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Guilherme Paiva: Good morning, ladies and gentlemen, and thanks for standing by. As a reminder, this conference is being recorded. Its broadcast is intended exclusively for the participants of this event and may not be reproduced or retransmitted without the express authorization of Embraer. This conference call will be conducted in English, but please let me say a short announcement for Portuguese speakers. [Foreign Language] My name is Gui Paiva, and I'm the Head of Investor Relations, M&A and Venture Capital for Embraer. I want to welcome you to our third quarter earnings conference call. The numbers in this presentation contain non-GAAP financial information to help investors reconcile Eve's financial information in GAAP standards to Embraer's IFRS. We remind you, Eve's results will be discussed at the company's conference call. It is important to mention that all numbers are presented in U.S. dollars as it is our functional currency. This conference call may include statements about future events based on Embraer expectations and financial market trends. Such statements are subject to uncertainties that may cause actual results to differ from those expressed or implied in this conference call. Except in accordance with applicable rules, the company assumes no obligation to publicly update any forward-looking statements. For detailed financial information, the company encourages reviewing publications filed by the company with the Brazilian [Foreign Language] or CVM. [Operator Instructions] Participants on today's conference call are Francisco Gomes Neto, President and CEO of Embraer; Antonio Carlos Garcia, Chief Financial Officer; Pau Cesar Souza, Corporate Communications Manager; and myself. This conference call will have 3 parts. In the first part, top management will present the company's Q3 results. In the second part, we will host a Q&A session only for investors. And last but definitely not least, in the third part, we will host a dedicated Q&A session only for the press. It is my pleasure to now turn the conference call to our President and CEO, Francisco Gomes Neto. Please go ahead, Francisco.
Francisco Neto: Thank you, Gui, and good morning, everyone. It's a pleasure to be here with you to share Embraer's third quarter 2025 results. Embraer is currently experiencing a highly positive phase, a strong indication that our strategy driven by efficiency and innovation is delivering solid results and effectively supporting our sustainable growth. In Commercial Aviation, highlights include new orders for Avelo for 50 E195-E2s plus 50 options and LATAM for 24 E195-E2s plus 50 options. These achievements have increased the division's backlog to $15.2 billion with an impressive 2.7:1 book-to-bill ratio. In Executive Aviation, we achieved an all-time high for third quarter revenues, reaching approximately $580 million. We also celebrated a historic milestone, the delivery of our 2,000th business jets, marking a record for year-to-date deliveries. Our backlog in Executive Aviation now stands at $7.3 billion, supported by a robust 2.4:1 book-to-bill ratio, reflecting continued strong demand for our aircraft. In Defense & Security, we continue to reinforce our global presence. Portugal confirmed the purchase of its sixth KC-390, including additional 10 new options to support future European acquisitions. We also signed new agreements for the A-29 Super Tucano with Panama and Sierra Nevada in the U.S., reinforcing the aircraft's relevance and versatility. The division closed the quarter with a $3.9 billion backlog and 1.3:1 book-to-bill ratio. Our Services & Support business maintained its accelerated growth path with expanding capabilities. We signed a new maintenance agreement with CommuteAir and launched Starlink connectivity solutions for Praetor and Legacy operators. As a result, the business unit finished the quarter with a 4.9 billion backlog and 1.8:1 book-to-bill ratio. At Embraer, continuous improvement is more than a process. It is a mindset. We successfully completed more than 800 Kaizen projects over the past 12 months. And now by combining our lean culture with AI tools, we are moving forward more rapidly in achieving productivity gains. Our production level initiatives and the implementation of our perfect station concept led to a 16% increase in aircraft deliveries this year. From 2026 onwards, we expect even greater production stability in all product lines. The implementation of our zero-defect methodology reducing our cost of poor quality by 12%. Another initiative that has been delivering significant results is the production lead time reduction. We have achieved important improvements such as reducing the production time of Praetor's by 40%, KC-390 by 33% and E-Jets by 27% compared to 2021 levels, more production with lower work in progress. We made significant progress with new and expanded facilities at key locations in the United States and Brazil, including new hangars, painting booth and final assembly areas. These investments are designed to enable higher production volumes and faster deliveries, fully aligned with our growth strategy. At the same time, we are transforming our supply chain through supply chain management 2.0, a comprehensive initiative that integrates digital technologies, proactive risk management and the deployment of artificial intelligence for smarter planning and forecasting. These efforts have already started to pay off. Aircraft deliveries increased by 16% and average shortage decreased by 25% compared to last year. I will now move on to operational results by segment. All figures are based on year-on-year comparisons. In Commercial Aviation, revenues increased a significant 31% because of better product mix and higher volumes and prices. Adjusted EBIT margin improved from minus 4.8% to plus 1.3%, supported by operating leverage and lower other operating expenses. In Executive Aviation, revenues increased 4%, helped by higher prices. Adjusted EBIT margin decreased 4.2 percentage points because of product mix, U.S. important tariffs, 2.6 percentage points and higher costs. Moving to Defense & Security. Revenues grew 27% because of higher KC-390 volumes and a one-off positive contract-related adjustment. Adjusted EBIT margin improved from 7.2% to 12.9% as a consequence of operating leverage and client mix. In Service and Support, revenues rose 16%, driven by higher volumes and the ramp-up of the OGMA GTF engine shop. Adjusted EBIT margin decreased 5 percentage points because of services and materials delays. Before I conclude, I'd like to share a brief update on Eve's steady progress. The first full-scale engineering prototype test flight is planned for late 2025, early 2026. With that, I will now hand it over to Antonio to walk us through the key financial highlights of the quarter.
Antonio Garcia: Thank you, Francisco. Good morning, and good afternoon to everyone. Turning to the quarter. All my comments will be based on year-over-year comparisons unless noted. But before we dive into our financial results for the third quarter of 2025, I'd like to start reiterating our 2025 guidance. We expect to deliver between 77 and 85 aircraft in Commercial Aviation and 145 and 155 in Executive Aviation from an operational point of view. Meanwhile, we expect to achieve between $7 billion and $7.5 billion in revenues, 7.5% and 8.3% in adjusted EBIT margin and more than $200 million in adjusted free cash flow from a financial perspective. This forecast may appear conservative at the first glance, but they reflect the supply chain risks we still face in Q4. Having said that, I'd like to reinforce our estimates reflects our confidence in our operational progress and the resilience of our business model. We remain comfortable with our outlook and feel confident we are on track to meet our full year guidance. That said, let's take a look at our financial results for the quarter. In Slide 12, deliveries -- Embraer delivered 62 aircraft in the third quarter '25. 20 commercial jets and 41 executive jets and 1 KC-390 military plan. This represents a 5% increase compared to the same period last year, with Commercial Aviation deliveries up 25% year-over-year and Executive Aviation is stable. More importantly, for the first 9 months, we have delivered 46 commercial jets, which is 57% of the midpoint of our guidance and 2 percentage points above our 5 years average for the period. In Executive Aviation, we have delivered 102 executive jets or 68% of the midpoint of our guidance and 11 solid percentage points higher than the 57% average from the past 5 years, which demonstrates our strong execution. In Slide 13, backlog and revenue. Our company-wide backlog reached $31.3 billion during the quarter, up a significant 38% and higher than our previous historical record. Looking at each division, Executive Aviation and Service & Support led the pack with their backlogs up 65% and 40%, respectively, followed by Commercial Aviation up 37% and Defense & Security up 8%. I'd like to highlight the significant volumes of purchase options currently held by our customers, which total roughly $20 billion. These are not firming orders yet, but they provide substantial upside potential for our backlog in the next few years, which could increase towards $50 billion. Moving to revenues. Our top line was close to $2 billion for an increase of 18%. For a business perspective, the breakdown appears well balanced. Commercial and Executive Aviation each contributed circa of 30%, followed by Service and Support with 25% and Defense & Security with 14%. Moving to the next slide. We generated $236 million in adjusted EBITDA in the third quarter '25 with an 11.8% margin. Now adjusted EBIT for the quarter was $172 million with an 8.6% margin. This compared to $147 million or 8.7% margin in the third quarter '24, if we exclude the onetime impact of the Boeing agreement, which boosted the adjusted margin by approximately 900 basis points. For the first 9 months of the year, the adjusted EBIT margin stands at 8.6%, a significant improvement of the 2.9% average over the last past 5 years. However, it's important to mention we still expect a relevant impact from U.S. import tariffs, which should weigh on our Q4 margin, along with additional costs related to our return to office initiative. Let's move now to the next slide. Embraer generated $300 million in adjusted free cash flow in third quarter '25. Mainly supported by operating activities, $224 million in EBITDA and lower accounts receivable. Looking now at our investment, excluding Eve, we allocated a total of $99 million during the quarter, slightly lower than last year. The figures includes $39 million in CapEx, $37 million in addition to intangibles, $10 million in the pool program to support new contracts and $13 million in research. Year-to-date, research investments have reached $33 million or 12% of the $284 million in total investment. These resources are focused on supporting sustainable growth and innovation. Slide 16, net income. Let me walk you through the financial bridge from our reported EBIT to both reported and adjusted net income. We started with the quarter with almost $160 million in EBIT. After accounting for $53 million in net financial expenses, $22 million tax credit and $12 million in minority interest, we arrived at $117 million in reported net income, then adjusting for extraordinary items such as $30 million in deferred taxes and $32 million from Eve's results, we get to $54 million in adjusted net income. We closed the quarter with an adjusted margin of 2.7%, a sharp decline from 13.1% last year. I'd like to emphasize this $167 million reduction was mainly driven by the onetime positive impact of $150 million from Boeing agreement recorded last year as well as less favorable net financial results. Looking at the evolution of earnings per share, we have seen solid sequential improvement over the past few years. Our EPS totaled $1.7 per ADS over the past 12 months or substantially higher than negative $0.20 reported in 2021. Let's move to the next slide. First of all, I'd like to start this slide talking about our liquidity position. Embraer's stand-alone net debt position decreased by $646 million to only $439 million in the third quarter of '25 as the company continued to implement its debt liability strategy and reduce its financial gearing. We ended the quarter with a net debt-to-EBITDA ratio of only 0.5x, excluding Eve for a significant improvement from 1.3x a year earlier. It is important to note this, the increase in leverage compared to year-end 2024 is temporary because of the business seasonality. We do expect to finish the year in a net cash position. Our liability management strategy remains focused on extending debt duration and reduce our cost of debt. The average loan maturity is now 5.9 years with 96% of our debt in long-term contracts. To conclude, I'd like to remind you, we announced a new liability management initiative in third quarter '25, which will be fully concluded in November. The company issued $1 billion long 12 years bond at 5.4% coupon, and we will repurchase a total of $809 million from 2028 and 2030 bonds. We will share an updated debt maturity profile and average cost of debt with our full year financials. Slide 18, shareholder remuneration. Before I finish my presentation, I'd like to take a moment to thank our shareholders for their trust and highlight recent developments in our shareholder remuneration initiatives. First, I want to share an exciting milestones. Yesterday, we officially update our ticker symbol to EMBJ, which means Embraer jets to better reflect the company's current strategy and vision for the future. Second, Embraer declared nearly BRL 210 million in interest on equity over the past 2 quarters, which translates into BRL 0.28 per share for a 0.35% dividend yield. Just a quick reminder, this amount may be complemented by a top-up dividend if needed to meet the minimum 25% net income distribution required by Brazilian corporate law. The full amount will be paid in a single installment after our 2026 Annual Shareholders Meeting. With that, I will hand it back to Francisco for his final remarks. Thank you very much.
Francisco Neto: Thank you, Antonio. I'd like to take a moment to reflect on our recent key achievements and share a few final thoughts. In Commercial Aviation, strong E1 sales and the continued consolidation of the E2 platform marked our best sales year. Executive Aviation continues to see robust demand across its entire portfolio, reflecting the strength of our products and customer relationships. In Defense & Security, the KC-390 is gaining traction in key global campaigns, including India and NATO, with Sweden's recent order reinforcing its growing international relevance. Meanwhile, Services & Support continues to expand, highlighted by the groundbreaking of a new MRO facility in the U.S., further strengthening our global footprint. Looking forward, we expect substantial midterm growth while strategically investing in new technologies to prepare the company for a more ambitious and long-term expansion, always grounded in our culture of safety first and quality always. With that, I would like to move on to the Q&A session.
Operator: We remind you again, this conference is being recorded. Its broadcast is intended exclusively for the participants of this event and may not be reproduced or retransmitted without the express authorization of Embraer. We also highlight this conference call is being conducted in English with translation to Portuguese. Please let me say a short announcement for Portuguese speakers. [Foreign Language] [Operator Instructions] The first question comes from Kristine Liwag with Morgan Stanley.
Kristine Liwag: So first, I mean, Antonio, the balance sheet and the financial strength of the company is pretty remarkable, especially with what we saw in 2020 with COVID and all the changes. With the net cash position slated for the company by year-end, I was wondering how you guys think about future return to shareholders, especially if you're not going to build another big R&D cycle, would you consider share buybacks or increasing dividends? How do we think about returns to shareholders?
Antonio Garcia: Thanks, Kristine, for the great question. I was expecting this already. I would say we -- to be honest, we start to repay or resume dividends this end of last year. Now we -- I would say, we are very happy that we are able to do it, point one. Point two, we are evaluating our capital structure is a valid question we are raising right now. We do not have today a firm opinion on how to move forward. I do not see additional dividends at this point in time. We are already paying 25% of the net income of the year, which is already for a heavy intensive business, already a lot. I would say, we do not have a response right now, but we are evaluating further move on this direction in order, for example, buyback is something that's on the table right now to be discussed. But we do not have an answer right now. But we are really taking -- paying attention to this point as well.
Kristine Liwag: Great. And if I could do a follow-up. A few weeks ago, American Airlines announced that they're retrofitting their E-Jets fleet. And to do the overhead bin, I think you guys are doing the work on that. But I was wondering, since they want to do a full interior refresh, is there an expansion of work scope that you can now address, especially as you've increased your services offering? Are you doing the complete retrofit for American? Or are you only doing portions of it? And how do we think about if other airlines in the U.S. decide to also retrofit their fleet with your more expanded services capability, how do you think about that market? And could you capture more of that?
Francisco Neto: Francisco speaking, Kristine, thanks for the question. And well, this is part of our initiative to improve the E175-E1. I mean this first movement to was with the interior and this includes not only the bins, but includes seats, new seats, Recaro seats. This includes the lightning, a new modern lightning and also available a better connectivity for the aircraft. So I mean, yes, we have a program with American Airlines, but this -- I would say, this kit is available for other customers, and we can do it if they want at our new MRO in Dallas.
Operator: The next question comes from Marcelo Motta with JPMorgan.
Marcelo Motta: My question is regarding the EBIT margin on the Executive segment. I mean you commented about the impact of product mix and higher costs. So just wondering when we look at the component of higher cost, if you think this is more structural, it's more like a one-off on this quarter? And then if you could explain also what helped the Defense EBIT margin, that would be great as well.
Guilherme Paiva: Marcelo, this is Gui. Thanks for the question. In Executive Aviation, we have seen like in other business, cost inflation. That's something that has been a trend in the industry for the past few years. And we would expect that to continue. We have been obviously being very resilient in protecting our margins in the business, but we obviously will see some fluctuations on a quarter-to-quarter basis. Regarding Defense, there was an impact on higher KC volumes and just the client mix where we had a higher participation of foreign clients.
Antonio Garcia: And Marcelo, just to complement you in regards to Executive Aviation, please take into account that 1 year ago, we didn't have tariffs. And they have impact in the Executive Aviation margins also the tariffs more is eating up some 2%, 2.5% of our margin in a comparable basis. I would say that explains the deviation as well.
Operator: The next question comes from Lucas Marquiori with BTG Pactual.
Lucas Marquiori: My question is just on the one-offs on the margin as well, especially on Commercial Aviation, just trying to understand what are these tax credits that you guys mentioned you guys had on this Q, I mean, particularly to what they relate to? And how should we think about, I mean, their recurrency going forward? And also on the Defense as well, what exactly is this one-off contract-related adjustment? Is this a change in the contract of a foreign client that helped on the margin? I mean just trying to kind of clear that out.
Guilherme Paiva: Lucas, Gui here. Thanks for the question again. So in Commercial Aviation, the tax credits are related to some import parts that we did a study and we're able to kind of claim these credits, okay? And on Defense, we reassigned a plane in the production to a different client that was already let's call it, halfway in its production. So given that it is a percentage of completion, we recalculate the revenues and the profitability of the contract given that it was already halfway through.
Operator: The next question comes from André Mazini with Citi.
André Mazini: So my question is on the state of the Pratt GTF engines. So the competitor A220 product is having some major issues with the Pratt. We read in a piece of news saying that 17% of the A220 fleet is grounded because of the Pratt GTF. We understand the engines are not the same, right? The A220 uses the PW1500, while the E2 PW1900. But the question is if the PW1900 is indeed having no issues whatsoever. So that's the first one. And the second one, if I may, a totally different topic. This November, of course, the world is looking to Brazil for the COP and the Amazon. So I wanted to ask about an old program, the SIVAM program, the Amazon surveillance system that you guys participated, call it, 25 years ago. The planes from that program were Embraer's 145s. So if there's any renewal program for -- or plan for those planes and the status of the Amazon surveillance systems and Embraer's participation overall?
Francisco Neto: Andre, Francisco speaking. Thanks for your question. So first, start with the E2 GTF. I mean, the E2, I mean, used the third generation of the PW1900G engine, which has incorporated several upgrades and improvements. And on top, the E2 is a lighter, much lighter aircraft compared to the others. So which makes -- which means less demand on the engines. So that's why the E2 has suffered much less than the competition. And now I mean, the engines are getting better and better with new improvements being implemented. So we expect much better performance and durability of the engines going forward for the E2s, which is a good news for the airlines. About this Amazon program, I mean we don't have any project at this point of time with this project. I mean we are working with the Brazilian force in some projects, but not this one as far as I know.
Operator: The next question comes from Andre Ferreira with Bradesco BBI.
Andre Ferreira: I have two here. So first one, going back to the tax credits in Commercial Aviation. We saw BRL 56 million in the quarter, looking at the ITR. So I just wanted to make sure if that is all in the Commercial Aviation segment, which would mean that the tax credits were more or less 1.5% in terms of EBIT -- positive impact on EBIT margin. And also a second point about the tariffs. So the total impact, so adding Executive Aviation and Service was, if I'm correct, $17 million, right? Which seems lower than initial expectations, but there could be some help from inventories here. So you expect a higher impact in the fourth quarter? Or I mean, not just from seasonality, but also even on a more comparable basis. That's it from my side.
Guilherme Paiva: Thanks for the question. This is Gui here. In terms of the tax credits, it's going to be low single-digit value. So it's less than the BRL 56 million that you alluded to. And in terms of -- what's the second question, sorry, on the tariffs. The tariffs in the quarter were $17 million and a total of $27 million year-to-date. We originally mentioned after Q1 results that we expect it to be around $62 million to $65 million for the full year. So that would imply that we still have about $35 million, $38 million to go, but the company has been working hard to reduce its exposure and we hope that we can finish the year under the original amount that we mentioned. And it was -- yes, the inventory cycle has played a role so far.
Antonio Garcia: Just to complement, this one-off is the second question you are getting about the same issue is a normal business as usual. We have temporary importation -- when we have changes in the supply chain here, we get the credit. There's nothing that is something special. It's just part of the daily life here. Just that you guys don't believe is something extraordinary.
Operator: The next question comes from Gabriel Rezende with Itaú BBA.
Gabriel Rezende: I would like to make -- just to touch on the company's guidance, especially on the profitability side. Just wondering how relevant could be the supply chain risks for the fourth quarter as well as the impact from U.S. tariffs that made the company choose to not revise its guidance upwards, especially considering that you have already delivered in the year-to-date figure, this very high EBIT margin, which is already above what you're expecting for the full year. So just trying to understand which one of these effects to be more relevant, either the potential delays on deliveries due to supply chain issues or the U.S. tariffs impact for the fourth quarter?
Francisco Neto: Gabriel, I will answer half of the question, and then Antonio will complement the answer. Well, regarding the supply chain, I mean, the risk for the supply chain in 2025, I mean, is over. I mean we have all the parts we need to assemble the aircraft. Now it's up to us to assemble the aircraft, but we have a concentration of aircraft to be delivered in the next 2 months. That's why we decided to keep the guidance as it is. Again, no risk of with supply chain at this point of time. Now we are working hard to make sure we have a better 2026 in terms of production stability, production level than it was in 2025. About the EBIT, Antonio, do you want to comment?
Antonio Garcia: Just to complement what Francisco is saying, assuming that we will be able to get the aircraft out of the door, I would say we look more from the high end than for the lower end, I would say. As I mentioned in my first comments, we calculated the risk. You could take 0.3% EBIT margin comparing with the 8.6% we have in the last 9 months. If everything goes well, I would say there's nothing that goes against that we may be able to even surpass the high end of the margin. But we need to deliver. There's a lot of aircraft to be delivered to end of December just because of it. And please do not forget our guidance was not contemplated the tariffs. It seems to be conservative, but we were able to offset the guidance. We are still there. And more or less, I would say, looking for the high end and the lower end, I would say, is a remarkable achievement for our company here.
Operator: The next question comes from Lucas Laghi with XP Investments.
Lucas Laghi: I would like to focus on the Services division. I mean we have been seeing this increasing profile of agnostic revenues and acceleration of GTF engines contracts on OGMA. I guess you guys were very clear during the Investor Day on the potential for this top line pocket that you guys are aiming. But could you please elaborate on the profitability profile of this division going forward? I mean should the margins be lower or higher considering this shift in top line new profile towards this agnostic revenues? Just getting to know, I mean, a bit more about profitability given this new profile of revenues? And thinking specifically on the third quarter, I mean, we saw this decline on EBIT margin on Services. We know it's hard to -- I mean, to get all the factors on a quarter-on-quarter basis. But was this related to this different revenue stream, I mean, that you're seeing with this increase in revenues from other sources? Or was it a matter of conjunctural factors as you highlighted in the release, just to clarify on profitability here as well.
Antonio Garcia: Lucas, thanks for the question, Antonio speaking here. I'm going to answer the Q3, and then Francisco is going to complement the long-term view for the margin. What has happened on the Service, we have some bad guys throughout the year, especially also in Q3, means if you delay parts to the customer having to pay -- giving credit or paid peanuts, and then we get the, I would say, liquidate damage from suppliers in Q4. It's just, in my opinion, a time lapse from bad guys to good guys, I would say, we should be fine with the normally 14%, 15% EBIT margin for Services for this year, I would say, around 15%. It's just, I would say, a timing window here between Q3 and Q4.
Francisco Neto: And for the future, Lucas, we -- the Services and Support is one of our most important growth drivers in the organization. That's why we have been investing a lot I mean, last year, we duplicated our structure to support our business jet in the U.S. This means more service at Embraer MROs, more revenues, more profit. And now we are doing the same with commercial jets with this project in Dallas, Texas. So again, we expect an important growth in terms of revenues and profitability in the next 5 years from our Services and Support division.
Operator: The next question comes from Alberto Valerio with UBS.
Alberto Valerio: I focus on the bottom line, just to see some recurring and nonrecurring items going forward. Financial expenses come a little bit above what we were expecting. Wondering whether the offer of EV is inside that I saw on the cash flows, that's $12.6 million. And another one is about the noncontrolling interest, also come a little bit higher than we were expecting. Just to know the recurring of this $12.2 million on noncontrolled interest.
Antonio Garcia: Alberto, this is Antonio speaking here. For the net financial result, it's very simple. When the share price goes up, you have mark-to-market obligation to our long-term incentive, then we have a hit in the net financial results because the interest we are paying and the interest we are earning, I would say, $50 million. I would say it's a big hit is because of it. And noncontrolling interest, let me have a look here. It's just that Eve was in the mark-to-market in Q3 was positive. That's why it generate a positive impact for the other shareholders just because of it. But again, it's a temporary advantage because probably Eve is going to be more valuable in Q4 than Q3 that this credit is going to be reverted. I hope to be able to answer you.
Operator: Our next question comes from the chat and it's from Cenk Orcan. Can you provide some color on expected U.S. tariff impact on coming quarters?
Guilherme Paiva: Cenk, thanks for the question. We originally guided for about $60 million to $65 million of U.S. import tariffs for the full year. And as I mentioned, year-to-date, we have already recognized about $27 million of those. So we should -- based on the original guidance, we do have about $35 million left in Q4. But it's important that the company has been working hard to reduce that -- the size of that potential bill through different initiatives, and we do expect it to be lower. So let's see when we publish our full year numbers, what's the actual total.
Operator: This concludes the question-and-answer session for equity research analysts and investors. Now we'll start the Q&A session to the press. First, we'll be answering questions in English, and then we'll be answering questions in Portuguese. We'll also answer questions and the questions sent via the platform chat. [Operator Instructions] The first question comes from Nelson [indiscernible] I'm sorry, just one second because this question is in Portuguese. The next question comes from -- the first question is in Portuguese. I'm sorry, everyone. There is no answers in English. So we'll be answering the Portuguese questions for now. [Interpreted] The first question comes from Nelson [indiscernible] from India. How is the campaign for KC-390 in India? The recent visit of Brazilian VP, did you make any advancements in the negotiation? What is the scope with the Mahindra Group? India focuses on local production. Would it be with parts produced in Brazil or fully produced with Indian products?
Unknown Executive: [Interpreted] Thank you very much for your question. The India project is moving forward very well. It is moving forward on our side and on the Indian side. The inauguration of Embraer's office 2 weeks ago in New Delhi was an important landmark for the company. And truth be told, we also counted with the presence of Vice President of Brazil, Geraldo Alckmin, Ministry of Defense, the commander of the Brazilian Air Force. Therefore, we are very well positioned. And we believe that KC-390 it's an excellent solution to India's Air Force. Our partnership with Mahindra includes marketing, also marketing and sales support. And we are also present on the industrial side of the deal. This project of the middle aircraft transportation requires a 50% local origination of the parts, the production of the parts -- many of the parts will still be produced in Brazil, and there will be also parts from our suppliers being a vast majority either produced in India or sent to India where the final assemble of the aircraft will be conducted. The final localization part is not yet concluded. We are working on it, but it will be a collaboration between Brazil and India. All in all, it will be a win-win for both countries with this new business. And it's a business that for KC-390 is huge. It's a similar number of aircraft, very similar to our total production so far.
Operator: [Interpreted] Second question. Our next question is from [ Chandu Alves ] with [ Oval ] Newspaper. Dear Francisco Gomes Neto, how is the negotiation with the U.S. government for the removal of the 10% tariff on planes? Does that harms Embraer?
Francisco Neto: [Interpreted] Thank you for the question. The negotiation is between both governments. Embraer does not have direct participation in the negotiation. It's between both governments. But I would say that things are moving quite well. I think you just saw that President Lula met with President Trump in Kuala Lumpur a week ago. That was a very important step towards the negotiation process. And the process -- the negotiation of the process is moving forward. We are very optimistic about it. So once a bilateral agreement is met between both countries, the chances of the aircraft and its parts resume its 0 tariff. Chances are very good. And this has also happened with other bilateral agreements with the U.K., I mean, Europe, Japan and Indonesia, where in all cases, the aircraft that needs parts went back to 0 tariff. And yes, the second part, it is harmful in 2 ways. One is the parts that Embraer sends to the U.S. for the assemble of executive aircraft that is being impacted by tariff payments, and this increases our expenses because the product becomes more expensive. And in the case in commercial aircraft, it penalizes the aircraft because it becomes more expensive with the tariffs. And this can probably may jeopardize the fact that airline companies may not even place further orders.
Operator: I just have a brief announcement to English speakers. [Operator Instructions] Next question from Mr. [indiscernible].
Unknown Attendee: [Interpreted] Can you hear me?
Unknown Executive: [Interpreted] Yes, loud and clear. You can go ahead.
Unknown Attendee: [Interpreted] At the beginning of your remarks, you said that Embraer is envisioning a more ambitious expansion. How do you envision this expansion? Can you give us some details, please?
Francisco Neto: [Interpreted] Okay. I understand that you were referring to a future expansion, right? Okay. Currently, our product portfolio is very modern and competitive. And we can notice that if you look at our order backlog because it's close to $31 billion, and there are still $50 billion under construction. And we continue to focus on the sale of these products. And with this backlog, we expect a very significant growth of the company in the next 5 years. We are thinking beyond 5 years and even 10 years. Therefore, now we are investing in new technologies, important investments in new technologies because Embraer needs to be prepared for a future growth cycle based on new products or new aircraft. It could be aircraft for Executive Aviation, Commercial or Defense aircraft. So this is our short- and long-term view. This is the expansion that I mentioned during my remarks. New products and also future opportunities for further growth of the company going forward. These new products could refer to Commercial Aviation, meaning larger planes than E195-E2. It could be larger or smaller. We are also looking at new technologies with electric propulsion. It could be a hybrid one for midsized aircraft. I mean, we do not define yet what would be our production line. We are investing in new technologies because it's important that we are prepared to make that decision when the time comes.
Unknown Attendee: [Interpreted] And about KC-390 or the [ C-360 ] Millennium with India. From my understanding, Embraer thinks that this business is a given, right?
Unknown Executive: [Interpreted] No. No. This is a very tough competition. We are competing with a U.S. aircraft, an American aircraft, well consolidated in the market. We are also competing with the French aircraft, but we believe that our aircraft are very well positioned for that kind of application. But from there until signing the agreement, there is a large avenue.
Unknown Attendee: [Interpreted] I mean just my last question. Maybe you will tell me that I should participate in Eve's conference call. But in terms of the actual flight test with the flying aircraft, will the test be conducted in Brazil?
Unknown Executive: [Interpreted] Yes, they are occurring in Brazil. So we hope that Eve's first flight should occur late this year or early next year. And so we are working very hard in the development of the product, which we believe to be very important for Embraer in the future. But if you need more details, you should just join Eve's conference call, which will follow ours. But the tests are being conducted in our plant in Gavião Peixoto.
Operator: [Interpreted] Now our next question will be in English. Let me just give a brief announcement to Portuguese speakers. [Foreign Language] [Operator Instructions] The next question will be conducted in English. It comes from Jon Hemmerdinger.
Jonathan Hemmerdinger: Can you hear me? I just want to touch on, Francisco, you mentioned new commercial products. And you've talked about some of this before, but I also heard you mention potential larger aircraft than the 195. Would you be willing to give any sort of updated time line on when you might expect to make a decision on what comes next on the commercial side? And if so, what is that time line?
Francisco Neto: Actually, John, this is the most frequent question I had in the past year. But again, I mean, the answer remains the same. We keep investing in new technologies. I mean we want to be -- to have our, let's say, technology readiness for -- to go for a new product that might be executive aircraft or commercial aircraft bigger or smaller, but we don't have a time line definition at this point of time.
Jonathan Hemmerdinger: Yes. Fair enough. If I can follow that up with a question about the U.S. government shutdown. Has that affected any of the FAA work that you're doing, the certification work with Eve, any of the airworthiness ticketing for the aircraft, the E2s or the E1s for that matter? And any -- has it affected any discussions about tariffs? Are these things delayed because of the shutdown?
Francisco Neto: No, no, no, John. I mean, again, I mean, in terms of certification work, we continue working very closely with ANAC in Brazil and also with the contacts with the FAA. And the tariffs, I mean, I don't see any issue because of the shutdown affecting the tariff negotiation between Brazil and the U.S.
Operator: The next question comes from [indiscernible].
Unknown Attendee: My name is [indiscernible] I'm coming from Lagos, Nigeria. I have an African question. Africa is under privileged. So from what you said, Embraer is in a highly positive phase of operation this year. With that having been said, does Embraer have any plan to increase its commitment to build capacity in Africa?
Francisco Neto: Thanks for the question. Africa is a very important market for Embraer, a very important region. We have many aircraft in operation in the continent. And more recently, we delivered aircraft for Air Link, South Africa, the E2, but we have many customers operating aircraft in Africa. So again, we will continue to invest in that region, I mean, to introduce more and more Embraer aircraft and Embraer services in the continent.
Unknown Attendee: So is there any plan to increase the commitment to build capacity in Africa?
Francisco Neto: In terms of services, yes, as much as we deliver more aircraft, then we need more service and support depending on the region. But today, we already have a good structure, service structure to support our aircraft in operation in the continent.
Operator: The next question comes from the chat, and it's from Edgardo [indiscernible] from Aviation Line. Is there any update regarding the suspension of the development of the new Embraer turboprop? How long can this program realistically remain paused before its initial design assumptions and market analysis become obsolete? And he's got also a question #2, but if you'd like to answer this one first, please go ahead.
Francisco Neto: Sure. Thanks for the question. Well, the turboprop project or initiative has been canceled by us. I mean, we don't have at this point of time any project or initiative in that direction anymore. It might change in the future, but at this point of time, the project has -- it's not on hold, it has been canceled. What is on hold is the E175-E2. That one is on hold because of the scope clause in the U.S. So we are following the scope clause. If any change happens, then we will consider to restore the work on the 175-E2. But again, turboprop has been -- project has been canceled.
Operator: His second question is, I would like to know if there have been any updates regarding the Aerolíneas Argentinas order for the E195-E2 aircraft, which was put on hold after the change of government.
Francisco Neto: No, no change, no updates. We hope that one day, they will come back and to consider that program that is a natural replacement of the old E190 E1s by the E2 family. At this point of time, we don't have any update on that sales campaign.
Operator: Thank you very much, sir. Thank you, everyone, for participating. This has concluded the Q&A session of the Embraer conference. [Interpreted] We have now concluded the Embraer's conference call. Thank you... [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]