Skip to content
    BA
    Earnings call· Dec 2025(Q4 FY25)

    BOEING CO BA

    Jan 27, 2026 Source

    Executive summary

    The Boeing Company Q4 FY25 — Strong Commercial Deliveries and Record Backlog

    Boeing made significant progress in Q4 FY25, marked by increased commercial deliveries and record backlogs, setting a strong foundation for its turnaround plan. While challenges remain with development programs and cash flow, the company is focused on operational stability, cultural change, and disciplined execution to achieve its 2026 goals and long-term financial targets. The recent acquisition of Spirit AeroSystems aims to further improve safety and quality across the supply chain.

    Highlights

    5

    • Delivered 600 commercial airplanes in 2025, the highest annual total since 2018.

    • Booked over 1,100 commercial orders for the year, one of the highest order totals ever.

    • Total backlog reached a record-setting $567 billion, including over 6,100 airplanes.

    • Q4 FY25 revenue was $23.9 billion, up 57% YoY, the highest quarterly total since 2018.

    • BGS achieved $28 billion in annual orders for 2025, ending the year with a record backlog of $30 billion.

    Concerns

    4

    • KC-46A Tanker program incurred a $565 million loss in Q4 FY25 due to higher production support and supply chain costs.

    • 777X program net cash burn is expected to be higher in 2026 than 2025, turning positive only in 2029 due to delayed certification and deliveries.

    • Free cash flow for FY25 was a usage of $1.9 billion.

    • Expected Q1 FY26 free cash flow usage similar to Q1 FY25 due to normal seasonality.

    Guidance & targets

    16
    CategoryTargetConfidence
    737-7 and 737-10 Certification
    Certification in 2026
    high materiality
    High
    777X First Delivery
    No impact to 2027 delivery
    high materiality
    High
    FY26 Free Cash Flow
    Positive
    high materiality
    High
    FY26 Free Cash Flow
    $1 billion to $3 billion
    high materiality
    High
    Spirit AeroSystems Incorporation Impact on FY26 Free Cash Flow
    Unfavorable impact of roughly $1 billion
    medium materiality
    High
    FY26 Capital Expenditures
    Closer to $4 billion
    medium materiality
    High
    Q1 FY26 Free Cash Flow
    Usage similar to first quarter of 2025
    medium materiality
    High
    H1 FY26 Free Cash Flow
    Use of cash with the second half turning positive and accelerating sequentially
    medium materiality
    High
    777X Net Cash Flow
    Turning positive in 2029
    high materiality
    High
    Impact of Customer Considerations and Excess Advances
    Improve over the next few years
    medium materiality
    High
    Cash Impact of BDS Charges
    Sequential improvement from 2025 to 2026 and gradual improvements thereafter
    medium materiality
    High
    Long-term Free Cash Flow Target
    $10 billion
    high materiality
    High
    FY26 737 Deliveries
    Around 500 aircraft
    high materiality
    High
    FY26 KC-46A Deliveries
    19 tankers
    medium materiality
    High
    FY26 787 Deliveries
    90 to 100 aircraft
    high materiality
    High
    FY26 BCA Deliveries Growth
    Approximately 10%
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    BCA (Boeing Commercial Airplanes)
    Revenue and operating margin improved materially due to better operational performance and higher commercial deliveries. Margin was impacted by approximately 1.5 points from the Spirit AeroSystems acquisition. Backlog includes 737 and 787 sold firm into the next decade.
    Deliveries: 160 airplanes (Q4)Deliveries: 600 airplanes (FY25)Net Orders: 336 (Q4)Net Orders: 1,173 (FY25)Backlog: $567 billionBacklog Airplanes: over 6,100
    		$11.4 billionimproved materially—-5.6%
    BDS (Boeing Defense, Space & Security)
    Revenue grew due to improved operational performance and higher volume. Operating margin improved significantly but was tempered by a $565 million loss on the KC-46A tanker program. Backlog grew to a record $85 billion.
    Orders: $15 million (Q4)Backlog: $85 billion
    		$7.4 billion37%—-6.8%
    BGS (Boeing Global Services)
    Revenue growth primarily reflected improved government volume. Adjusted revenue and operating margin (excluding Digital Aviation Solutions gain) were $5.1 billion and 18.6% respectively. Both commercial and government businesses delivered double-digit margins. Achieved an 18% flow reduction on C-17 Sustainment Program. Ended the year with record backlog.
    Orders: $10 billion (Q4)Orders: $28 billion (FY25)Backlog: $30 billion
    		$5.2 billion2%—18.6%

    Operational metrics

    23
    Revenue
    $23.9 billionup 57% YoY
    Q4 FY25

    Highest quarterly total reported since 2018.

    Revenue
    $89.5 billionup 34% YoY
    FY25

    Primarily reflecting the improved operational performance across the business.

    Core Earnings Per Share
    $9.92
    Q4 FY25

    Primarily reflects $11.83 gain associated with closing the Digital Aviation Solutions divestiture.

    Core Earnings Per Share
    $1.19up significantly YoY
    FY25

    Primarily driven by $12.47 gain on the Digital Aviation Solutions sale and improved performance. Excluding the impact of the gain, EPS was up $9.10 YoY.

    Cash and Marketable Securities
    $29.4 billion
    Q4 FY25

    Primarily due to $10.6 billion in proceeds associated with closing the Digital Aviation Solutions transaction, partially offset by debt repayment of $3 billion.

    Total Debt
    $54.1 billionslightly up from last quarter
    Q4 FY25

    Primarily reflecting the retained Spirit debt.

    Revolving Credit Facilities Access
    $10 billion
    Q4 FY25

    All facilities remain undrawn.

    Capital Expenditures
    $3 billion
    FY25

    Capex ramped up over the second half as expected.

    737 Production Rate
    42 airplanes
    Q4 FY25

    Stabilizing at this rate.

    737 On-time Delivery Performance
    improved threefoldcompared with previous year
    FY25

    Compared to previous year.

    787 Average Rework Hours Reduction
    nearly 30%
    FY25

    Reduced during 2025.

    787 Production Rate
    8 per month
    Q4 FY25

    Stabilizing at this rate.

    737-8 Built Prior to 2023 Inventory
    1 airplanedown 5 from prior quarter
    Q4 FY25

    Expected to deliver this final shadow factory airplane in Q1 FY26.

    737-7 and 737-10 Inventory Levels
    approximately 35 airplanes
    Q4 FY25

    Stable.

    787 Built Prior to 2023 Inventory
    approximately 5 airplanesdown 5 from last quarter
    Q4 FY25

    Expected to deliver remaining airplanes in 2026.

    777X Inventory Spend
    nearly $3.5 billion
    FY25

    In line with expectations.

    KC-46A Tanker Program Loss
    $565 million
    Q4 FY25

    Driven by higher BCA production support and other allocated costs in Everett facility, as well as higher estimated supply chain costs including Spirit.

    KC-46A Tanker Deliveries
    14 tankers
    FY25

    Delivered in 2025.

    Average Factory Rework Levels
    decreased by 20%compared to H1 FY25
    Q4 FY25

    Example of progress from investments.

    PAC-3 Seeker Program Output Increase
    33%
    FY25

    Enabled by prior investments in capacity and focus on lean.

    Adjusted Organic Growth
    6%
    FY25

    On an adjusted basis.

    Adjusted Operating Margin
    18.6%
    Q4 FY25

    Adjusted for Digital Aviation Solutions gain.

    C-17 Sustainment Program Flow Reduction
    18%
    FY25

    Achieved over the course of 2025 as a result of nearly 200 discrete projects.

    Industry KPIs

    8
    MetricValueDetails
    Total company backlog$567 billionUSD
    Defense program awards15KC-46A Tankers
    Program segment backlog$567 billionUSD
    Aftermarket services split6%%
    Unit deliveries by program600airplanes
    Production rates by program42per month
    Program margins eac charges$565 million lossUSD
    Production capacity expansionnew North Line

    Orderbook & backlog

    12
    Total Commercial Backlog$567 billionQ4 FY25

    record-setting

    Includes over 6,100 airplanes, with 737 and 787 sold firm into the next decade.

    Total BDS Backlog$85 billionQ4 FY25

    grew to a record

    Total BGS Backlog$30 billionQ4 FY25

    record

    737 Net Orders1,173FY25

    one of highest order totals ever

    Includes 105 737-10 and 5 787-9 for Alaska Airlines (Q4).

    787 Net Orders395FY25

    highest annual order total for the program

    777X Net Orders202FY25

    second highest annual total since program's launch

    Includes 65 777-9 for Emirates (Q4).

    737-10 Net Orders105Q4 FY25

    For Alaska Airlines.

    787-9 Net Orders5Q4 FY25

    For Alaska Airlines.

    777-9 Net Orders65Q4 FY25

    For Emirates.

    BDS Orders$15 millionQ4 FY25

    Includes 15 KC-46A Tankers from the U.S. Air Force and 96 Apaches from Poland.

    BGS Orders$10 billionQ4 FY25
    BGS Orders$28 billionFY25

    annual high

    Product announcements

    1
    ProductTypeDetails
    New Unified E-commerce Platformlaunch

    Deals & partnerships

    9
    Spirit AeroSystemsAcquisition of a key supplier to improve safety and quality across factories, operations, and supply chain.$3 billion debt repayment

    Completed before year-end. Integration plans in place for smooth transition.

    UnnamedSale of Digital Aviation Solutions business, retaining essential digital capabilities.$10.6 billion proceeds

    Successfully completed, solidifying the balance sheet.

    UnnamedBoeing's largest ever commercial component services deal.

    Secured by BGS.

    U.S. governmentContract to support C-17 modernization.

    Received in Q4 FY25 as part of BGS's highest orders ever in 2025.

    U.S. NavyMQ-25 successfully completed its inaugural engine run, moving closer to first flight.

    Key milestone in the program.

    U.S. Air ForceDelivered the first operational T-7A Red Hawk.

    Delivered at Joint Base San Antonio-Randolph.

    NASAModified commercial crew contract to better align long-term objectives.

    Partnered with NASA.

    U.S. Air ForceAwards for 15 KC-46A Tankers.

    Booked in Q4 FY25.

    PolandAwards for 96 Apaches.

    Booked in Q4 FY25.

    Capital programs

    4
    737 North Line Expansion (Everett)underway

    Benefit: Supports production above 47 airplanes per month.

    Facility and tooling investments are complete, and a deliberate staffing plan is being executed to support production there.

    787 Factory Expansion (Charleston)underway
    Start: Last year (groundbreaking)

    Benefit: Supports higher rates beyond 10 per month.

    Breaking ground on factory expansion to support higher rates and meet the exceptional demand for the 787.

    PAC-3 Seeker Production Line Investmentcompleted
    Start: Prior to FY25

    Benefit: Increased output by 33% in 2025.

    Investments made ahead of contract to increase PAC-3 production line.

    F-47 Investmentunderway

    Benefit: Key part of win strategy for U.S. Air Force sixth-generation fighter.

    Invested ahead of contract, significant investments made at risk. Finishing this investment is a major capital investment in the defense portfolio.

    Risks & headwinds

    9
    KC-46A Tanker Program Cost OverrunsQ4 FY25

    $565 million loss in Q4 FY25

    Mitigation: Increased resources to ensure on-time deliveries (19 planned for 2026 vs 14 in 2025); focus on repricing follow-on contracts for profitability.

    777X Certification Delays and Cash BurnFY26-FY29

    Higher net cash use in 2026 than 2025; net cash flow not positive until 2029.

    Mitigation: Progressing through flight testing with FAA; ensuring production and delivery system is ready for ramp-up and systematic change incorporation.

    737 and 787 Prior Delivery Delays (Customer Considerations & Excess Advances)Next few years

    Significant negative impact on free cash flow, aggregate of bridge items (excluding DOJ) is $6B-$7B.

    Mitigation: Production stability and continuous improvement in on-time delivery; seeking to better manage delay exposure in new contracts with tighter underwriting standards.

    Cash Impact of Running Off Prior BDS ChargesFY26 and beyond

    Expected to improve sequentially from 2025 to 2026 and gradually thereafter.

    Mitigation: Successfully completing programs without additional charges; leveraging active management to de-risk programs.

    Increased Capital ExpendituresFY26

    $4 billion in FY26 (up from $3 billion in FY25)

    Mitigation: Closely managing investments to drive budget and schedule performance.

    777X Engine Durability IssueCurrent

    Potential issue identified during recent inspection.

    Mitigation: Working with GE to understand root cause and corrective action; not expected to impact 2027 delivery.

    Geopolitical Volatility and Tariff RiskDynamic, ongoing

    discussed_not_quantified

    Mitigation: Working with U.S. administration, which is supportive of the industry; monitoring trade barriers to avoid tit-for-tat environments.

    737 MAX Production Rate Ramp (47 to 52) Supply ChainBeyond current year

    discussed_not_quantified

    Mitigation: Diligently working with supply chain; Spirit AeroSystems acquisition helps guide the ramp.

    787 Seat IssuesOngoing for "a little while"

    discussed_not_quantified

    Mitigation: Working through certification programs with EASA and FAA for new seat configurations.

    What to watch in Q1 FY26

    5

    737 Production Rate

    Next quarter
    Current42 airplanes per month
    TargetStability at 42, readiness for 47

    Why it matters

    Demonstrates operational execution and ability to meet delivery targets, crucial for cash flow.

    On 737, production is stabilizing at 42 airplanes per month and we're continuing to see improvement in the program as its on-time delivery performance has improved threefold compared with the previous year. As we look to move to higher rates, we use the same process as previous rate breaks, monitoring factory health and following our safety and quality plan.

    Q&A highlights

    6

    Quantify the impact and duration of excess advances and customer considerations on free cash flow.

    Jay Malave stated the aggregate impact of these items is in the low to high single-digit billions ($6B-$7B). Excess advances will burn down quicker than customer considerations. The 777X cash burn will be higher in 2026, turning positive in 2029. BDS cash impact will improve from 2025 to 2026. Improvement is predicated on delivery plans and production rates.

    “The excess advances over time actually will burn down quicker than what we expect on the consideration. So that will take a little bit longer to burn down on the 737 and 787 considerations.”

    asked by Myles Walton · answered by Jesus Malave

    2 min read5 chapters

    Detailed Narrative

    01

    Commercial Production Ramp-up and Quality

    Boeing methodically increased commercial production in 2025, delivering 600 airplanes, the highest since 2018. The 737 production is stabilizing at 42 airplanes per month, with plans to increase to 47 later in the year, supported by a new North Line in Everett for rates above 47. The 787 program is stabilizing at rate 8 per month, with a target to reach 10 airplanes per month later this year, backed by factory expansion in Charleston. These ramps are guided by a safety and quality plan, including simplifying over 5,100 work instruction documents and reducing 787 rework hours by nearly 30% in 2025.

    02

    Development Program Progress

    The 737-10 recently gained TIA2, expanding flight testing for avionics, propulsion, and auto flight. Certification for both 737-7 and 737-10 is still anticipated in 2026, pending FAA approval of design changes for engine anti-ice issues. The 777-9 received TIA3 approval, focusing on avionics and environmental control systems, with first delivery planned for 2027 despite a potential durability issue identified in a recent engine inspection.

    03

    Defense Business Stabilization

    The defense business secured a transformational win for the U.S. Air Force's sixth-generation fighter and achieved key milestones like the MQ-25's inaugural engine run and the delivery of the first operational T-7A Red Hawk. Despite a $565 million charge on the KC-46A Tanker program in Q4 FY25 due to higher production support and supply chain costs, operational performance trends are encouraging, with 14 tankers delivered in 2025 and 19 planned for 2026. The PAC-3 seeker program increased output by 33% in 2025 due to prior capacity investments.

    04

    Spirit AeroSystems Acquisition and Integration

    The acquisition of Spirit AeroSystems was completed before year-end, reinforcing efforts to improve safety and quality across the supply chain. This integration is seen as crucial for guiding capacity growth, particularly for the 737 program's rate ramps, and is expected to contribute to productivity and higher quality performance over time⏳. The acquisition is expected to have an unfavorable impact of roughly $1 billion on FY26 free cash flow.

    05

    Cash Flow Outlook and Legacy Issues

    Boeing expects positive free cash flow of $1 billion to $3 billion in FY26, with a long-term target of $10 billion. This outlook is influenced by temporary impacts from delayed 777X certification (higher cash burn until 2029), customer considerations and excess advances from prior 737/787 delivery delays, and the cash impact of running off prior BDS charges. Capital expenditures are expected to increase to $4 billion in 2026 to support growth and production stability.

    AI-generated summary of the company’s earnings call. Not investment advice.