CAE (CAE) Q1 2027 earnings summary

Executive summary

• Q1 FY2027 delivered 6.8% revenue growth to $1.17 billion, robust free cash flow, and continued progress on the transformation plan targeting $125–$150 million in annual run-rate savings by FY2030.

• Civil segment performed in line with expectations despite macroeconomic and Middle East headwinds, while Defense saw strong revenue growth and margin expansion.

• Transformation plan is progressing across multiple workstreams, with early benefits expected to mature from FY2028 onward.

• Strategic partnerships and contract wins in both Civil (WestJet, Turkish Airlines) and Defense (Leonardo, Saab, TKMS, Shield AI) underpin long-term growth.

• Fiscal 2027 outlook remains unchanged, with a focus on operational efficiency, capital discipline, and cost savings.

Financial highlights

• Q1 consolidated revenue was $1.17 billion, up 6.8% year-over-year; Civil revenue grew 5.6% to $641.6 million, Defense up 8.3% to $531.8 million.

• Adjusted segment operating income was $156.6 million (13.3% margin), down 7.5% year-over-year; Civil at $106.1 million (16.5%), Defense at $50.5 million (9.5%).

• Adjusted EPS was $0.26, flat year-over-year; free cash flow improved to $104 million from negative $135 million last year.

• Net debt stood at $2.65 billion, with a net debt to adjusted EBITDA ratio of 2.27x.

• Repurchased 1.1 million shares for $39 million under the NCIB program.

Outlook and guidance

• Fiscal 2027 and 2030 targets reaffirmed, including $125–$150 million in cost savings and adjusted segment operating income of $950 million to $1 billion by FY2030.

• Adjusted EPS guidance for FY2027 is $1.21–$1.28; adjusted segment operating income margin forecasted at 14.6%–15.1%.

• Civil revenue expected to be flat to slightly down; Defense to grow at a mid-single digit rate.

• No changes to full-year guidance; transformation program and business execution are on track.

• Cautious near-term outlook for Civil due to seasonality and Middle East disruptions, but long-term growth trajectory remains strong.