Boeing (BA -4.22%), the aerospace manufacturer known for its commercial airplanes and defense products, reported its Q2 2025 results on July 29, 2025. The company posted GAAP revenue of $22.7 billion, topping analyst expectations of $22.1 billion (GAAP), and reported a core loss per share (Non-GAAP) of ($1.24), also beating the expected ($1.40). Order growth and improved delivery volumes helped drive the results, though the period still ended with a net loss and negative free cash flow. The quarter showed continued progress for Boeing’s operational recovery, though material risks around cash flow and global market challenges remain.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | ($1.24) | ($1.40) | ($2.90) | 57.2% |
| Revenue (GAAP) | $22.7 billion | $22.1 billion | $16.87 billion | 34.8% |
| Operating Margin (GAAP) | (0.8 %) | (6.5 %) | 5.7 pp | |
| Free Cash Flow (Non-GAAP) | ($0.2 billion) | ($4.3 billion) | 95.3% (improvement) | |
| Revenue – Commercial Airplanes | $10.9 billion | $6.0 billion | 81.2% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Boeing's Business Overview and Recent Focus
Boeing is a global aerospace and defense company that designs, manufactures, and services commercial airplanes, military aircraft, satellites, and related systems. Its business is divided into three core segments: Commercial Airplanes (passenger and cargo jets), Defense, Space & Security (military jet fighters, trainers, and unmanned aircraft), and Global Services (maintenance, spare parts, and pilot training).
Recently, Boeing focused sharply on increasing the reliability of its production lines, improving product quality, and rebuilding trust with both customers and regulators. Key areas for business success include remaining competitive with other aerospace companies, especially Airbus and Lockheed Martin, passing rigorous safety and environmental standards, managing a complex global supply chain, and resolving labor and regulatory challenges. Order growth and delivery momentum are viewed as critical markers for recovery, alongside progress in cash flow and backlog.
Quarter Highlights: Financial and Operations Review
During the quarter, Boeing delivered 150 commercial airplanes in Q2 2025, a 63 % increase compared to the same period last year. This delivery growth was led by higher volumes across several product types, including 104 737 narrow-body jets, 24 787 wide-body aircraft, and a combined 22 deliveries from the 767 and 777 families. Revenue in the Commercial Airplanes segment climbed 81% to $10.9 billion, with the segment booking 455 net orders, including major new contracts with Qatar Airways for the 787 and 777-9, and British Airways for the 787-10.
The Defense, Space & Security segment grew 10% to $6.6 billion in revenue. Key program activity in the quarter included U.S. Air Force orders for T-7A Red Hawk trainer jets, as well as continued progress on the MQ-25 Stingray unmanned refueling aircraft. Margins in this business swung back into positive territory, moving from a loss of (15.2)% in Q2 2024 to a gain of 1.7% in Q2 2025.
Global Services, which supports commercial and military customers with spare parts, maintenance, and training services, Global Services grew revenue 8% to $5.3 billion compared to Q2 2024. Operating margin rose to 19.9%, up 2.1 percentage points, reflecting favorable performance and mix. During the quarter, Boeing completed the sale of its Gatwick maintenance facility and signed new deals, such as a training systems contract for the Korean Navy.
One-time items weighed on results, notably a $445 million charge tied to a settlement with the U.S. Department of Justice. Cost control and operational improvements helped cut the net loss (GAAP) to $612 million, from $1,439 million the year prior. Free cash flow (non-GAAP) improved meaningfully, with outflows dropping to ($0.2 billion) compared to a ($4.3 billion) outflow in Q2 2024. Total company backlog rose to $619 billion, up from $521 billion at year-end 2024, anchored by over 5,900 commercial airplane orders. Across all segments, backlog and order book growth positioned Boeing for future revenue even as some risks remained around China deliveries and input tariffs.
Business Operations and Strategic Context
In Commercial Airplanes, the 737 jet family—single-aisle, short- to medium-range aircraft popular with airlines globally—achieved a higher production rate, reaching 38 per month. The 787, a wide-body model used for long-haul routes, is now at a production rate of 7 per month. Companywide, traveled work (incomplete manufacturing steps moved from station to station) and rework hours dropped sharply—down over 50% and 25%, respectively, on the 737 line from before the September 2024 strike through Q1 2025, which management linked to a new "travel ready" process and a more disciplined factory approach. These process improvements gave the U.S. Federal Aviation Administration (FAA) greater oversight via digital dashboards and frequent progress reviews.
Management emphasized that regulatory compliance remained a top concern. The company maintained open communication with agencies like the FAA and responded to past incidents by investing in both cultural and technical changes. The company reported no significant labor disruptions in the quarter, but acknowledged ongoing risks.
On the supply chain side, Boeing held higher-than-normal inventory levels as a buffer against potential disruptions, such as the Jenkintown fastener plant fire. Efforts were highlighted to help suppliers adapt to new tariff environments. As most input costs for aircraft manufacturing are in U.S.-sourced aluminum and steel, the direct net effect of tariffs was estimated at less than $500 million per year, as discussed in management's 2025 plan, which the company described as manageable for its scale.
Balance sheet and liquidity improved with ongoing debt paydown—total debt declined by $0.3 billion to $53.3 billion—and cash and marketable securities closed the quarter at $23.0 billion. This will provide a further cash cushion without significant near-term impact on Services margins or operational capabilities.
Outlook and What to Watch Ahead
Management reiterated its focus on achieving higher, stable production rates for both 737 and 787 jets through the end of FY2025. Plans remain to seek regulatory approval for monthly rate increases—targeting 42 per month for the 737 later this year, followed by incremental increases if performance metrics remain stable. Any new rate adjustments will proceed only after regular review of key production indicators with the FAA. The company does not expect demand reductions and believes any excess planes built for China can be remarketed globally. Ongoing discussions with Chinese customers and global trade authorities continue, but uncertainty around tariffs and geopolitics may still impact quarterly results.
The company cited increased deliveries and cash proceeds from portfolio divestitures as likely drivers of improvement. Risks remain around regulatory compliance, labor relations, and global supply chain disruptions. Investors should monitor progress in production rates, delivery volumes, backlog conversion, China-related order flow, and the status of tariff and regulatory processes in the coming quarters.
BA does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
