By Brazil Stock Guide – Embraer S.A. (B3: EMBJ3; NYSE: EMBJ) reported adjusted net income of R$289 million in the third quarter of 2025, a 76% decline from a year earlier, when the company benefited from a one-off US$150 million arbitration settlement with Boeing. Despite the difficult comparison, the Brazilian planemaker delivered record consolidated revenue of R$10.9 billion, up 15.8% year-on-year, driven by stronger sales in Commercial Aviation (+27%) and Defense & Security (+24%).
Margins and earnings quality
Net income attributable to shareholders reached R$622.6 million, or R$0.85 per share, compared with R$991.6 million (R$1.35 per share) a year ago. Adjusted EBIT totaled R$927 million, with an 8.5% margin, reflecting solid cost control even amid U.S. import tariffs and higher logistics expenses. The EBITDA margin stood at 11.7%, down from 21% in 3Q24, when the Boeing-related gain temporarily inflated profitability. Management noted that underlying operations remain healthy, with cost discipline and improving production flow in both commercial and executive jet programs.
Operational momentum and backlog expansion
Embraer delivered 62 aircraft in the quarter — 20 commercial jets (13 E2s and 7 E1s), 41 executive jets (23 light and 18 midsize) and one KC-390 Millennium — up 5% from last year. The company’s order backlog reached a record US$31.3 billion, up 38% year-on-year, with growth across all divisions. Commercial Aviation stood out with a 37% annual increase, while Executive Jets and Services & Support advanced 65% and 40%, respectively. The results confirm Embraer’s growing global footprint, supported by strong demand from airlines modernizing fleets with more efficient E2 aircraft and steady interest in business jets across North America and Europe.
Cash generation and financial position
The planemaker reported adjusted free cash flow of R$1.6 billion, reversing the outflow seen in the previous quarter, as deliveries accelerated and receivables declined. Embraer ended September with R$8.9 billion in cash (excluding Eve) and R$11.1 billion in consolidated liquidity, plus a US$1 billion revolving credit facility as additional buffer. Net debt improved to R$2.3 billion, compared with R$5.9 billion a year earlier, marking a R$3.6-billion reduction in leverage. The company also completed a US$1-billion, 12-year bond issuance in October at a 5.4% coupon, using part of the proceeds to refinance 2028 and 2030 maturities, reducing future interest costs and extending the debt profile.
Credit upgrades and market recognition
The stronger balance sheet and consistent operating performance prompted S&P Global Ratings to upgrade Embraer’s credit rating to “BBB”, two notches above investment grade. Fitch Ratings and Moody’s also revised their outlooks to positive, maintaining investment-grade status at “BBB–” and “Baa3,” respectively. The rating actions highlight investor confidence in Embraer’s deleveraging trajectory, predictable cash generation, and robust demand across its main business lines. On the market side, Embraer’s shares closed September at R$80.29 on the B3 and US$60.45 on the NYSE, giving the company a market capitalization of R$58.9 billion (US$11.1 billion).
2025 outlook reaffirmed
Embraer reaffirmed its 2025 full-year guidance, projecting deliveries of 77 to 85 commercial jets and 145 to 155 executive jets. The company expects consolidated revenue between US$7.0 billion and US$7.5 billion, an adjusted EBIT margin of 7.5% to 8.3%, and free cash flow of at least US$200 million for the year. CEO Francisco Gomes Neto said the company remains focused on improving productivity, expanding service capacity, and strengthening its sustainability roadmap — particularly through the development of hybrid and electric propulsion projects led by Eve Air Mobility, Embraer’s urban air mobility subsidiary.
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