Financial Data and Key Metrics Changes - The company reported a cash position of $123.4 million at the end of Q3 2025, which has slightly decreased to $117 million as of the current date [17] - Full-year guidance for spending is maintained at $110 million to $125 million, which is 75% below main competitors [17] - Anticipated spending over the next 12 months is projected to be $235 million [17] Business Line Data and Key Metrics Changes - The company is focused on the piloted transition flight as a critical milestone in the VX4 development and certification program [6][7] - The VX4 aircraft design features a passenger cabin that is 70% larger than competitors, with a cockpit that is 50% larger and a luggage compartment that is 200% larger [11] - The ability to scale from four to six passengers allows operators to increase revenue by 50% and significantly improve margins [12] Market Data and Key Metrics Changes - The company has one of the industry's largest and globally diversified order books, with a unique competitive advantage due to partnerships with tier-one global lessors [21] - The defense market in Europe is expected to see increased budgets, with the company in direct dialogue with major governments regarding potential aircraft procurement [29] Company Strategy and Development Direction - The company aims to conclude a partnership with a global strategic player and significantly grow its order book [21] - Manufacturing strategy includes a phased approach with plans for facilities in the U.S., Europe, and Asia to meet increasing demand [35][38] - The company is focused on maintaining a lean and cost-effective model by sourcing parts from tier-one aerospace manufacturers [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving certification by the second half of 2028, emphasizing a transparent and rigorous certification process [56][60] - The company is actively engaging with potential strategic partners to support its ramp from certification to commercialization [23][24] - Management highlighted the importance of passenger comfort and operator profitability as key drivers for long-term commercial success [10] Other Important Information - The company received design organization approval in 2023, affirming regulatory confidence in its engineering and development processes [9] - The piloted transition flight is expected to be completed within weeks, marking a significant step in the certification timeline [18] Q&A Session Summary Question: Status of aircraft three production and hybrid powertrain development - Management confirmed that aircraft three production is on track for completion in early December and that hybrid powertrain development is also progressing as planned [26] Question: Manufacturing strategy and potential partnerships - The company is pursuing a prudent approach to manufacturing, with plans for three facilities by the middle of the next decade and discussions with the U.K. government regarding major facilities [34][38] Question: Opportunities in the defense market - Management indicated strong interest from European governments in the aircraft, with expectations of securing the first order in 2026 [29] Question: Clarification on funding from the U.K. government - The company is part of a government initiative to link Oxford and Cambridge, with plans to demonstrate capabilities over the next 12 months [46] Question: Non-dilutive funding opportunities - Management confirmed that there are opportunities for non-dilutive funding in the defense sector, particularly as negotiations with governments progress [76] Question: Aircraft capabilities for defense customers - The aircraft's silent takeoff and landing capabilities, along with low noise and thermal signatures, are expected to be highly attractive to military customers [78]

Financial Data and Key Metrics Changes - Revenue increased by 30% to $23.3 billion, driven by improved operational performance, higher commercial deliveries, and defense volume [18] - Free cash flow was positive at $238 million, marking the first positive free cash flow quarter since Q4 2023 [18][19] - Core loss per share was $7.47, primarily reflecting a $4.9 billion charge related to the 777X program [18] Business Line Data and Key Metrics Changes - Boeing Commercial Airplanes (BCA) delivered 160 airplanes in the quarter, the highest quarterly delivery total since 2018, with revenue up nearly 50% to $11.1 billion [20] - BCA's operating margin was negative 48.3%, impacted by the charge on the 777X program [20] - Defense business (BDS) delivered 30 aircraft and two satellites, with revenue growing 25% to $6.9 billion and an operating margin of 1.7% [25] - Global Services (BGS) revenue increased by 10% to $5.4 billion, with an operating margin of 17.5% [28] Market Data and Key Metrics Changes - The backlog ended at $535 billion, including over 5,900 airplanes, with strong demand across all market segments [20][30] - BDS booked $9 billion in orders during the quarter, with a record backlog of $76 billion [25][28] Company Strategy and Development Direction - The company is focused on safety and quality improvements, with a commitment to culture change and operational excellence [4][15] - Plans to increase 737 production to 42 airplanes per month were agreed upon with the FAA, with future rate increases to be methodical and based on stability [5][21] - The company is investing in expanding its South Carolina site to meet exceptional market demand for the 787 program [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery trajectory, highlighting positive feedback from customers regarding quality and delivery performance [16][17] - The company acknowledged challenges with the 777X certification process, leading to a revised delivery timeline to 2027 [10][24] - Management remains optimistic about the overall market demand and the strength of the backlog, which exceeds $600 billion [30] Other Important Information - The company is undergoing significant cultural changes, with employee feedback shaping new values and behaviors [15][16] - The company is managing through a strike affecting its workforce while maintaining production rates [13] Q&A Session Summary Question: What is the negative cash flow in 2026 on the 777X? - Management expects a headwind of about $2 billion in 2026, with a gradual improvement towards break-even cash flow by 2028 [32][33] Question: What changed regarding the 777X program? - The delay is due to underestimating the work required for TIA approvals, not due to new issues with the airplane itself [39][41] Question: How will the supply chain be managed given the 777X delay? - The revised schedule will be communicated to suppliers, and negotiations will occur on a case-by-case basis [53] Question: Can you elaborate on the 737 ramp-up? - The company plans to exit the year at a 42 per month rate, with future increases being methodical and based on stability [58][60] Question: What is the status of the 737 MAX 7 and MAX 10 certifications? - The critical path remains the engine anti-ice design, with expectations for certification in 2026 [66][67] Question: What are the plans for the 787 production rate increases? - The next increase will be from eight to ten per month, with challenges anticipated in the supply chain, particularly regarding seat certifications [71][72] Question: What is the outlook for free cash flow in 2026? - Management is optimistic about operational performance, with expectations for a modest inflow of cash in 2026 [76][77] Question: Is the $10 billion free cash flow target still valid? - Management is confident in the underlying cash generation capability but is still assessing the long-term framework [81][82]

Financial Data and Key Metrics Changes - Revenue increased by 30% to $23.3 billion, driven by improved operational performance, higher commercial deliveries, and defense volume [18] - Free cash flow was positive at $238 million, marking the first positive free cash flow quarter since Q4 2023 [18] - Core loss per share was $7.47, primarily reflecting a $4.9 billion charge related to the 777X program [18] Business Line Data and Key Metrics Changes - Boeing Commercial Airplanes (BCA) delivered 160 airplanes, the highest quarterly total since 2018, with revenue up nearly 50% to $11.1 billion [19] - BCA's operating margin was negative 48.3%, impacted by the 777X charge [19] - Defense, Space & Security (BDS) delivered 30 aircraft and two satellites, with revenue growing 25% to $6.9 billion and an operating margin of 1.7% [25] - Global Services (BGS) revenue increased by 10% to $5.4 billion, with an operating margin of 17.5% [27] Market Data and Key Metrics Changes - The backlog ended at $535 billion for BCA, including over 5,900 airplanes, with strong demand across all market segments [19] - BDS secured $9 billion in orders, with a record backlog of $76 billion [25] - BGS received $8 billion in orders, maintaining a year-to-date book-to-bill ratio of 1.2 [27] Company Strategy and Development Direction - The company is focused on safety and quality improvements, with a commitment to culture change and stakeholder trust [4][5] - Plans to increase 737 production to 42 airplanes per month, with future rate increases contingent on stability and readiness [5][6] - The 777X program has been delayed, with first delivery now expected in 2027, leading to a $4.9 billion non-cash charge [8][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery trajectory, highlighting positive cash flow and improved operational performance [17][30] - The company is aware of the challenges ahead, particularly in commercial development and certification programs [5][10] - Management emphasized the importance of maintaining a disciplined approach to production rate increases [7][52] Other Important Information - The company is investing in expanding its South Carolina site to meet market demand for the 787 program [8] - The FAA has granted Boeing limited delegation authority to issue airworthiness certificates for some 737 MAX and 787 airplanes [30] Q&A Session Summary Question: What is the negative cash flow in 2026 on the 777X? - The expected cash flow usage in 2026 is about $2 billion, with a gradual improvement anticipated in subsequent years [32][33] Question: What changed regarding the 777X program? - The delay is due to underestimating the work required for TIA approvals, not due to new issues with the airplane [36][37] Question: How will the supply chain be managed given the 777X delay? - The revised schedule will be communicated to suppliers, and negotiations will occur on a case-by-case basis [42][46] Question: Can you provide insight on the 737 ramp-up? - The company plans to exit the year at a 42 per month rate, with future increases requiring at least six months of stability [48][52] Question: What is the status of the 737 MAX 7 and MAX 10 certifications? - Certification is progressing, with the engine anti-ice design being the critical path [56] Question: What are the expectations for free cash flow in 2026? - The company anticipates a break-even or low to mid-single-digit inflow of cash in 2026 [64] Question: Is the $10 billion free cash flow target still valid? - The company is confident in its cash generation capabilities and aims to return to historical levels, but specific long-term targets will be assessed later [70][71] Question: What are the priorities for M&A? - The focus is on closing the Jeppesen and Spirit AeroSystems transactions, with no immediate additional M&A plans [74]

Summary of The Boeing Company Conference Call Company Overview - The discussion revolves around The Boeing Company, a major player in the aerospace and defense industry, with insights from CEO Kelly Ortberg. Key Points Leadership and Culture - Kelly Ortberg has been CEO for over a year, facing challenges such as macro dynamics, equity raises, and tariff environments [4][5] - Focus on improving company culture by enhancing leadership visibility and changing incentive programs to foster collaboration [5][6] - Implementation of a new performance management system to align employee behavior with company values [6][7] - Positive feedback from customers, indicating a cultural shift within the organization [6][7] Demand and Pricing Environment - Boeing benefits from U.S. trade agreements, with significant aircraft orders from airlines like Qatar Airways and British Airways [10][11] - Demand remains strong, but pricing is influenced by supply constraints and inflationary pressures in the supply chain [11][12] Production and Delivery Updates - Production of the 737 MAX has stabilized at 38 units per month, with plans to increase to 42 units pending FAA approval [13][14] - Inventory levels are high, which will help buffer against supply chain challenges during rate increases [17][18] - Future production increases are planned, with a target of 47 units per month as supply chain aligns [18][19] Aircraft Certification Progress - Certification for the 737 MAX 10 and 737 MAX 7 is ongoing, with a focus on engine design [21][22] - The 787 program is set to increase production from 7 to 8 units, with a goal of reaching 10 units next year [23][24] - The 777X program faces certification delays, but demand remains strong [30][34] Defense Sector Developments - Leadership changes in Boeing Defense, with a focus on stabilizing operations and improving margins [35][36] - Tentative agreements reached with union leadership to mitigate impacts from strikes [39][40] Financial Outlook - Free cash flow for 2025 is projected to be negative $3 billion, with expectations of improved cash flow in 2026 [41][42] - The company aims to prioritize debt reduction and maintain investment-grade status [53] Portfolio Management - Ongoing evaluation of the portfolio, with potential for further divestitures to focus on core business [52] - Emphasis on managing risks in fixed-price contracts to improve profitability [36] Future Focus - The CEO plans to shift focus towards development and certification processes to enhance efficiency [57] - Excitement about upcoming rate increases and achieving parity with competitors like Airbus [59] Additional Insights - The company is committed to maintaining high-quality production while ramping up delivery rates [20][50] - The cultural transformation is seen as a multi-year process, with ongoing efforts to align the organization towards common goals [7][55]

Financial Data and Key Metrics Changes - The company is focusing on stabilizing its business and ramping up production lines after facing near-term challenges, including a strike [7] - The backlog is strong, with no challenges in that area, but the main focus is on ramping up production and delivering on that backlog [12] - The company expects to move from negative to positive cash flow in the second half of the year, driven by increased production rates [22][99] Business Line Data and Key Metrics Changes - The production rate for the 737 MAX is currently capped at 38 per month, with plans to increase to 42 per month after achieving stability [14][22] - The 787 production is set to increase from five to seven per month, with recent improvements in supply chain stability [50][52] - The company is also ramping up production for the 777X, with certification expected to be completed by the end of the year [62] Market Data and Key Metrics Changes - The Middle East market is identified as a significant opportunity for both defense and commercial sectors, with a record wide-body order from Qatar [9][11] - The company is actively managing new orders while being sold out through the 2030s, indicating strong demand [13][41] Company Strategy and Development Direction - The company is committed to restoring its iconic brand and stabilizing its production system, focusing on quality and safety [8][106] - There is a strategic emphasis on increasing production rates across various aircraft models to meet market demand [14][41] - The company is also investing in infrastructure to support future production increases beyond current capabilities [60][90] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a dynamic environment regarding tariffs and trade, but remains optimistic about managing through these challenges [15][20] - The company is focused on improving quality and reducing defects, with a reported 30% decrease in quality defects on the 737 MAX line [38] - Management emphasizes the importance of stabilizing production and achieving positive cash flow as key milestones for the company's recovery [102] Other Important Information - The company is working on certification for the 737 MAX variants, with critical path testing expected to complete soon [47] - There are ongoing challenges with seating interiors that are causing delivery delays, particularly for new configurations [54][56] - The company is divesting non-core assets while focusing on strengthening its core business segments [96] Q&A Session Summary Question: How is the company managing new orders given the sold-out status? - The company is managing a planned skyline for orders, with customers getting in line as production rates increase [13] Question: What is the current status of the 737 MAX ramp-up? - The company is close to achieving the 38 per month production rate and plans to increase to 42 once stability is confirmed [22][25] Question: How does the company view the impact of tariffs? - The company has identified a less than $500 million impact from tariffs, primarily on imports from Japan and Italy, but remains optimistic about managing through these challenges [15][17] Question: What is the outlook for the defense segment? - Management believes that risks in fixed-price development programs are being managed better, and there is confidence in restoring historical margin performance [80][82] Question: How is the company addressing quality issues? - Significant improvements have been made in quality, with a reported 30% reduction in defects on the 737 MAX line, and management is focused on maintaining these improvements [38][106]