Boeing posts third-quarter loss, free cash flow and record backlog amid defense orders

Boeing said it delivered a third-quarter financial update marked by a sizable accounting loss and only limited free cash generation, while simultaneously reporting a record backlog that climbed to $745 billion. The company attributed the quarter’s results to a weaker commercial delivery mix, higher projected costs tied to future production rate adjustments, and supply chain cost estimates. In defense, Boeing pointed to stronger volume and a one-time gain tied to the sale of HRL Laboratories, plus new U.S. military awards including work related to a next-generation fighter program.

For the quarter ended in September, Boeing reported revenue of $24.2 billion. On a GAAP basis, the company posted loss per share of $0.26, and on a “core” basis excluding certain items it reported a core loss per share of $0.34. Boeing said operating cash flow totaled $1.5 billion, while non-GAAP free cash flow was $0.5 billion. The company also noted that operating cash flow reflected working-capital timing, partially offset by Department of Justice settlement payments of about $0.7 billion.

Boeing’s backlog reached a record $745 billion at quarter end, a figure it linked to both ongoing defense and services activity and commercial order flow. The company said it continues to pursue “Lean” and disciplined execution, a reference to process improvement efforts aimed at reducing waste and stabilizing delivery performance. Chief executive Kelly Ortberg said recent milestones, including certification of the 737-7 and 737-10 and selection to design and build the Navy’s sixth-generation fighter aircraft, were steps toward progress, but emphasized that Boeing remains focused on safety and quality.

Cash and liquidity remained a bright spot relative to earnings volatility. Boeing reported cash and investments in marketable securities of $20.7 billion, compared with $20.0 billion at the beginning of the quarter, helped by cash flow generated during the period. The company said it maintains access to $10.0 billion of credit facilities, which were undrawn, underscoring its ability to fund operations while transitioning between commercial production rate changes.

In its Commercial Airplanes segment, Boeing reported third-quarter revenue of $10.7 billion and an operating margin of negative 6.5 percent. The company attributed the profitability pressure to a less favorable delivery mix, higher projected costs associated with future production rate adjustments, and higher estimated supply chain costs. Boeing also pointed out that third-quarter 2025 operating margins had been affected by a charge on the 777X program.

Boeing said it continues to progress toward stabilized 737 production of 47 aircraft per month. During the quarter, the 737-7 received amended type certification from the Federal Aviation Administration, and the 737-10 received certification in October. The 787 program remained stable at a production rate of 8 per month. For the 777X, Boeing said the program advanced on 777-9 certification flight testing and remains on track for its first delivery in 2027.

In Defense, Space and Security, Boeing reported third-quarter revenue of $7.9 billion and operating margin of 6.2 percent. The company said margin performance reflected a $252 million gain on the sale of HRL Laboratories and improved operational performance. Boeing also highlighted defense awards during the quarter, including selection by the U.S. Navy for a contract to design, build and deliver the F/A-XX next-generation fighter aircraft. Boeing said the order is not yet included in backlog pending completion of the source selection and evaluation review process. Separately, Boeing received a seven-year contract award to expand PAC-3 Seeker production, and the segment’s backlog grew to a record $101 billion, with 23 percent representing orders from customers outside the U.S.

Boeing’s Global Services segment posted third-quarter revenue of $5.6 billion, with operating margin of 18.3 percent, which the company said reflected favorable volume and mix. Boeing said Global Services captured a U.S. Army maintenance contract for the AH-64 Apache fleet, and ended the quarter with services backlog of $33 billion.

Boeing’s release also reiterated how it frames certain results. It supplemented GAAP reporting with non-GAAP measures, including “core” operating earnings and non-GAAP free cash flow. The company described non-GAAP free cash flow as operating cash flow reduced by property, plant and equipment capital expenditures, calling it a measure of cash available after required investments for ongoing business and longer-term value creation. Still, the disclosure leaves room for interpretation around how investors should weigh GAAP losses versus core and free cash flow metrics, and the company did not provide segment-by-segment guidance in the release.

Looking ahead, investors and customers will likely focus on whether commercial profitability stabilizes as Boeing moves from delivery mix and cost estimates toward more predictable production rates. On the defense side, attention may turn to whether Boeing’s F/A-XX work is formally reflected in backlog as the Navy’s pending review concludes. Boeing’s next quarterly update will also be important to see whether operating cash flow and free cash flow remain resilient despite settlement-related cash timing and continued capital spending on sites such as Charleston and St. Louis.