2Q26
Filed Aug 10, 2026Embraer reported all-time high second-quarter revenue of US$2,235.3 million, expanded Adjusted EBIT margin to 13.3%, generated US$401.0 million of Adjusted free cash flow w/o Eve, and raised 2026 Adjusted EBIT margin and free-cash-flow guidance.
Revenue increased +23% year-over-year, all operating business units grew revenue, Adjusted EBIT margin reached +13.3% versus +10.5% in 2Q25, Adjusted free cash flow w/o Eve was US$401.0 million, and the company increased its full-year Adjusted EBIT margin and free-cash-flow outlook while maintaining revenue and delivery guidance.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenueother | US$2,235.3 million | – | +23% |
| Gross profitother | US$444.8 million | – | – |
| Operating income before financial resultother | US$285.8 million | – | – |
| Reported EBITother | US$285.8 million | – | – |
| Reported EBIT marginother | +12.8% | – | – |
| Adjusted EBITDAnon-GAAP | US$355.6 million | – | – |
| Adjusted EBITDA marginnon-GAAP | 15.9% | – | – |
| EBITDAother | US$344.5 million | – | – |
| EBITDA marginother | 15.4% | – | – |
| Adjusted EBITnon-GAAP | US$296.9 million | – | – |
| Adjusted EBIT marginnon-GAAP | 13.3% | – | – |
| Income for the periodother | US$213.9 million | – | – |
| Net income attributable to Embraer shareholdersother | US$212.6 million | – | – |
| Adjusted net incomenon-GAAP | US$218.6 million | – | – |
| Adjusted net marginnon-GAAP | 9.8% | – | – |
| Earnings per share - ADS basicother | US$1.1880 | – | – |
| Earnings per share - ADS dilutedother | US$1.1880 | – | – |
| Net cash provided by operating activitiesother | US$447.4 million | – | – |
| Adjusted free cash flow w/o Evenon-GAAP | US$401.0 million | – | – |
| Embraer consolidated adjusted free cash flownon-GAAP | US$351.8 million | – | – |
| Firm order backlogother | US$34.5 billion | – | more than 16% higher yoy |
| Aircraft deliveriesother | 65 aircraft | – | +7% |
| Embraer consolidated cash positionother | US$2,340.6 million | – | – |
| Embraer cashother | US$1,937.4 million | – | – |
| Embraer gross debtother | US$2,151.9 million | – | – |
| Embraer net cashnon-GAAP | US$(214.5) million | – | – |
| Embraer & Eve net cashother | US$(123.6) million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Commercial AviationHigher volumes; gross margin decreased from +10.1% to +8.4% year-over-year and Adjusted EBIT margin decreased from +4.3% to +2.9% because of customer mix, including legacy contracts. | US$625 million | – | +8% |
| Executive AviationHigher volumes and product mix. Gross margin increased from +20.9% to +23.8%, while Adjusted EBIT margin increased from +14.5% to +23.4%, supported by stronger operating performance and an extraordinary US$60 million tax credit. | US$725 million | – | +32% |
| Defense & SecurityStronger KC-390 revenue recognition related to customer mix and product stage under the percentage-of-completion calculation method. Gross margin increased from +19.5% to +20.6% and Adjusted EBIT margin rose from +9.2% to +11.9%. | US$304 million | – | +38% |
| Services & SupportHigher volumes across all segments. Gross margin decreased from +28.8% to +27.5% because of materials inflation and U.S. tariffs, while Adjusted EBIT margin increased from +15.5% to +18.7%, primarily driven by a US$8 million extraordinary tax credit. | US$565 million | – | +24% |
| OthersLower deliveries in agricultural aviation during the quarter. | US$15 million | – | -6% |
2026 Guidance Updated (Eve Not Included) outlook
- RevenueUS$8.2 to US$8.5 billion
- NoteCommercial Aviation deliveries: 80 - 85 aircraft
- NoteExecutive Aviation deliveries: 160 - 170 aircraft
- NoteAdjusted EBIT margin: 10.0% - 10.6%
- NoteFree cash flow: US$400 million or higher
Capital returns
- Dividends paid in the period: US$62.8 million.
- On June 18, 2026, the company declared R$200.0 million in Interest on Equity related to the 2nd quarter.
- Gross Value per Share: R$0.28.
- Gross Value per ADS: US$0.22.
- EMBJ3 Payment Date: May 24, 2027.
- 2026 Total dividend yield: 0.34%.
- Repurchases of common shares: - in 2Q26.
What drove it
- All business units delivered year-over-year revenue growth: Defense & Security +38%, Executive Aviation +32%, Services & Support +24%, and Commercial Aviation +8%.
- Commercial Aviation delivered 20 aircraft, consisting of 10 E2s and 10 E1s; Executive Aviation delivered 45 jets, consisting of 24 small and 21 medium jets. There were no Defense & Security deliveries.
- The firm order backlog reached US$34.5 billion, with year-over-year backlog growth of +42% in Defense & Security, +15% in Commercial Aviation, +12% in Services & Support, and +5% in Executive Aviation.
- The company recorded an extraordinary US$68 million tax credit during the quarter.
- Sales-related pre-downpayment inflows, reflected in contract liabilities, supported cash generation.
- Lower net financial expenses and stronger operating performance supported adjusted net income growth.
Concerns
- Commercial Aviation gross margin decreased from +10.1% to +8.4% year-over-year and Adjusted EBIT margin decreased from +4.3% to +2.9% because of customer mix, including legacy contracts.
- Services & Support gross margin decreased from +28.8% to +27.5% because of materials inflation and U.S. tariffs.
- U.S. import tariffs totaled US$8 million during 2Q26. The company expects to remain subject to circa US$12 million of indirect U.S. import tariffs on a yearly basis.
- The quarter's Adjusted EBIT included an extraordinary US$68 million tax credit. Excluding U.S. tariffs and the extraordinary tax credit, Adjusted EBIT margin would have been +10.6%.
- Eve generated negative US$(49.2) million free cash flow during the quarter and its gross debt increased by US$9.9 million sequentially to US$312.3 million.
What to watch
- Execution against 2026 Commercial Aviation deliveries of 80 - 85 aircraft and Executive Aviation deliveries of 160 - 170 aircraft.
- Sustainability of the updated 10.0% - 10.6% Adjusted EBIT margin outlook after the extraordinary tax credit and tariff effects.
- Conversion of the US$34.5 billion firm order backlog into revenue and deliveries.
- Commercial Aviation margin performance amid customer mix and legacy contracts.
- Sales-related pre-downpayment inflows and contract-liability movements that supported US$401.0 million of Adjusted free cash flow w/o Eve.
- Progress of the Executive Aviation and Services & Support capacity-expansion projects, including the stated production and MRO ramps.
Balance sheet and cash flow
- Working Capital (w/o Eve): US$(1,012.9) million at 2Q26, compared with US$(828.6) million at 1Q26 and US$(396.9) million at 2Q25.
- Working capital improved US$(184.3) million during 2Q26 because of sales-related pre-downpayments.
- Contract liabilities were US$3,738.6 million excluding Eve, up US$299.7 million sequentially and US$423.7 million year-over-year.
- Net cash provided by operating activities was US$447.4 million.
- Net cash used in investing activities was US$(67.7) million.
- Net cash used in financing activities was US$(310.1) million.
- Embraer invested US$120.8 million on a stand-alone basis; Eve invested US$30.2 million; consolidated investment was US$151.0 million.
- The company had an undrawn US$1.0 billion Revolving Credit Facility.
- Eve cash was US$403.2 million and Eve gross debt was US$312.3 million at 2Q26.
Analysis
Embraer delivered a strong second quarter, with revenue reaching US$2,235.3 million, an all-time high for a second quarter and +23% above 2Q25. Each operating business grew revenue year-over-year. Defense & Security increased +38%, Executive Aviation rose +32%, Services & Support grew +24%, and Commercial Aviation increased +8%. Aircraft deliveries rose +7% to 65, while the firm order backlog reached a record US$34.5 billion and was more than 16% higher year-over-year.
Profitability improved materially. Reported EBIT was US$285.8 million with a +12.8% margin, compared with US$179.5 million and a +9.9% margin in 2Q25. Adjusted EBIT was US$296.9 million and the Adjusted EBIT margin was 13.3%, versus 10.5% a year earlier. Executive Aviation and Defense & Security expanded margins, while Commercial Aviation experienced gross-margin and Adjusted EBIT-margin declines tied to customer mix and legacy contracts. Services & Support faced materials inflation and U.S. tariff pressure on gross margin but expanded Adjusted EBIT margin with an extraordinary tax credit.
The reported margin result included an extraordinary US$68 million tax credit, while U.S. import tariffs totaled US$8 million during the quarter. The company stated that Adjusted EBIT margin would have been +10.6% in 2Q26 excluding both tariffs and the extraordinary tax credit. Adjusted net income was US$218.6 million, compared with US$158.0 million a year ago, and net income attributable to Embraer shareholders was US$212.6 million. Lower net financial expenses and stronger operating performance supported the year-over-year increase in adjusted net income.
Cash generation was a central feature of the quarter. Adjusted free cash flow w/o Eve was US$401.0 million, supported by stronger operating performance, sales-related pre-downpayment inflows, and the extraordinary tax credit. Contract liabilities excluding Eve increased US$299.7 million sequentially to US$3,738.6 million, while working capital excluding Eve improved US$(184.3) million. Embraer's stand-alone net cash position improved sequentially by US$315.6 million to US$(214.5) million, driven by a US$79.8 million cash increase and a US$(235.8) million reduction in gross debt.
Management maintained 2026 delivery targets and consolidated revenue guidance of US$8.2 to US$8.5 billion. It raised Adjusted EBIT margin guidance to 10.0% - 10.6% from 8.7% - 9.3% and raised free-cash-flow guidance to US$400 million or higher from US$200 million or higher. The company attributed the circa US$110 million increase in the midpoint of implied 2026 Adjusted EBIT guidance to US$68 million from an extraordinary tax credit, US$38 million from exemption of direct U.S. import tariffs in 2H26, and US$4 million from an improved business outlook.
Not in the filing
stated, not guessed- A consolidated GAAP gross-margin figure was not reported.
- A consolidated GAAP gross-margin prior-year comparison was not reported.
- A consolidated GAAP gross-margin prior-quarter comparison was not reported.
- 2026 guidance for gross margin, operating expenses, and tax rate was not reported.
- Segment revenue prior-quarter comparisons and sequential revenue changes were not reported.
- A separate previous-release outlook section was not provided for formal actual-versus-prior-guidance comparisons.
- Named executive quotations were not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.