Earnings Call Insights: The Boeing Company (BA) Q4 2025
Management View
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President and CEO Robert Ortberg stated, “we’ve set the foundation for our turnaround with stronger performance and record-breaking backlogs across our businesses,” emphasizing ongoing progress but noting, “we haven’t fully turned the corner.” Ortberg highlighted the delivery of 600 airplanes and securing more than 1,100 commercial orders for the year, characterizing this as “one of our highest order totals ever.”
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Ortberg noted, “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.” He announced plans for higher production rates, including adding a new North Line in Everett and expanding the Charleston site for the 787, targeting a rate of 10 per month later this year.
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Ortberg revealed a “transformational win to build the U.S. Air Force sixth generation fighter” and the completion of the Spirit AeroSystems acquisition, which is expected to “reinforce our efforts to improve safety and quality throughout our factories, operations and supply chain.”
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Executive VP of Finance & CFO Jesus Malave stated, “Revenue was $23.9 billion, the highest quarterly total reported since 2018. Revenue was up 57%, primarily driven by improved operational performance across the business, including higher commercial deliveries and defense volume.” Malave added, “Free cash flow was positive $375 million, slightly higher than the expectations I shared last month, driven by higher commercial deliveries and working capital that improved compared to both the prior year and the prior quarter.”
Outlook
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Malave provided guidance for 2026: “we expect positive free cash flow of $1 billion to $3 billion, aligned with the expectations I shared last month. For clarity, this outlook contemplates an unfavorable impact of roughly $1 billion in 2026 associated with incorporating Spirit.”
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Management expects capital expenditures to reach “closer to $4 billion this year, including the incorporation of Spirit.”
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The outlook assumes “first quarter free cash flow will be a usage similar to first quarter of 2025, driven by normal seasonality,” and that “the first half of 2026 to be a use of cash with the second half turning positive and accelerating sequentially.”
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Management stated, “we continue to believe the $10 billion free cash flow mark is very attainable, including impacts of the Spirit acquisition.”
Financial Results
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Malave reported, “BCA delivered 160 airplanes in the quarter and 600 for the year, the highest annual total since 2018. Revenue of $11.4 billion and operating margin of negative 5.6% both improved materially and primarily reflect better operational performance and higher deliveries compared to last year’s results.”
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Backlog ended at a record-setting $567 billion, and BCA booked 1,173 net orders for the year.
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BDS delivered 37 aircraft in the quarter, with revenue up 37% to $7.4 billion. The segment recorded an operating margin of negative 6.8%, impacted by a $565 million loss on the KC-46A tanker. BDS backlog reached a record $85 billion.
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BGS revenue was $5.2 billion, with an adjusted operating margin of 18.6%. BGS orders totaled $10 billion in the quarter, contributing to a record $30 billion year-end backlog.
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Cash and marketable securities stood at $29.4 billion, with a debt balance of $54.1 billion.
Q&A
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Myles Walton, Wolfe Research: Asked about the duration and normalization of excess advances and customer considerations. Malave answered that “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.”
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John Godyn, Citi: Queried if normalized free cash flow could be higher than $10 billion. Malave replied, “I went through this in the fourth quarter. I’m very comfortable with our ability to achieve $10 billion… if you’re asking me, can we be above 10%, I think the potential of our cash flow supports to be above 10%.”
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Douglas Harned, Bernstein: Asked about bottlenecks in production ramps and Spirit AeroSystems integration. Ortberg responded, “I actually don’t think supply chain is going to be a big challenge for us in the next rate ramp from 42 to 47. But that’s where we start to normalize with the supply base in terms of burning off the excess inventory.”
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Sheila Kahyaoglu, Jefferies: Inquired about BCA margins and Spirit’s impact. Malave stated, “Right now, 737, 787 cash margins are depressed, and that’s reflected in our free cash flow… we don’t believe over time, that, that’s going to materially impact what we believe and what we need to deliver on these types of cash flows.”
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Peter Arment, Baird: Requested 2026 delivery expectations. Malave guided, “Our expectation for deliveries on that program is around 500 aircraft” for the 737, and “anywhere between 90 to 100 aircraft” for the 787.
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Seth Seifman, JPMorgan: Queried defense program charges and future outlook. Ortberg clarified, “the charge we took on the tanker in this quarter doesn’t really reflect at all on any of the other BDS programs. It’s a discrete charge against that particular program.”
Sentiment Analysis
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Analysts focused on cash flow normalization, production ramps, and program-specific risks, with a neutral to slightly pressing tone, frequently probing about the sustainability of improvements and timing of cash flow recovery.
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Management maintained a confident and methodical tone in prepared remarks, while in Q&A, responses showed readiness to address specifics but occasionally hedged on timing and quantification, using phrases such as “we need to continue to see stability” and “as things potentially change, these could change as well.”
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Compared to the previous quarter, both management and analysts maintained a constructive but cautious optimism, with the current call showing more specificity in cash flow targets and integration plans.
Quarter-over-Quarter Comparison
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Guidance language became more specific, with a defined 2026 free cash flow range and explicit mention of Spirit’s integration costs.
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Strategic focus shifted toward executing on production ramp-ups and integrating Spirit AeroSystems, compared to prior emphasis on certification delays and supply chain resilience.
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Analysts remained focused on cash flow, margin recovery, and program execution, similar to the previous quarter, but pressed for greater detail on normalization timelines and quantifiable impacts.
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Key metrics such as commercial deliveries, backlog, and segment revenues all showed improvement, with management expressing increased confidence in meeting long-term targets, while still acknowledging remaining challenges.
Risks and Concerns
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Management cited ongoing risks related to delayed certification and first delivery on the 777X, customer considerations and excess advances on the 737 and 787, and the integration of Spirit AeroSystems.
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Malave noted that “customer considerations for prior delays are not diminishing the pricing levels we are applying to new business” and highlighted that improvement depends on “production stability and continuous improvement in on-time delivery.”
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The KC-46A tanker program continues to pose risk, with a $565 million charge in the quarter, driven by higher production support and supply chain costs.
Final Takeaway
Boeing management emphasized that 2025 set a strong foundation, citing record commercial orders, delivery improvements, and backlog growth, while providing a clear 2026 free cash flow outlook of $1 billion to $3 billion despite anticipated headwinds from the Spirit AeroSystems acquisition. The company signaled ongoing investment in commercial production, a disciplined approach to program execution, and a commitment to achieving normalized free cash flow above $10 billion as operational improvements and integration efforts mature.