CAE (CAE) Q4 2025 earnings summary

Executive summary

• Delivered an exceptional Q4 FY2025, capping a strong year with 13% Q4 revenue growth to $1,275.4M and annual revenue up 10% to $4.7B, 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.

• Adjusted EPS for Q4-2025 was $0.47, up 292% year-over-year; annual adjusted net income was $385.5M (CAD 1.21 per share).

• Record adjusted backlog of $20.1B, up 65% year-over-year, supporting future growth.

• Secured $1.3B in new orders in Q4, driving backlog growth.

Financial highlights

• Q4 consolidated revenue rose 13% year-over-year to $1,275.4M; full-year revenue up 10% to $4.7B.

• Adjusted segment operating income for Q4 was $258.8M, up 106% year-over-year; annual adjusted segment operating income up 33% to $732M.

• Q4 EPS was $0.47, up from $0.12; annual net income attributable to equity holders was $405.3M.

• Generated $289.4M in free cash flow in Q4 and a record $813.9M for the year, with a cash conversion rate of 211%.

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

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.