Fiserv earnings missed by $0.61, revenue fell short of estimates
Introduction & Market Context
Safran (EPA:SAF) presented its third quarter and nine-month 2025 financial results on October 24, 2025, revealing robust performance across all business segments. The French aerospace supplier reported an 18.3% increase in Q3 adjusted revenue, reaching €7.85 billion, driven by record engine deliveries and strong aftermarket momentum.
The results come amid a continued recovery in the global aviation sector, with Safran benefiting from increased aircraft production rates and growing maintenance demand. The company’s stock has performed exceptionally well over the past year, delivering a 42.8% return and trading near its 52-week high of €104.12.
As shown in the following chart of quarterly and year-to-date revenue growth:
Quarterly Performance Highlights
Safran’s propulsion segment led the company’s growth with Q3 revenue of €4.04 billion, representing a 21.1% increase (25.6% organic) compared to the same period last year. This performance was fueled by record LEAP engine deliveries, which reached 511 units in Q3 (up 40%) and 1,240 units over nine months (up 21%).
The civil aftermarket continued to show strong momentum, with spare parts for civil engines up 16% and services up 24% in dollar terms. This reflects the ongoing recovery in air travel and increased maintenance requirements for aging fleets.
The Equipment & Defense segment posted revenue of €3.0 billion, up 18.9% (11.7% organic), while Aircraft Interiors recorded €802 million in revenue, a 4.0% increase (9.8% organic).
The following breakdown illustrates Safran’s Q3 2025 revenue by activity:
A detailed analysis of the factors contributing to Safran’s Q3 revenue growth is shown in the following bridge chart:
Strategic Initiatives
Safran announced several strategic initiatives during the quarter, including a new LEAP-1A assembly line in Morocco and the groundbreaking of a LEAP MRO (Maintenance, Repair, and Overhaul) facility in the same country. These investments underscore the company’s commitment to expanding its global manufacturing footprint and meeting growing demand for its engines.
In the defense sector, Safran signed framework agreements with Rheinmetall for advanced defense solutions and with PGZ for innovation and local industrial cooperation. The company also unveiled its next-generation infrared binoculars at DSEI 2025, highlighting its continued focus on technological innovation.
The integration of flight controls and actuation activities acquired in July is progressing smoothly, with an expected revenue contribution of approximately €650 million for the full year, featuring a mid-single-digit operating margin before separation and integration costs.
Forward-Looking Statements
Based on strong year-to-date performance, Safran has upgraded its full-year 2025 outlook across all metrics. The company now expects revenue growth of 11-13%, up from the previous "low-teens" guidance. Recurring operating income is projected to reach €5.1-5.2 billion, while free cash flow is expected to be between €3.5-3.7 billion.
The following table shows the evolution of Safran’s 2025 guidance throughout the year:
For the remainder of 2025, Safran expects LEAP engine deliveries to increase by more than 20% compared to 2024. The civil aftermarket is projected to remain strong, with spare parts growth in the mid to high-teens and services growth in the low to mid-twenties percentage range in dollar terms.
Challenges & Risk Factors
Despite the positive outlook, Safran faces several challenges. The company expects tariffs to have a net impact of €100-150 million on its recurring operating income in 2025. Management noted that the tariff situation remains fluid, particularly regarding China-US trade, and is actively managing exposure through mitigation measures and commercial actions.
Supply chain production capabilities remain a watch item, potentially affecting the company’s ability to meet growing demand. Additionally, while Safran has a robust currency hedging strategy in place with a $54 billion hedge book as of September 2025, fluctuations in the euro/dollar exchange rate could impact financial results.
The company’s FX exposure and hedging strategy is illustrated in the following chart:
Safran’s strong Q3 performance and consecutive upgrades to its full-year guidance demonstrate the company’s resilience and strategic positioning in the aerospace industry. With record engine deliveries, robust aftermarket demand, and strategic global expansion, Safran appears well-positioned to capitalize on the continued recovery in commercial aviation while navigating challenges related to tariffs and supply chain constraints.
Full presentation:
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