CAE (CAE) Q1 2026 earnings summary

Executive summary

• Leadership transition as Matthew Bromberg succeeds Marc Parent as CEO, with Calin Rovinescu as Executive Chairman, and governance changes announced.

• Revenue grew 2% year-over-year to $1,098.6 million, with adjusted EPS stable at $0.21.

• Adjusted segment operating income rose 10% to $147.8 million; adjusted order intake was $1.1 billion with a $19.5 billion adjusted backlog.

• Strategic focus on deleveraging, enhancing free cash flow, and driving higher returns on invested capital.

• Strong market fundamentals in civil and defense, with long-term growth expected in both segments.

Financial highlights

• Consolidated revenue of $1.1 billion, up 2% year-over-year; adjusted segment operating income rose 10% to $147.8 million.

• Adjusted EPS was $0.21, flat year-over-year; net finance expense increased to $54.6 million due to lease and joint venture financing.

• Net income attributable to equity holders rose 18% year-over-year to $57.2 million.

• Free cash flow was -$36.2 million, mainly due to higher non-cash working capital investment.

• Capital expenditures totaled $106.9 million, with 75% invested in growth, mainly for defense simulators.

Outlook and guidance

• Targeting net debt to adjusted EBITDA of 2.5x by fiscal year-end, with further deleveraging expected.

• Civil adjusted segment operating income expected to grow mid-single digits for FY2026, at the lower end of prior outlook, with stable margin.

• Defense segment anticipated to achieve low double-digit annual adjusted segment operating income growth and margin of 8–8.5%.

• Free cash flow conversion rate targeted at ~150% of adjusted net income for FY2026 and beyond.

• CapEx for FY2026 expected to be modestly lower than FY2025, focused on organic growth and simulator capacity.