NEW YORK, August 10, 2026, 11:31 EDT — U.S. equity markets operated as scheduled.
- Embraer S.A. NYSE:EMBJ climbed 5.7% to $77.17 following record revenue in the second quarter.
- Adjusted EBIT totaled $296.9 million, yielding a margin of 13.3%.
- Embraer increased its forecast for the 2026 adjusted EBIT margin to between 10.0% and 10.6%.
- Approximately $106 million of the nearly $110 million guidance increase came from tax and tariff relief.
Embraer American depositary shares climbed 5.7% to $77.17 as of 11:15 EDT on Monday, following record revenue and an increase in profit and cash-flow outlook. The stock moved within a range of $73.80 to $79.90.
The guidance bridge offers a clearer indication for investors. Embraer increased the midpoint of its projected 2026 adjusted earnings before interest and taxes (EBIT) by approximately $110 million.
A $68 million tax credit together with $38 million in direct U.S. tariff exemption benefits make up $106 million, representing 96.4% of the growth. Just $4 million, or 3.6%, was attributed to a stronger business outlook.
| Implied 2026 adjusted EBIT bridge | Benefit | Margin effect | Share of increase |
|---|---|---|---|
| One-off tax credit | $68 million | 80 basis points | 61.8% |
| U.S. tariff exemption (direct) | $38 million | 45 basis points | 34.5% |
| Stronger business outlook | $4 million | 5 basis points | 3.6% |
| Total | About $110 million | 130 basis points | 100% |
The exceptional support did not overshadow a solid operational quarter. Revenue climbed 23% to reach a second-quarter high of $2.235 billion. Adjusted EBIT was up 55%, totaling $296.9 million.
The adjusted EBIT margin was reported at 13.3%, factoring in the tax credit and $8 million in U.S. tariffs paid for the quarter. Embraer said the margin was 10.6% when excluding both items, above the 10.5% margin posted in the same period last year.
| Q2 financial metric | Q2 2026 | Q2 2025 | Year-on-year change |
|---|---|---|---|
| Revenue | $2,235.3 million | $1,819.2 million | +23% |
| Adjusted EBITDA | $355.6 million | $245.5 million | +45% |
| Adjusted EBIT | $296.9 million | $191.8 million | +55% |
| Adjusted EBIT margin | 13.3% | 10.5% | +280 basis points |
| Adjusted net income | $218.6 million | $158.0 million | +38% |
| Basic earnings per ADS | $1.1880 | $0.4283 | +177% |
| Adjusted free cash flow excluding Eve Holding (NYSE:EVEX) | $401.0 million | -$161.6 million | +$562.6 million swing |
Adjusted net income increased by 38% to $218.6 million. Basic earnings per ADS nearly tripled. Adjusted free cash flow, not including Eve, totaled $401 million.
Understanding cash conversion requires context. Embraer stated that prepayments from customers and a tax credit contributed to its free cash flow. The company reported a $299.7 million increase in contract liabilities over the quarter, primarily within its Defense & Security segment.
All main business divisions posted higher sales. Executive Aviation generated the top revenue and margin, while Defense & Security achieved the quickest revenue increase.
| Business unit | Q2 2026 revenue | Year-on-year growth | Q2 2026 adjusted EBIT margin | Q2 2025 margin |
|---|---|---|---|---|
| Commercial Aviation | $625 million | +8% | 2.9% | 4.3% |
| Executive Aviation | $725 million | +32% | 23.4% | 14.5% |
| Defense & Security | $304 million | +38% | 11.9% | 9.2% |
| Services & Support | $565 million | +24% | 18.7% | 15.5% |
Executive Aviation posted an adjusted EBIT margin of 23.4%, factoring in a $60 million tax credit. Without the tax and tariff impacts, the margin was 16.1%. Services & Support accounted for the other $8 million tax benefit.
Commercial Aviation was again the lagging segment. Its adjusted EBIT margin dropped to 2.9%, down from 4.3%. Embraer cited customer mix in legacy agreements as the source of the pressure.
The backlog hit an all-time high of $34.5 billion, marking a 16% increase year-on-year. Embraer handed over 65 aircraft, consisting of 20 commercial jets and 45 executive jets. Total deliveries climbed 7% from 61 aircraft.
“We expect that in 2027 we’ll see a much better performance in terms of production leveling,” Chief Executive Francisco Gomes Neto said during the earnings call. According to him, achieving more consistent production is set to raise both productivity and efficiency on the line. Reuters
Embraer maintained its aircraft delivery and revenue forecasts. The company increased its adjusted EBIT margin outlook by 130 basis points at the midpoint. The firm also doubled its minimum free-cash-flow target.
| 2026 guidance | Updated | Previous | Change |
|---|---|---|---|
| Commercial Aviation deliveries | 80-85 aircraft | 80-85 aircraft | No change |
| Executive Aviation deliveries | 160-170 aircraft | 160-170 aircraft | No change |
| Consolidated revenue | $8.2-$8.5 billion | $8.2-$8.5 billion | No change |
| Adjusted EBIT margin | 10.0%-10.6% | 8.7%-9.3% | Midpoint up 130 basis points |
| Adjusted free cash flow excluding Eve | $400 million or more | $200 million or more | Minimum goal now twice as high |
Prior to the results, analyst coverage was upbeat. According to Embraer’s investor-relations page, 94% of recommendations were Buy, 6% were Neutral, and there were no Sell ratings. The average target price, rounded to $81, represented a premium of roughly 5.0% to the intraday share price.
| Institution | Analyst | Recommendation | EMBJ target | Latest listed update |
|---|---|---|---|---|
| Bank of America Merrill Lynch | Ronald Epstein | Buy | $80 | February 11, 2026 |
| Goldman Sachs | Noah Poponak | Buy | $82 | May 8, 2026 |
| J.P. Morgan | Marcelo Motta | Buy | $80 | May 8, 2026 |
| Morgan Stanley | Kristine Liwag | Buy | $90 | March 9, 2026 |
| Scotiabank | Jorge Gabrich | Buy | $81 | June 8, 2026 |
| UBS | Alberto Valerio | Neutral | $65 | March 26, 2026 |
The targets were set before the August 10 results. The present share price is higher than UBS’s target but remains beneath the other five targets listed. Upcoming updates will indicate if analysts value the operating improvements or focus on the impact from tax credits and tariff relief.
Risks: The majority of the implied EBIT increase is driven by tax and tariff easing. Embraer continues to anticipate approximately $12 million annually in indirect U.S. tariffs. Margins in Commercial Aviation stay limited, and any setbacks in production or an unfavorable product mix could put the existing delivery targets at risk.
The next assessment will be if steady production allows underlying adjusted EBIT margins to remain close to 10.6% once the tax credit is removed.
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