Embraer (EMBR3) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 32% year-over-year to $1.69 billion, driven by Executive Aviation and Defense & Security, both up over 65% year-over-year.

• Adjusted EBIT margin rose to 17.6% (from 7.8% in 3Q23), aided by a $150 million Boeing arbitration gain.

• Free cash flow (ex-Eve) reached $241 million in Q3, with year-to-date expected to turn positive by year-end.

• Firm order backlog hit $22.7 billion, a nine-year high, with a book-to-bill ratio above 2-to-1.

• Fitch and S&P upgraded credit ratings to BBB- (Investment Grade); Moody's outlook is positive.

Financial highlights

• Adjusted EBITDA for Q3 was $357 million (21.1% margin), up from $149 million (11.6%) in 3Q23.

• Adjusted net income for Q3 was $221 million (13.1% margin), up from $80.4 million in 3Q23.

• Cash position increased to $1.77 billion, with net debt (ex-Eve) reduced to $1.09 billion.

• Net debt to EBITDA leverage ratio improved to 1.0x in Q3 2024.

• Basic EPS for Q3 was $1.35, up from $0.41 in 3Q23.

Outlook and guidance

• 2024 revenue guidance maintained at $6.0–$6.4 billion.

• Adjusted EBIT margin guidance raised to 9–10% (from 6.5–7.5%), with part of the increase from the Boeing agreement.

• Free cash flow guidance increased to $300 million or higher for 2024.

• Commercial Aviation delivery guidance reduced to 70–73 aircraft; Executive Aviation guidance remains at 125–135 deliveries.

• Double-digit growth in deliveries, revenue, and EBIT expected for 2025 and beyond.