CAE (CAE) Q3 2025 earnings summary

Executive summary

• Q3 FY25 revenue rose 12% year-over-year to $1,223.4M, with net income up 198% to $168.6M and adjusted EPS up 21% to $0.29.

• Achieved record free cash flow of $409.8M and secured $2.2B in new orders, resulting in a record adjusted backlog of $20.3B.

• Appointed four new directors to the board, including a new Chair, as part of a leadership transition.

• Recognized as one of Canada's Top 100 Employers and on Forbes Canada's Best Employers list for 2025.

• Civil segment increased stake in SIMCOM and extended Flexjet agreement, adding over $500M in order intake.

Financial highlights

• Consolidated revenue reached $1,223.4M, up 12% year-over-year; adjusted segment operating income was $190.0M, up 31% year-over-year.

• Adjusted EPS was $0.29, compared to $0.24 in the prior year; net income attributable to equity holders was $168.6M, up 198% year-over-year.

• Free cash flow was $409.8M (+116% YoY); net cash from operating activities was $424.6M.

• Net debt at quarter-end was $3,352.9M, with net debt to adjusted EBITDA at 3.36x.

• Adjusted ROCE was 5.7%, down from 7.0% a year ago.

Outlook and guidance

• Targeting three-year EPS growth (FY22-25) in the low- to mid-teens percentage range; on track to meet three-year EPS target.

• Civil annual adjusted segment operating income growth now expected to be modestly below previous 10% outlook due to delayed aircraft deliveries; margin expected slightly below 22-23%.

• Defense revenue growth outlook raised to high single digits, with margin expected modestly above 6-7%.

• Free cash flow conversion for FY25 expected to exceed 150% of adjusted net income.

• Net debt to adjusted EBITDA targeted below 3x by fiscal year-end; FY25 CAPEX expected to be ~$30M higher than FY24.