Embraer’s $26.4 Billion Backlog: A New High for Brazil’s Aerospace Titan

Embraer’s first-quarter 2025 results marked a historic milestone: its total backlog surged to $26.4 billion, surpassing the previous record of $26.3 billion set in Q4 2024. This 25% year-over-year growth underscores the São Paulo-based aerospace giant’s resilience as it navigates a fragmented market, driven by surging demand for business jets and defense contracts.

A Diversified Engine of Growth

Embraer’s backlog expansion isn’t uniform—it’s fueled by uneven but strategic performance across its four core segments:

1. Executive Jets: The standout performer, with a 66% YoY increase in backlog to $7.6 billion, driven by the Phenom 300 series, which remains the world’s best-selling light jet for the 13th consecutive year. Deliveries rose 28% YoY, with 23 jets handed over in Q1, reflecting a 15% midpoint growth target for 2025.

2. Commercial Aviation: A 10% YoY decline to $10.0 billion, as supply chain constraints limited production. Despite this, key orders from American Airlines (90 E175s) and Azul (51 E195-E2s) underpin its position in regional markets.

3. Defense & Security: Held steady at $4.2 billion, backed by orders for 32 KC-390 Millennium and 22 A-29 Super Tucano aircraft. Pending deals with Sweden, Slovakia, and Portugal signal further upside if finalized.

4. Services & Support: Maintained a robust $4.6 billion, benefiting from long-term agreements like a new contract with Airlink.

The Executive and Defense segments now account for 46% of the total backlog, marking a strategic pivot toward higher-margin markets.

Deliveries and Delivery Challenges

Embraer delivered 30 aircraft in Q1, a 20% increase over the same period in 2024. This outperformed the 5-year historical average (11% of annual guidance in Q1), hitting 13% of the midpoint of its 2025 target of 222–240 deliveries.

Yet Commercial Aviation remains a bottleneck: only 7 aircraft were delivered in Q1, unchanged from 2024, as supply chain issues stalled production. The company admitted to missing 2 deliveries due to “commercial issues,” likely tied to customer financing or contractual delays.

The Bigger Picture: Why This Matters for Investors

The record backlog provides multi-year revenue visibility, with the average order in the pipeline spanning 3–5 years. This stability is critical as Embraer aims to reduce its reliance on volatile commercial markets.

Key Catalysts Ahead:
- ANA Holdings’ 15 E190-E2 order (plus 5 options) could boost Commercial Aviation’s backlog if finalized.
- Pending defense contracts from Sweden, Slovakia, and Portugal (totaling ~$1.5 billion) could push the backlog higher in 2025.
- Production leveling initiatives targeting Commercial Aviation bottlenecks, with improvements expected in Q2.

Risks to Consider

• Supply chain constraints remain a wildcard for Commercial Aviation, which still accounts for 38% of revenue.
• Competition in the executive jet market from Gulfstream and Bombardier could pressure margins.
• Geopolitical risks in defense markets, such as delays in international orders.

Conclusion: A Strong Foundation, But Challenges Remain

Embraer’s $26.4 billion backlog is a testament to its ability to capitalize on niche markets. The Executive Jets division’s dominance and Defense segment’s stability have offset Commercial Aviation’s struggles, creating a diversified revenue stream. With pending orders and production improvements on the horizon, the company is well-positioned to sustain growth.

Investors should focus on execution: Can Embraer resolve supply chain issues to meet delivery targets? Will high-margin segments continue to outpace headwinds? The backlog’s 25% YoY growth is a strong start, but the path to sustained profitability hinges on these factors.

For now, Embraer’s record backlog signals a company in transition—one leveraging its strengths in business jets and defense to carve out a leadership position in an evolving aerospace landscape.