady guidance reflects Embraer’s realism but also its confidence in its production cadence and supply chain stability, both of which have improved after earlier disruptions.
Embraer has made efficiency gains within its production line a key focus.
Gomes Neto told investors: “We are transforming our supply chain through Supply Chain Management 2.0, a comprehensive initiative that integrates digital technologies, proactive risk management and the deployment of artificial intelligence for smarter planning and forecasting. These efforts have already started to pay off. Aircraft deliveries increased … and average shortage decreased by 25% compared to last year.”
The company also expects continued strength in the business jet market, where demand remains above pre-pandemic levels, and stable growth in defense through ongoing KC-390 deliveries and service contracts.
In a boost to its financial profile, S&P Global Ratings has upgraded Embraer’s credit rating to “BBB”, placing it two notches above the investment-grade threshold.
Fitch Ratings and Moody’s also revised their outlooks on the company from stable to positive, maintaining ratings of “BBB-” and “Baa3” respectively.
Engine durability for the E2s
Gomes Neto was asked about the PW1900G engine which powers the E190-E2 and E195-E2 aircraft, and whether the widespread issues affecting the Pratt & Whitney PW1500G geared turbofan engine which powers the Airbus A220 were impacting Embraer too. Reports suggest between 15-20% of the global A220 fleet has been grounded due to engine issues.
But Gomes Neto said: “The E2 is using the third generation of the PW 1900 G engine, which has incorporated several upgrades and improvements. The E2 is a much lighter aircraft compared to the others, which means there is less demand on the engines.
“That’s why the E2 has suffered much less than the competition. The engines are getting better and better with new improvements being implemented. We expect much better performance and durability of the engines going forward for the E2s.”
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