# Embraer Sees Strongest Order Book in Decade as Analysts Press on Buybacks

*Executives field questions on shareholder returns, U.S. import tariffs and margins, emphasizing the strongest order book in company history.*

- Published: 2025-11-04
- Section: Insights
- Tags: aircraft, Embraer
- URL: https://brazilstockguide.com/insights/embraer-3q25-backlog-dividends-tariffs/

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**By Brazil Stock Guide –** During **Embraer**’s third-quarter 2025 earnings call, analysts pressed management on dividends, costs, and trade tariffs. While investors sought clarity on shareholder payouts after a robust quarter, executives underscored financial discipline — and highlighted the company’s **record-high backlog**, signaling long-term visibility and renewed confidence.

Chief Financial Officer **Antonio Carlos Garcia** acknowledged that **share buybacks are under consideration** but ruled out immediate action. “We are evaluating our capital structure. Buyback is on the table, but no decision yet. We’re already paying 25% of net income, which is significant for a capital-intensive business,” he said in response to **Kristine Liwag of Morgan Stanley**, who praised Embraer’s balance sheet strength and fast deleveraging after the pandemic.

### **Record backlog and “most positive phase of the decade”**

Garcia announced that **Embraer’s company-wide backlog reached $31.3 billion**, up **38% year over year** and above the company’s previous all-time record. The strongest growth came from **executive aviation (+65%)** and **service & support (+40%)**, followed by **commercial aviation (+37%)** and **defense (+80%)**. He also emphasized that **customers currently hold about $20 billion in purchase options**, which could lift the total portfolio **toward $50 billion** in the coming years.

In the press Q&A, **CEO Francisco Gomes Neto** described the current moment as **“the most positive phase of the decade,”** pointing to the backlog as evidence of Embraer’s strategic stability and product strength. “We have a modern, competitive, and well-positioned portfolio,” he said, adding that the company’s order book provides a **solid growth runway for the next five years**, supported by **defense contracts, service expansion, and new E-Jet orders from Avelo and LATAM**.

Beyond a financial metric, the record backlog reflects Embraer’s **structural turnaround** after a decade marked by the failed Boeing merger and the COVID-19 crisis. The company now operates with **net debt at just 0.5x EBITDA**, stronger production stability, and ongoing investments in **new hangars and final assembly lines in Gavião Peixoto and the U.S.** — all pillars of a more resilient growth cycle.

### **Tariffs and margins under scrutiny**

Analysts also zeroed in on the **U.S. import tariffs** that have affected Embraer’s executive-jet exports. “Negotiations between the two governments are progressing well,” Gomes Neto said, citing **President Lula’s recent meeting with the U.S. president**. The CEO stressed that the **10% tariffs “hurt both margins and competitiveness for future deliveries.”**

**Marcelo Motta of J.P. Morgan** questioned the drop in executive-jet margins. The CFO attributed it to **cost inflation and import duties**, which shaved off roughly **2.5 percentage points of EBIT margin**. Garcia added that tariffs totaled **$27 million through September**, out of **$60–65 million projected for the full year**.

### **Conservative guidance and delivery focus**

Asked why Embraer maintained its full-year guidance despite above-target margins, Gomes Neto responded that the company preferred caution: “The supply-chain risk is over, but we have a heavy delivery schedule in the next two months. We decided to keep guidance until all aircraft are out the door.” Garcia added that, **if all deliveries proceed as planned**, Embraer could even **surpass the upper end of its EBIT range** — currently between **7.5% and 8.3%**.

### **Services and support: Embraer’s new profit engine**

**Lucas Laghi of XP Investments** focused on the evolving margin profile of the services division, now expanding with **“agnostic” maintenance contracts and GTF engine programs**. Garcia admitted to “delays and penalties” that hit Q3 profitability but expects **margins to rebound to around 15% in Q4**. Gomes Neto added: “**Service and support is one of our main growth drivers.** We doubled our MRO capacity in the U.S. and are doing the same for commercial jets in Dallas.”

### **Technology and long-term outlook**

Closing the press session, Gomes Neto reaffirmed Embraer’s ambition to prepare for **“a more ambitious expansion phase.”** The company continues to **invest in hybrid, electric, and eVTOL propulsion**, while the **turboprop project has been canceled**, and the **E175-E2** remains on hold pending revisions to the U.S. *scope clause*.

**Read more**: [Embraer profit drops 76% to R$289 million, but posts record revenue in 3Q25](https://brazilstockguide.com/insights/embraer-profit-drops-76-percent-3q25-results/)

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Source: Brazil Stock Guide, https://brazilstockguide.com/insights/embraer-3q25-backlog-dividends-tariffs/