Embraer Closes 2024 with Record Revenues and Growth Across All Divisions
Embraer reported significant financial and operational growth for 2024, reaching revenues of $6.395 billion, a 21% increase year-over-year (YoY), positioning itself at the high end of its guidance. The fourth quarter alone contributed $2.311 billion, with Defense & Security standing out, growing by 40% YoY.
The company’s adjusted operating profit (EBIT) reached $708.2 million in 2024, with an 11.1% margin. Excluding the impact of the Boeing arbitration, adjusted EBIT stood at $558.2 million, with an 8.7% margin, exceeding the company's forecast.
Embraer ended the year with an adjusted free cash flow of $675.6 million, supported by higher aircraft deliveries, strong sales performance, and the Boeing arbitration outcome. As a result, the company reduced its net debt to $110.7 million, closing the year with a net debt-to-EBITDA ratio of 0.1x, down from 1.4x in 2023. In December, Moody’s upgraded Embraer’s credit rating from “Ba1” to “Baa3” with a stable outlook, meaning that all three major U.S. rating agencies now classify the company as investment grade.
Performance by Business Units
Commercial Aviation
Embraer’s commercial aviation division generated $981 million in revenue in Q4, a 31% increase YoY, driven by a higher number of aircraft deliveries. The company delivered 73 commercial aircraft in 2024, including 47 E2s and 26 E1s. Gross margin improved from 8.0% to 12.5%, benefiting from a strong customer mix and operational leverage. Adjusted EBIT margin rose from 4.5% to 8.5%, despite the absence of last year’s one-time tax credits.
Executive Aviation
The executive aviation segment reported $626 million in revenue in Q4, a 4% increase YoY. However, gross margin declined from 20.7% to 16.8%, due to a shift in product mix and lower volumes as part of the company’s production leveling strategy to balance deliveries throughout the year. Adjusted EBIT margin decreased from 15.7% to 10.3%, reflecting these factors and the absence of last year's tax credit benefits. On a full-year basis, the segment grew by 11.7%, compared to 9.0% in 2023.
Defense & Security
The defense and security unit posted $233.4 million in revenue, marking a 15% YoY increase, driven by A-29 Super Tucano deliveries. Gross margin jumped from 13.9% to 28.3%, due to a stronger KC-390 customer mix and higher A-29 volumes, following the percentage-of-completion accounting method. Consequently, adjusted EBIT margin rose from 2.8% to 17.5%, reflecting this gross margin expansion.
Services & Support
The services and support segment generated $441.1 million in revenue, a 14% increase YoY, fueled by higher fleet utilization and ramp-up in OGMA’s GTF engine production. Despite a slight decline in gross margin from 30.1% to 29.4%, adjusted EBIT margin improved from 16.7% to 17.4%, supported by royalties and insurance-related one-time gains.
Other Businesses
This category includes agricultural aviation (Ipanema), cybersecurity division Tempest, and other businesses. Revenue declined by 8% YoY, from $32.6 million to $30 million, due to lower cybersecurity volumes and unfavorable foreign exchange rates affecting Ipanema aircraft pricing in BRL.
Outlook for 2025
For 2025, Embraer projects deliveries of 77 to 85 commercial aircraft and 145 to 155 executive jets. The company expects total revenue between $7.0 billion and $7.5 billion, an adjusted EBIT margin of 7.5% to 8.3%, and adjusted free cash flow of at least $200 million.
The company closed the year with a record-breaking firm order backlog of $26.3 billion in Q4, representing a 40% YoY increase and a 16% rise quarter-over-quarter (QoQ).
AUTOR
Contando la aviación desde marzo del año 2000. Fundador y Managing Editor de Aviacionline.
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