BA Q4 2025 Earnings Analysis

There really is, Alex. But before we get into the nitty-gritty, I need to share our standard disclaimer: This podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

They really are! Boeing reported $23.9 billion in quarterly revenue – and get this – that's their highest quarterly total since 2018. Revenue was up a massive 57% year-over-year. For the full year, they hit $89.5 billion, up 34%.

It's really a combination of higher commercial deliveries and better operational performance across the board. They delivered 600 commercial aircraft for the year – again, the most since 2018. The 737 MAX program delivered 447 planes, while the 787 contributed 88 deliveries.

Exactly. Core earnings per share came in at $9.92, but here's the thing – $11.83 of that was from selling their Digital Aviation Solutions business for about $10.6 billion. Strip that out, and you're looking at underlying operations that are still losing money, but improving significantly from the prior year.

I thought his tone was really measured. He said "we haven't fully turned the corner, but we're making real progress." That feels honest – they're not overselling the recovery. He highlighted their four-point plan: stabilize the business, execute on development programs, change the culture, and build for the future.

Yes, but it's a mixed bag. The 737-10 got approval for its final phase of certification flight testing, which is progress. They still expect both the 737-7 and 737-10 to get certified in 2026. For the 777X, they're sticking with first delivery in 2027, though they did mention a potential engine durability issue they're working through with GE.

This is where it gets really interesting. They generated positive free cash flow of $375 million in Q4 and used $1.9 billion for the full year – but that was actually better than expected. More importantly, CFO Jay Mollave guided to positive free cash flow of $1 billion to $3 billion for 2026.

Oh absolutely. Mollave walked through what he called "legacy issues" that are weighing on cash flow. The biggest one is the 777X program, which won't start delivering until 2027, so they're spending cash to build planes but not getting the full payment from customers yet. He said that program alone will be a higher cash use in 2026 than 2025.

Right, and "excess advances" where they've already taken customer cash for planes they haven't delivered yet. These are both legacies of the production problems and MAX grounding from years past. Mollave said when you adjust for all these temporary issues, the underlying business would generate "high single-digit" billions in free cash flow.

They're sticking with that $10 billion annual free cash flow goal, though Mollave was careful to say it's "very attainable" rather than guaranteed. When pressed by analysts about whether they could exceed $10 billion given higher production rates, he basically said "let's get to $10 billion first, then we'll talk about going higher."

They did. There was a $565 million charge on the KC-46 tanker program, which was disappointing. But Ortberg explained this was mainly about keeping higher levels of quality and engineering support in the factory longer than planned. It's essentially an investment in stability and quality – expensive, but probably necessary given their quality issues.

That's huge – Ortberg called it a "transformational win." Their defense backlog hit a record $85 billion, which provides a nice stable foundation. They're also seeing some encouraging operational improvements, like a 33% increase in output on their PAC-3 seeker program.

That closed at year-end, and it's expected to be a $1 billion drag on free cash flow in 2026 as they integrate operations. But strategically, Ortberg seems to view this as essential for controlling their supply chain and quality issues going forward.

The 737 MAX is currently at 42 per month and they're planning to go to 47 later this year. Longer term, they want to get to 52 per month, but that's the tricky one because that's where they'll really need their supply chain to step up performance. The 787 is at 8 per month, targeting 10 later this year.

Ortberg sounded confident about the near-term increases but acknowledged that getting from 47 to 52 MAX aircraft per month will be challenging, particularly for the supply chain. That's where having Spirit in-house could help, since Spirit had major issues hitting those rates back in 2018.

I think this earnings call showed a company that's genuinely making progress but still has significant challenges ahead. The revenue growth is real, the production increases are happening, and they seem to be getting their quality act together. But they're still burning cash when you look at underlying operations, and they have years of legacy issues to work through.

Agreed. Everything discussed is AI-generated analysis for educational purposes. Past performance doesn't guarantee future results. Please do your own due diligence.