What Happened — Embraer Q4 2025 and Full Year 2025 Earnings Overview
Embraer S.A. (NYSE: EMBJ; B3: EMBJ3) reported fourth-quarter and full-year 2025 earnings on March 6, 2026, delivering the strongest revenue year in its history and a record order backlog that extends the company’s revenue visibility well into the next decade. The results met or exceeded every major guidance target set at the beginning of 2025, reflecting execution discipline across all four business segments: Commercial Aviation, Executive Aviation, Defense & Security, and Services & Support.
Full-year 2025 revenue totaled $7.58 billion (R$39.8B at R$5.25/USD), an 18% increase year-over-year and above the high end of the company’s $7.0–$7.5 billion guidance range. In the fourth quarter alone, revenue reached $2.65 billion (R$13.9B), up 15% year-over-year, with a segment mix of approximately 37% Commercial Aviation, 30% Executive Aviation, 20% Services & Support, and 13% Defense & Security.
On the profitability side, the picture is more nuanced. Full-year adjusted EBIT came in at $656.8 million (R$3.45B), above the company’s own 2025 guidance of 7.5%–8.3% ex-Boeing, but below the $708.2 million reported in 2024 — a year that included a one-time Boeing arbitration benefit. Excluding that Boeing settlement, the comparable 2024 adjusted EBIT was $558.2 million, meaning underlying EBIT growth on a clean basis was roughly 18%. The full-year adjusted EBIT margin of 8.7% was flat year-over-year on this comparable basis, though 70 basis points below 2024 reported margin. U.S. import tariffs — which hit Embraer’s U.S. deliveries throughout the year — accounted for $54 million in incremental cost, or approximately 70 basis points of margin headwind for the full year.
Adjusted net income for Q4 2025 was R$832 million (~$158M), down 20.4% from R$1.04 billion (~$198M) in Q4 2024, reflecting both the tariff impact and the absence of favorable non-recurring tax items that aided the prior-year quarter. Reported net income attributable to Embraer shareholders was R$447.5 million (~$85M) in Q4 2025, up 69.3% from R$263.8 million (~$50M) in Q4 2024. Full-year adjusted net income fell to R$1.37 billion (~$261M) from R$2.6 billion (~$495M) in 2024, largely due to deferred tax movements and Eve-related charges that distort year-over-year comparisons in this metric.
The stock reaction was sharply negative. Shares (EMBJ3) fell approximately 7.5% on March 6, as markets focused on the quarterly margin compression rather than the full-year beat. The Santander analyst team, however, characterized the results as “slightly above expectations” with recurring EBIT 1%–4% above estimates, and maintained an outperform rating with a $86 ADR price target.
Key Drivers — Embraer Q4 2025 Segment Performance and Operational Analysis
Commercial Aviation Performance
Commercial Aviation delivered 78 jets in 2025 — in line with its 77–85 aircraft guidance — including 44 E2-generation and 34 E1-generation aircraft. In Q4 alone, 32 jets were delivered: 18 E2s (including 15 E195-E2s, Embraer‘s largest current commercial platform) and 14 E1s. Q4 commercial deliveries improved meaningfully over both Q3 2025 (20 deliveries) and Q4 2024 (31 deliveries).
The order pipeline was the standout story. Commercial Aviation booked 157 E2 new orders across all continents in 2025, plus 140 options, while the legacy E1 program attracted 64 new orders and 68 options — validating continued secondary market demand. Q4 highlights included 20 E195-E2 orders from Dutch lessor TrueNoord, 3 E195-E2 orders from Helvetic Airways, and 4 E175 orders from Côte d’Ivoire — the type of geographic breadth that demonstrates the E-Jet family’s global reach beyond the U.S. regional market. The resulting book-to-bill ratio of 2.8x on E175 and E2 platforms helped lift the Commercial Aviation backlog 42% year-over-year to $14.5 billion.
Commercial Aviation revenue declined 1% year-over-year in Q4 to $974 million (~R$5.1B), due to customer mix — a temporary effect that management expects to normalize as higher-value E2 deliveries ramp up. Full-year Commercial Aviation revenue was up modestly. The adjusted EBIT margin for this segment improved sequentially despite Q4 tariff headwinds, as volume gains and pricing progress more than offset cost pressures.
Executive Aviation Performance
Executive Aviation was arguably the operationally strongest division in 2025. The segment delivered 155 executive jets for the year — at the high end of its 145–155 aircraft guidance — including 86 light jets and 69 medium jets. The Q4 alone saw a record 53 business jet deliveries, the highest single-quarter total in company history, including 23 Phenom 300s, which maintained its status as the world’s best-selling light jet for 14 consecutive years.
Q4 Executive Aviation revenues reached an all-time quarterly high of approximately $750 million (~R$3.9B), with the full-year segment revenue growing 25% year-over-year. The adjusted EBIT margin improved from 6.2% to 7.9% for the full year, driven by operating leverage on higher volumes and favorable client mix. Total 2025 sales in the segment reached approximately $2.3 billion, supporting a $7.6 billion backlog with a stable 1.1x book-to-bill ratio.
The recently launched Praetor 500E and Praetor 600E variants — upgraded versions of Embraer’s mid-size and super-midsize flagship business jets — are expected to serve as additional demand catalysts in the 2026 order cycle, particularly for operators upgrading from earlier Praetor generations.
Defense and Security Performance
Defense & Security was the fastest-growing segment in 2025, with full-year revenue up 36% year-over-year. Q4 revenue in the segment reached $345 million (~R$1.8B), up 48% year-over-year, driven by strong KC-390 Millennium revenue recognition tied to customer delivery mix and contract milestones. The segment’s adjusted EBIT margin expanded from roughly 6.2%–7.9% for the year, consistent with broader defense program maturation.
NATO adoption of the KC-390 continued to accelerate. In Q4, Sweden ordered four KC-390 aircraft with 90 options — a breakthrough for a Scandinavian NATO member and potentially the largest options pool attached to any single KC-390 deal. Portugal, already the program’s launch customer, signed an amendment for its sixth aircraft and added 10 purchase options explicitly designated for future NATO member acquisitions. For the full year, Defense sold five KC-390s to two NATO countries plus 19 additional options. The segment also sold 10 A-29 Super Tucanos to Uruguay, Panama, and Sierra Nevada Corporation. The Defense backlog closed 2025 at $4.6 billion with a healthy 1.4x book-to-bill ratio.
An MOU signed with Northrop Grumman to develop an autonomous boom air refueling system and Agile Combat Employment solutions for the KC-390 marks a strategic step toward potential U.S. Air Force engagement. Management described the KC-390 as complementary — not competitive — with the Boeing KC-46, and indicated that if a sizable U.S. order materializes, assembly would be localized in the United States. India’s anticipated military transport RFP in 2026, where Embraer competes against Lockheed Martin and Airbus, represents another potential major expansion.
Services and Support Performance
Services & Support revenue grew 25% year-over-year in Q4 to $552 million (~R$2.9B) and 18% for the full year, driven by higher volume across all segments, particularly Defense and Commercial. The segment’s adjusted EBIT margin declined modestly from 16.5% to 15.5%, reflecting the ramp-up of new operations including the OGMA GTF engine shop in Portugal. Q4 highlights included a Pool Program agreement with Airlink for E195-E2 jets and an extended E1 fleet maintenance contract with Republic Airways covering more than 240 jets in the U.S. The segment closed 2025 with a $4.9 billion backlog (up 7% year-over-year) and a 1.2x book-to-bill ratio. Approximately 75 aircraft were added to Embraer’s pool program portfolio during the year, expanding the recurring revenue base.
Services is the highest-margin segment in the portfolio, and management views its expansion — including a Dallas-Fort Worth MRO center opened in 2025 and a potential MRO presence in Portugal — as a structural driver of margin improvement over the medium term as the in-service fleet grows alongside the delivery ramp.
Financial Detail — Embraer Q4 2025 Income Statement, Cash Flow, and Backlog Tables
Embraer reports in U.S. dollars as its primary currency. BRL conversions below use R$5.25/USD (March 9, 2026). Note that Brazilian-source reporting uses R$5.25 to approximate the current spot rate; Embraer’s official filings are denominated in USD. Full-year adjusted EBITDA reached $922 million (R$4.84B), with a margin of 12.2%, compared to $889 million (R$4.67B) at an 11.1% margin in the comparable prior year (excluding the Boeing settlement).
Consolidated Financial KPIs Table — Embraer 4Q25 and Full Year 2025
| Metric | 4Q25 | 4Q24 | YoY | FY25 | FY24 | YoY |
|---|---|---|---|---|---|---|
| Net Revenue (USD) | $2,652M | $2,304M | +15% | $7,578M | $6,390M | +18% |
| Net Revenue (BRL) | R$13.9B | R$13.7B | +4.3% | R$41.9B | R$35.5B | +18% |
| Adj. EBITDA (USD) | $321M | $298M | +7.7% | $922M | $889M | +3.7% |
| Adj. EBITDA Margin | 11.3% (BRL: 11.2%) | 14.2% | –2.9pp | 12.2% | 13.9% | –1.7pp |
| Adj. EBIT (USD) | $231M | $265M | –12.8% | $657M | $558M* | +17.7% |
| Adj. EBIT Margin | 8.7% | 11.5% | –2.8pp | 8.7% | 8.7%* | flat |
| Adj. Net Income (BRL) | R$832M (~$158M) | R$1,044M (~$199M) | –20.4% | R$1,367M (~$260M) | R$2,598M (~$495M) | –47.4% |
| GAAP Net Income—Shareholders (BRL) | R$447.5M (~$85M) | R$263.8M (~$50M) | +69.6% | — | — | — |
| Adj. Free Cash Flow w/o Eve (USD) | $738M | $996M | –25.8% | $491M | — | — |
| Net Cash Position w/o Eve (USD) | $109M | Net debt | Positive turn | $109M | Net debt | Positive turn |
| Avg. Loan Maturity (ex Eve) | 9.1 years | 3.7 years | +5.4 yrs | — | — | — |
| U.S. Tariff Impact | $27M (102bp) | — | — | $54M (70bp) | — | — |
* FY24 adj. EBIT and margin shown ex-Boeing arbitration settlement for comparability. BRL figures from IR release at prevailing rates; USD primary. Rate used for BRL USD conversions in this article: R$5.25/USD (March 9, 2026).
Balance sheet strengthening was a notable development. Embraer exited 2025 with a net cash position of $109.3 million (R$574M) excluding Eve — a meaningful shift from a net debt position a year earlier. This was achieved through a liability management exercise that extended the average loan maturity from 3.7 years at end-2024 to 9.1 years at end-2025, materially reducing near-term refinancing risk. Cash and equivalents stood at $1.95 billion (R$10.2B) as of December 31, 2025, compared with $1.56 billion (R$8.2B) at year-end 2024.
Adjusted free cash flow excluding Eve was $738.3 million (R$3.9B) in Q4 alone — a very strong finish — and $491.2 million (R$2.6B) for the full year. The Q4 cash generation was supported by a significant increase in customer advance payments tied to the strong order intake across segments. Capital expenditure for 2025 was R$479.5 million (~$91M) in Q4, lower than R$611.2 million (~$116M) in Q4 2024, reflecting tighter investment discipline.
Management Signals — Embraer Q4 2025 Earnings Call Key Takeaways
Tariff exemption secured. As of February 24, 2026, all Embraer-manufactured aircraft, engines, and parts received exemption from U.S. import tariffs. Management described this as a key risk removed from the 2026 outlook, though the 2026 guidance of 8.7%–9.3% adj. EBIT margin was conservatively set assuming 10% tariffs. CFO Antonio Carlos Garcia indicated the company will not revise guidance until it has greater visibility, given broader policy uncertainty.
U.S. defense ambitions. The MOU with Northrop Grumman for a boom refueling-capable KC-390 is a direct engagement with the U.S. Air Force ecosystem. If a large U.S. contract materializes, Embraer would assemble the aircraft in the United States — a potential manufacturing footprint expansion and political risk hedge. No timeline was provided.
India military opportunity. Embraer expects a formal RFP from India for military transport aircraft in 2026, competing against Lockheed Martin and Airbus. A Mahindra Group strategic alliance is in place to support local positioning. India’s commercial aviation market is also flagged as a long-term E-Jet demand catalyst with an estimated 500-aircraft requirement over two decades for underserved Tier 2/3 routes.
Eve eVTOL progressing. Eve completed its first full-scale eVTOL prototype flight in December 2025 and had logged 28 missions and more than one hour of hover time as of the earnings call. Certification is targeted for 2027. Eve’s results are excluded from Embraer’s adjusted metrics throughout this article.
2026 guidance (set conservatively): Commercial deliveries 80–85; Executive deliveries 160–170; Revenue $8.2–$8.5 billion; Adj. EBIT margin 8.7%–9.3% (assuming 10% U.S. tariffs); Adj. free cash flow w/o Eve ≥$200 million. Management expects substantial delivery growth in the medium term and is preparing for a “more ambitious long-term expansion” supported by next-generation aircraft technologies.
What to Watch Next — Embraer 2026 Outlook and Key Catalysts
The single most important variable for Embraer’s 2026 financial profile is whether the tariff exemption secured in late February holds. Should U.S. trade policy shift and reimpose tariffs on aircraft or aerospace components, the $54 million annual drag from 2025 could return — or worsen — compressing margin at a moment when delivery volumes are still ramping. Conversely, if the exemption is permanent, guidance revision to the upper end of the 8.7%–9.3% EBIT margin range becomes plausible.
Delivery execution will be the operational focus. Embraer guided 80–85 commercial jets and 160–170 executive jets for 2026 — both above 2025 actuals of 78 and 155 respectively. Meeting that range while sustaining margins requires continued supply chain discipline, particularly given that raw materials (aluminum, titanium) were not cited as a current constraint but remain a watch item given the post-tariff environment. The quarterly delivery cadence — historically back-loaded, as seen with 91 aircraft in Q4 2025 versus 62 in Q3 — will be a key performance signal through the year.
On the defense front, two potential large contract wins could serve as meaningful stock catalysts: the India military transport RFP expected in 2026, and the U.S. Air Force engagement pathway through the Northrop Grumman MOU. Neither has a defined timeline, but the KC-390’s growing NATO credibility — Sweden and Portugal committed in Q4, Lithuania signed an MOU, and five NATO nations are now in or near the KC-390 fold — meaningfully strengthens the competitive narrative for both.
Longer term, the Services & Support ramp is worth tracking closely. The segment currently generates the highest margins in the portfolio, and as the cumulative in-service fleet grows with each delivery year — Embraer has delivered more than 9,000 aircraft total since 1969 — the installed-base aftermarket opportunity expands structurally. The MRO facility expansion strategy (Dallas-Fort Worth open, Portugal in discussion, India planned) signals a deliberate push to capture a larger share of that value.
Deliveries, Backlog, and 2026 Guidance Table
| Segment / Metric | 4Q25 Deliveries | FY25 Deliveries | FY24 Deliveries | Backlog (4Q25) | 2026 Guidance |
|---|---|---|---|---|---|
| Commercial Aviation | 32 jets | 78 jets | 69 jets | $14.5B (+42% YoY) | 80–85 jets |
| — of which E2-generation | 18 (incl. 15 E195-E2) | 44 | — | — | — |
| Executive Aviation | 53 jets (record) | 155 jets | 133 jets | $7.6B (+3% YoY) | 160–170 jets |
| — of which Phenom 300 | 23 units | — | — | — | — |
| Defense & Security | 6 (2 KC-390, 4 A-29) | 11 | 4 | $4.6B (+10% YoY) | — |
| Services & Support | — | — | — | $4.9B (+7% YoY) | — |
| Total Deliveries | 91 aircraft | 244 aircraft | 206 aircraft (+18%) | $31.6B (+20% YoY) | Revenue $8.2–8.5B |
Risks — Embraer Key Risk Factors for 2026
Tariff policy reversal. The February 24 exemption is the most important risk variable. Embraer’s guidance explicitly assumes 10% U.S. import tariffs, acknowledging that the policy environment lacks certainty. Any reimposition of tariffs on aircraft or aerospace components — particularly given Embraer’s heavy U.S. commercial and executive jet delivery exposure — would compress margins. The $54 million 2025 impact at 70 basis points provides a rough calibration of the magnitude.
Delivery concentration in Q4. Embraer’s delivery patterns are heavily back-loaded — 91 of 244 aircraft (37%) were delivered in Q4 2025 alone. This creates revenue and cash-flow risk if supply chain disruptions, customer acceptance delays, or production issues accumulate late in any given year. The Q4 2025 free cash flow of $738 million also included significant advance payment timing, which may not repeat at the same scale in 2026.
Competitive pressure in Commercial Aviation. Embraer occupies a near-monopoly in the 70–150 seat commercial jet category following ATR’s focus on turboprops. However, pressure is emerging from Airbus A220 orders at the lower end of that range, and Chinese manufacturer COMAC’s C909 poses a longer-term competitive threat in emerging markets where Embraer’s E1 fleet has historically dominated regional aviation.
Eve eVTOL cash consumption. While excluded from adjusted metrics, Eve continues to consume capital. The subsidiary received $40 million in BNDES debt financing in 2025 and is targeting 2027 certification, but the eVTOL market timeline carries significant execution risk. Any capital call from Eve to Embraer — or a write-down — would flow through GAAP results.
FX exposure. Embraer reports in USD but incurs a significant portion of its cost base in Brazilian reais — wages, local suppliers, and infrastructure. A materially stronger BRL against the dollar would pressure margins, as the cost base rises in USD terms while revenue is largely dollar-denominated. The BRL’s appreciation of roughly 9% over the past year (USD/BRL moved from ~5.51 to ~5.25) is already a background headwind for future cost comparisons.
Sector Context — Brazil Aerospace Industry and Regional Aviation Outlook
Embraer is the world’s third-largest commercial aircraft manufacturer and Brazil’s most significant aerospace industrial asset. It is also the country’s largest exporter of high value-added goods, a distinction that carries geopolitical weight. In an environment where manufacturing reshoring and defense supply chain diversification are top policy priorities across the West, Embraer’s positioning as a democratic-allied, NATO-expanding defense supplier elevates its strategic relevance beyond pure financial metrics.
The regional aviation market — Embraer’s commercial core — is structurally undersupplied relative to pre-pandemic order books. The Boeing 737 production crisis extended delivery timelines industry-wide, forcing airlines to reassess regional connectivity strategies. Embraer has capitalized on this dynamic: the 2.8x book-to-bill on E-Jet platforms in 2025 signals demand that far outpaces current production capacity, supporting a delivery ramp that could sustain double-digit revenue growth into 2027–2028.
On the defense side, Europe’s rearmament cycle — driven by the ongoing Russia-Ukraine conflict and NATO’s 2% GDP defense spending commitments — directly benefits the KC-390. With Portugal, Hungary, the Netherlands, Czech Republic, Austria, Sweden, and Lithuania now in various stages of KC-390 procurement or discussion, the platform has achieved a level of NATO adoption that transforms it from a Brazilian export success story into a credible transatlantic defense franchise.
Embraer trades on both the B3 (EMBJ3) and NYSE (EMBJ). The stock closed at R$82.25 on March 6, 2026 after the post-earnings selloff, reflecting a 52-week range of approximately R$60–R$105. The consensus analyst target of approximately R$92 (equivalent to ~$86 on the ADR) implies meaningful upside from current levels if the delivery ramp executes on plan and tariff exemptions hold through 2026.