Airbus Se (OTC) ((EADSY)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Airbus SE’s recent earnings call painted a picture of robust growth tempered by ongoing challenges. The company reported strong revenue growth and a significant order backlog, buoyed by strategic initiatives in the European space sector and a credit rating upgrade. However, the sentiment was not entirely positive, as Airbus faces hurdles such as negative free cash flow, tariff impacts, engine supply issues, and adjustments in the A220 ramp-up trajectory.
Increase in Revenues
Airbus reported a notable increase in revenues for the first nine months of 2025, reaching EUR 47.4 billion, a 7% rise compared to the previous year. This growth was driven by stronger services volumes and higher deliveries, highlighting the company’s successful operational strategies.
Strong Order Backlog
The company secured 610 gross orders in the same period, bringing its backlog to an impressive 8,665 aircraft. This robust demand, particularly for the A320 and A350 families, underscores Airbus’s strong market position and future growth potential.
Strategic European Space Collaboration
Airbus announced a strategic move by signing an MOU with Leonardo and Thales to establish a new European space player by 2027. This collaboration aims to achieve mid-triple-digit synergies, marking a significant step in Airbus’s expansion into the space sector.
Positive Financial Performance
The company’s financial performance was strong, with EBIT adjusted increasing to EUR 4.1 billion from EUR 2.8 billion in the same period of 2024. This improvement was driven by favorable hedge rates and enhanced performance across various divisions.
Credit Rating Upgrade
In a testament to its financial health, Airbus received a credit rating upgrade from Moody’s to A1 with a stable outlook. This upgrade reflects the company’s strong credit management and solid balance sheet.
Negative Free Cash Flow
Despite the positive financial indicators, Airbus reported a negative free cash flow of EUR 0.9 billion before customer financing. This was primarily due to planned inventory buildup and delayed deliveries, posing a challenge for the company’s cash management.
Impact of Tariffs
Airbus is also facing the impact of tariffs, which are expected to cost between EUR 100-200 million for the full year 2025, with most of the impact anticipated in the fourth quarter.
Engine Supply Challenges
The company continues to grapple with engine supply challenges, particularly with narrow-body engines like LEAP and GTF. These issues have resulted in 32 gliders by the end of September, affecting production schedules.
A220 Ramp-Up Adjustment
Airbus has adjusted its A220 ramp-up trajectory, now targeting a production rate of 12 in 2026 instead of the previously planned rate of 14. This adjustment will impact the timeline for achieving breakeven.
Forward-Looking Guidance
Looking ahead, Airbus has maintained its 2025 guidance despite current challenges. The company aims to deliver around 820 commercial aircraft by year-end and achieve an EBIT adjusted of approximately EUR 7 billion. Free cash flow before customer financing is expected to be around EUR 4.5 billion. Airbus plans to reach an A320 family production rate of 75 per month by 2027 and continue its strategic initiatives, including the formation of a new European space player.
In conclusion, Airbus SE’s earnings call reflects a company in robust health, with strong revenue growth and strategic initiatives paving the way for future success. However, challenges such as negative cash flow and supply chain issues remain hurdles to overcome. Investors and market watchers will be keenly observing how Airbus navigates these challenges while capitalizing on its strengths.