Embraer posts ‘all-time high’ third quarter revenue as US tariffs shrink profits
With a strong tailwind at its back, Brazilian aerospace manufacturer Embraer is undergoing a ‘highly positive phase’ as it posted all-time high third quarter revenue of $580m for its executive aviation segment but the profitability was dented by biting US tariffs.
The key driver behind this record-high revenue was Embraer’s all-time high year-to-date deliveries during 2025. “We also celebrated a historic milestone, the delivery of our 2,000th business jets, marking a record for year-to-date deliveries,” said Francisco Neto, CEO and president of Embraer during the earnings call.
Deliveries during the quarter stood at 41 units – unchanged from 41 in the same period of last year. Breakdown showed the company delivered: three Phenom 100s, 20 Phenom 300s, 11 Praetor 500s and seven Praetor 600s. Overall, during the nine months, the company has delivered 102 units – up from 86 in the same period of last year – an increase of 18.6%YoY.
While the revenues were higher, Embraer saw its gross margin shrink by 470 basis points to 18.7% of the revenue which the company said was due to the unfavourable product mix, US import tariffs and higher costs. The company estimates a 260bps (or $15m) impact on third quarter gross margin from the US tariffs.
These further tricked down to lower adjusted EBIT margin, which fell 420bps to 12.1% at the end of third quarter.
Embraer reported a 65%YoY increase in executive aviation order backlog of $7.3bn at the end of the third quarter. “Our backlog in executive aviation now stands at $7.3bn, supported by a robust 2.4:1 book-to-bill ratio, reflecting continued strong demand for our aircraft,” added Neto.
The company is benefiting from strong retail and fleet demand across its product portfolio in the executive aviation segment.
Overall, accounting for all operating segments, Embraer’s adjusted net income at the end of third quarter stood at $54m – a significant decline from $221m from last year.
In terms of investments, Embraer has earmarked $90m capital expenditure for its executive aviation between 2024-2027 to expand production capacity for its business jets at Gavião Peixoto in Brazil and at Melbourne in USA. This capex allocation, the company said, is a result of strong order backlog. Embraer’s executive aviation segment saw a 65% year-over-year increase in order backlog which hit $7.3bn at the end of the third quarter
The company also issued new debt in the third quarter to the tune of $1bn 12-years bond at 5.4% coupon. Embraer also plans to repurchase a total of $809m from its outstanding 2028 and 2030 bonds to streamline its debt maturity profile.
The company generated $300m in adjusted free cash flow in third quarter of 2025 bolstered by operating activities, $224m in EBITDA and lower accounts receivable.
Looking forward, the company expects an impact from U.S. import tariffs, which it expects to weigh on the fourth quarter margins. In addition, the company expects its return to office programme to increase operating costs as well.
However, despite these challenges, the company reaffirmed its full-year guidance for financial performance and aircraft deliveries. The company is targeting 145-155 deliveries in the executive aviation segment for 2025.
