Embraer-Empresa Brasileira de Aeronautica (NYSE:EMBJ) reported fourth-quarter and full-year 2025 results that management said met delivery guidance while exceeding financial expectations, supported by record revenue, a higher backlog, and strong sales momentum across business units.
2025 performance and operational highlights
Chief Executive Officer Francisco Gomes Neto described 2025 as a “remarkable period,” noting Embraer achieved “two digits of revenue growth over the past three years, despite the supply chain challenges.” He said the E2 program saw strong global sales, helping consolidate the E2 platform’s position in the small narrowbody segment.
In defense and security, Embraer highlighted Sweden’s order for four KC-390 aircraft plus 90 options, as well as Portugal signing its sixth aircraft order along with 10 options for NATO countries. In services and support, Embraer noted an E195-E2 Pool Program agreement with Airlink and a maintenance service extension with Republic for its E1 fleet.
Orders, backlog, and segment sales
Gomes Neto said commercial aviation booked 157 E2 new orders during 2025 across all continents, plus 140 options, while the E1 program recorded 64 new orders plus 68 options. Embraer said commercial aviation backlog rose to $14.5 billion, with a 2.8-to-1 book-to-bill ratio.
Across the company, Chief Financial Officer Antonio Carlos Garcia reported consolidated backlog reached $31.6 billion in the quarter, up 20% and above Embraer’s prior record. He said backlog increased 42% in commercial aviation and 10% in defense and security, while services and support increased 7% and executive aviation increased 3%.
Garcia also said Embraer has about $20 billion in customer options not included in backlog, describing these as potential upside that “could support a significant expansion” over time. He added that backlog composition reflects what he characterized as a more attractive customer mix, though financial impacts will depend on execution, delivery phasing, and external factors.
By segment for 2025, Embraer said:
- Executive aviation sales totaled about $2.3 billion, with backlog at $7.6 billion and a 1.1-to-1 book-to-bill ratio; management highlighted the Phenom 300 as the world’s best-selling light jet for 14 straight years.
- Defense and security sold five KC-390 aircraft to two NATO countries plus 19 options, and 10 A-29 Super Tucanos sold to Uruguay, Panama, and Sierra Nevada; backlog ended at $4.6 billion with a 1.4-to-1 book-to-bill ratio.
- Services and support added about 75 aircraft to its Pool Program and signed 37 new Executive Care contracts; backlog finished at $4.9 billion with a 1.2-to-1 book-to-bill ratio.
Overall, Embraer reported a consolidated 1.7-to-1 book-to-bill ratio for 2025.
Deliveries and financial results
In the fourth quarter, Embraer delivered 91 aircraft: 32 commercial jets, 53 executive jets, and six defense-related aircraft. For the full year, the company delivered 78 commercial jets (within its 77–85 guidance) and 155 executive jets (at the high end of its 145–155 guidance).
Garcia said fourth-quarter revenue increased 15% year over year to nearly $3 billion, with segment mix of 37% commercial aviation, about 30% executive aviation, around 20% services and support, and 13% defense and security. Full-year revenue was $7.6 billion, up 18% from 2024 and above the high end of Embraer’s guidance.
Adjusted EBITDA was $298 million in the quarter (11.3% margin) and $889 million for the year (11.7% margin). Embraer said the full-year margin compared to 12.1% a year earlier when excluding what management called the one-time impact of the Boeing agreement.
Adjusted EBIT in the quarter was $231 million (8.7% margin), down from 11.5% in the prior-year quarter. Management attributed the quarter’s margin pressure to U.S. import tariffs and non-recurring infrastructure costs, specifying $27 million in tariffs and $20 million in infrastructure costs in Q4. For the full year, adjusted EBIT was $657 million with an 8.7% margin, which management said was in line with the prior year when excluding a one-time Boeing-related impact and above Embraer’s 8.3% guidance for 2025.
Adjusted net income was $153 million in the quarter and $253 million for the year, compared to $461 million in 2024. Management said the year-over-year decline was mainly driven by the one-time $150 million impact from the Boeing agreement, less favorable net results, and U.S. import tariffs. Embraer reported 2025 EBIT of $680 million after $340 million in net financial expense, $91 million in tax credit, and $7 million in minority interest, resulting in reported net income of $352 million. Adjustments to arrive at adjusted net income included a negative $137 million related to deferred taxes, partially offset by a positive $38 million from “EBEs results,” the company said.
Adjusted free cash flow was $738 million in the fourth quarter and $491 million for full-year 2025, exceeding Embraer’s guidance of $200 million or higher. Garcia attributed the fourth-quarter cash performance to operations, higher deliveries, and a sales campaign, and said defense customers also provided “final anticipation and advanced payment.”
Tariffs, supply chain, and 2026 guidance
Management said U.S. import tariffs were a significant factor in 2025 results, particularly in executive aviation. During Q&A, Embraer said it paid $54 million in tariffs in 2025 and later stated it has paid $80 million in total tariffs since April 2025, with 85% tied to executive aviation and the remainder to services and support. Executives also confirmed that as of February 24, Embraer aircraft, engines, and parts were exempt from the 10% tariffs, though the company still has tariff-paid inventory in the U.S. that will flow through results.
On guidance, Embraer said its 2026 outlook reflects its assessment of the operating environment prior to February 20 and takes a conservative approach given policy uncertainty around tariffs. The company guided to:
- Commercial aviation deliveries: 80 to 85 aircraft
- Executive aviation deliveries: 160 to 170 jets
- Revenue: $8.2 billion to $8.5 billion
- EBIT margin: 8.7% to 9.3%
- Adjusted free cash flow (without Eve): $200 million or higher
On supply chain conditions, management said it sees improvement but still expects some bottlenecks, and said the company is being proactive with suppliers. Embraer also addressed Pratt & Whitney-related questions, saying it does not expect “any big issues” with Pratt for 2026 deliveries.
Strategic partnerships and defense opportunities
Embraer discussed partnerships under exploration in India and the U.S. Gomes Neto said the company is working in India on two fronts: an MTA (mid-transport aircraft) opportunity with the Indian Air Force in partnership with Mahindra, and a civil aviation connectivity initiative with Adani Group. He said the defense side expects an RFP this year, while on the civil aviation effort the company is “still building the case,” adding that if orders are obtained in 2026, a rollout of jets by 2028 in India would be possible.
In the U.S., Embraer described an MOU with Northrop Grumman focused on integrating an autonomous boom refueling system and Agile Combat Employment solutions into the KC-390 Millennium, aimed at U.S. Air Force and allied needs. The company said it views the KC-390 as complementary rather than competitive with the KC-46 and added that if it receives a sizable order, the aircraft would be assembled and produced in the U.S., though it did not provide a timeline or size estimate.
Management also commented on a reported Indian requirement for military aircraft, saying it is excited about the opportunity and expects an RFP in 2026, while naming Lockheed Martin and Airbus as competitors. Separately, executives said raw material supply such as aluminum and titanium was not among the main supply chain difficulties they are monitoring.
Finally, Embraer provided an update on Eve, saying the first flight of Eve’s eVTOL prototype in December 2025 was a milestone, and that the full-scale prototype has flown 28 missions totaling more than one hour in hover flights, with certification targeted for 2027.
About Embraer-Empresa Brasileira de Aeronautica (NYSE:EMBJ)
Embraer SA (NYSE:EMBJ), legally known as Embraer – Empresa Brasileira de Aeronáutica SA, is a global aerospace company headquartered in São José dos Campos, Brazil. The company designs, develops, manufactures and sells commercial, executive, defence and agricultural aircraft. Embraer’s product portfolio includes the popular E-Jets family for regional and short-haul carriers, the advanced E2 series, a range of business jets under the Phenom, Legacy and Praetor brands, the A-29 Super Tucano military trainer and light attack aircraft, the C-390 Millennium multi-mission transport platform, and the Ipanema agricultural aircraft.
Embraer’s commercial aviation segment focuses on regional airlines and air taxi operators, offering aircraft that seat between 70 and 150 passengers.
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