CAE (CAE) Q4 2025 earnings summary

Executive summary

• Delivered an exceptional Q4 and FY2025 with robust financial and operational results, including record free cash flow and backlog growth.

• Achieved disciplined execution, efficient capital management, and met year-end leverage targets, enhancing financial flexibility.

• Secured CAD 1.3 billion in new Q4 orders, driving a record end-of-year adjusted backlog of CAD 20.1 billion, up 65% year-over-year.

• Q4 EPS from continuing operations was CAD 0.47, up from CAD 0.12; annual adjusted net income was CAD 385.5 million (CAD 1.21 per share), up from CAD 0.87.

• Free cash flow reached CAD 289 million in Q4 and a record CAD 814 million for the year, with a 211% cash conversion rate.

Financial highlights

• Q4 consolidated revenue rose 13% year-over-year to CAD 1.3 billion; full-year revenue up 10% to CAD 4.7 billion.

• Adjusted segment operating income for Q4 was CAD 258.8 million, up from CAD 125.7 million last year; annual adjusted segment operating income up 33% to CAD 732 million.

• Net cash from operating activities was CAD 322.7 million in Q4 and CAD 896.5 million for the year.

• Annual net income attributable to equity holders was CAD 405.3 million, up from a loss of CAD 304.0 million last year.

• Adjusted ROCE was 7.2% in Q4, up from 5.9% a year ago.

Outlook and guidance

• Targeting a free cash flow conversion rate of 150% for fiscal 2026 and beyond, up from the previous 100% target.

• Expecting modestly lower simulator deliveries in civil for fiscal 2026, with a stronger second half as supply chain constraints ease.

• Civil segment operating income projected to grow mid to high single-digit % with a modest margin increase; defense segment expected to achieve low double-digit % income growth and 8%-8.5% margin.

• Net leverage expected to reduce to 2.5x by end of fiscal 2026.

• Management expects modestly lower CAPEX in FY2026, with continued deleveraging and strong financial flexibility.