Airbus Se (OTC) ((EADSY)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Airbus SE’s Latest Earnings Call Reflects Mixed Sentiment Amid Growth and Challenges
The recent earnings call for Airbus SE presented a mixed sentiment, highlighting positive momentum in orders and revenue growth, particularly in the Defense & Space and Helicopters divisions. However, the company faces significant challenges with engine suppliers and the impact of glider aircraft on cash flow. Despite notable achievements, ongoing supply chain issues and negative cash flow remain hurdles to overcome.
Strong Commercial Momentum
Airbus demonstrated strong commercial momentum in the first half of 2025, securing 494 gross orders, including 240 orders and commitments announced at the Paris Air Show. This impressive performance increased the backlog to 8,754 aircraft, showcasing robust demand for Airbus’s offerings.
Revenue Increase
The company reported a revenue increase to EUR 29.6 billion in H1 2025, marking a 3% rise year-on-year. This growth was primarily driven by higher contributions from various divisions and stronger services volumes, reflecting the company’s ability to capitalize on market opportunities.
Defense & Space Growth
Revenues in the Defense & Space sector surged by 17% year-on-year to EUR 5.8 billion, driven by higher volumes across all business lines. This growth underscores Airbus’s strong position in the defense sector and its ability to expand its market share.
Helicopters Performance
The Helicopters division saw an increase in deliveries to 138 units in H1 2025, with revenues rising approximately 16% to EUR 3.7 billion. This performance highlights the division’s robust growth and the increasing demand for Airbus’s helicopter offerings.
U.S. Dollar Coverage
Airbus implemented USD 7.7 billion of new coverage at a blended rate of $1.14, with the total U.S. dollar coverage portfolio standing at $81.4 billion. This strategic financial move helps mitigate currency risks and stabilize financial performance.
Glider Aircraft Issue
The absence of engines resulted in 60 glider aircraft by the end of June 2025, adversely affecting financial results. Airbus plans recovery efforts in the second half to address this issue and improve cash flow.
Negative Free Cash Flow
The company reported a negative free cash flow before customer financing of EUR 1.6 billion in H1 2025, impacted by inventory buildup and high levels of gliders. This situation highlights the financial strain caused by supply chain disruptions.
Challenges with Engine Suppliers
Airbus continues to face challenges with engine suppliers, particularly for the A320 family, with ongoing tensions involving CFM and Pratt & Whitney. These issues have led to backloaded deliveries, affecting overall production timelines.
Defense & Space Performance
Despite growth, the Defense & Space sector’s performance in Q2 was largely due to non-repeating charges from 2024. This indicates that underlying issues are still being addressed, requiring ongoing attention from the company.
Forward-Looking Guidance
During the earnings call, Airbus maintained its 2025 guidance, despite the challenges in the supply chain, particularly with engine deliveries. The company delivered 306 commercial aircraft in the first half of 2025, with an EBIT adjusted at EUR 2.2 billion and a negative free cash flow before customer financing of EUR 1.6 billion. Airbus reiterated its targets of approximately 820 commercial aircraft deliveries, an EBIT adjusted of around EUR 7 billion, and free cash flow before customer financing of about EUR 4.5 billion for 2025, contingent on resolving supply chain disruptions.
In summary, Airbus SE’s earnings call presented a mixed outlook, with strong commercial momentum and revenue growth countered by significant challenges in the supply chain and cash flow issues. The company remains optimistic about meeting its 2025 targets, but the resolution of engine supply issues will be crucial for achieving these goals.