Calian Group (CGY) Q3 2025 earnings summary

Executive summary

• Q3 2025 delivered mixed results, with 4% revenue growth to $192 million, driven by double-digit growth in defense and robust contract momentum in Europe, UK, and Canada, while ITCS faced ongoing headwinds.

• Defense now represents 50% of revenues, with trailing 12-month defense revenues up 19% year-over-year to $373 million, 12% of which is organic.

• Signed backlog increased by $642 million in Q3, with year-to-date contract signings surpassing $1 billion and total backlog at a record $1.5 billion.

• Leadership changes include the appointment of Chris Pogue as President of Defence & Space and the resignation of the ITCS segment president.

• Completed the acquisition of Advanced Medical Solutions and announced a $250 million increase to the Health Care Provider Recruitment contract with DND.

Financial highlights

• Q3 revenues rose 4% to $192 million, with advanced tech, learning, and health up 9%, offset by a 10% decline in ITCS.

• Gross margin improved to 34.8% in Q3, marking the 13th consecutive quarter above 30%.

• Adjusted EBITDA for Q3 was $19 million, down 5% year-over-year, with margins at 9.9%.

• Adjusted net profit for Q3 was $11.6 million ($1.00 per diluted share), down from $12.8 million ($1.06) last year.

• Operating free cash flow was $12 million in Q3, with a 63% conversion rate from adjusted EBITDA.

Outlook and guidance

• Management expects ITCS to recover to historical profitability within a couple of quarters, with positive signs emerging.

• Anticipates further clarity on defense contract opportunities and procurement pace following the Canadian federal budget in the fall.

• Targeting double-digit growth through organic initiatives and acquisitions, with a focus on defense-led growth and revitalizing ITCS.

• Plans to accelerate share buybacks and renew NCIB, subject to TSX approval.