EMBJ Stock Q2 2026: Embraer Earnings - A $110M Raise With $4M Of Business

Embraer (EMBJ) Q2 2026 — Q2 2026 (quarter ended June 30; the 6-K cleared EDGAR 06:19 ET Monday August 10, BEFORE the open, so August 10 IS the reaction session: opened +8.00 pct at USD78.85 and CLOSED just +1.08 pct at USD73.80, then fell to USD71.39 - BELOW the pre-print close - the next day.) Embraer posted its best-ever second quarter - USD2,235.3M of revenue, up 23 pct, 65 aircraft delivered, a record USD34.5B backlog - and lifted 2026 guidance. But its own release splits the ~USD110M increase into USD68M of tax credit, USD38M of tariff exemption and USD4M of improved business. Delivery and revenue guidance never moved. THE CALL: HOLD (3/5, MEDIUM - A GOOD PLANEMAKER ON A FULL PRICE, WITH A BIG SECOND-HALF RAMP TO PROVE) — base-case value ~$68.39 vs ~$75.38 today. KEY METRICS: - CALL: HOLD, 3/5. Fair value USD68.39 per ADS vs the USD75.38 close, -9.3 pct. A probability-weighted 2028 grid: BEAR USD8.9B revenue at 9.0 pct exited at 11.5x = USD41.97; BASE USD10.0B at 10.5 pct at 14.0x = USD67.32; BULL USD11.0B at 12.0 pct at 16.0x = USD96.97. Weighted 25/50/25, net debt USD123.6M off each, discounted 2 years at 10 pct. - THE ANGLE - A USD110M RAISE WITH USD4M OF BUSINESS IN IT: Embraer's own release attributes the increase to the 2026 adjusted EBIT midpoint to (a) USD68M from an extraordinary tax credit, (b) USD38M from the exemption of direct US import tariffs in 2H26 and (c) USD4M from an improved business outlook. That is 96 pct tax and trade policy. Deliveries were reiterated at 80-85 commercial and 160-170 executive jets; revenue was reiterated at USD8.2-8.5B. - THE CLEAN MARGIN WENT DOWN: adjusted EBIT margin printed 13.3 pct against 10.5 pct. Embraer says that ex the USD68M credit and ex the USD8M of tariffs it paid, the margin was 10.6 pct. Do the same to Q2 2025 - add back its USD10.4M of tariffs - and that quarter was 11.1 pct. Revenue grew 23 pct and the underlying operating margin fell about half a point. - THE CASH IS CUSTOMER MONEY: adjusted free cash flow without Eve was USD401.0M, and contract liabilities - non-refundable advances taken before delivery, mainly Defence - rose USD301.2M. Strip that and the quarter is USD99.8M. The half is still MINUS USD46.1M, so the guided USD400M needs USD446.1M in 2H26. Eve used USD117.8M and is excluded. - THE ADS TRAP: 1 ADS = 4 ORDINARY SHARES, proven inside the filing - EPS of USD1.1880 per ADS divided by USD0.2970 per ordinary share is exactly 4.000. Embraer reports in US DOLLARS under IFRS. Our vendor's calendar carries USD1.22 (adjusted net income per ADS) while its income statement carries R$6.24 - reais at an unstated 5.186 rate - and labels neither. - SEGMENTS AND BACKLOG: Executive Aviation revenue USD725M (+32 pct) at a 23.4 pct adjusted EBIT margin, only 16.1 pct ex-credit and ex-tariff. Commercial Aviation revenue USD625M (+8 pct), gross margin down 10.1 to 8.4 pct and EBIT margin down 4.3 to 2.9 pct on legacy contracts. Backlog USD34.5B (+16 pct): Defence +42 pct, Commercial +15 pct, Services +12 pct, Executive just +5 pct. What to watch: UP: a September quarter at 10.0-10.6 pct adjusted EBIT margin with NO tax credit inside it, plus deliveries at the top of the 80-85 commercial guide. DOWN: a fourth-quarter delivery miss, executive-jet backlog still growing at only 5 pct, or the tariff exemption being withdrawn. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.