Embraer's Fourth Quarter and Fiscal Year 2024 Earnings Highlights and Future Outlook

Embraer Reports Robust Earnings for 4Q and Full Year 2024

On February 27, 2025, Embraer S.A. (NYSE: ERJ; B3: EMBR3) released its earnings results for the fourth quarter and the entire fiscal year of 2024. The report highlighted a year of remarkable growth, particularly significant for those who follow the aerospace industry closely.

Financial Performance Overview

For the fourth quarter of 2024, Embraer posted revenues of $2.31 billion, bringing the annual total to an impressive $6.395 billion. This figure represents a 21% year-on-year increase, positioning the year as the highest revenue-generating period in the company's history. The substantial revenue growth aligns well with the company's guidance, which anticipated results on the higher end of its forecasts.

One of the standout areas was the Defense and Security segment, which experienced a remarkable 40% growth compared to the previous year. This surge underscores Embraer’s strong foothold in various sectors beyond commercial aviation.

In terms of earnings before interest and taxes (EBIT), Embraer achieved an adjusted EBIT of $265.1 million in Q4, resulting in an EBIT margin of 11.5%. For the entire year, adjusted EBIT totaled $708.2 million, with an overall margin of 11.1%. The 2024 figures constitute an improvement from the previous year's performance, excluding the impact from Boeing, where EBIT was only $558.2 million with an 8.7% margin.

Free Cash Flow and Debt Management

Embraer remained focused on maintaining strong cash flow, generating adjusted free cash flow of $995.5 million in the fourth quarter alone. For 2024, the free cash flow was calculated at $675.6 million. This positive cash flow trajectory has been bolstered by an increase in aircraft deliveries and solid pre-delivery sales (PDPs). Notably, the company’s net debt situation greatly improved, ending 2024 with a net debt position of $110.7 million without considering Eve, Embraer's electric vertical takeoff and landing aircraft.

The company's debt-to-EBITDA ratio saw a significant decline to 0.1, down from 1.4 in the previous year, reflecting enhanced financial health. In December 2024, Moody's acknowledged this improvement by upgrading Embraer’s credit rating from 'Ba1' to 'Baa3', now placing the company squarely within the Investment Grade (IG) category according to all three major U.S. rating agencies.

Delivery and Backlog Highlights

During Q4 2024, Embraer delivered a total of 75 jets, which comprised 31 commercial jets and 44 executive jets. For the entire fiscal year, the company delivered 206 aircraft. This figure included 73 commercial jets and 130 executive jets, signifying a 14% increase from the previous year's 181 deliveries, meeting the set guidance in both commercial and executive categories.

The firm order backlog reached a record $26.3 billion in Q4, marking the highest level in Embraer's history. This represents over a 40% increase year-on-year and a 16% rise from the preceding quarter. Such a robust backlog provides a solid foundation for future revenue streams and showcases the ongoing demand for Embraer's offerings.

Future Guidance

Looking ahead, Embraer provided guidance for 2025, forecasting deliveries of approximately 77 to 85 commercial aircraft and 145 to 155 executive aircraft. Total company revenues are anticipated to range between $7.0 billion and $7.5 billion, with an adjusted EBIT margin expected to fall between 7.5% and 8.3%. The foresight indicates continued confidence in Embraer's market position and growth trajectory within the aerospace sector.

Overall, Embraer’s fourth quarter and annual earnings results reflect its resilience and adaptability in an evolving market. Investors and stakeholders can look forward to a promising future as the company builds upon its achievements and embarks on new ventures in aviation. For further details, interested parties are encouraged to review the full earnings document available on Embraer’s investor relations website.

Conclusion

As Embraer continues to position itself as a leader in the aerospace industry, the strategic direction indicated in these earnings results paints an optimistic picture for investors and the broader market. With their solid financial footing and impressive order backlog, the company seems well-equipped to navigate the challenges of the coming years, making it an entity to watch in 2025 and beyond.