Cargojet (CJT) Q3 2025 earnings summary

Executive summary

• Leadership transition continues with Pauline Dhillon confirmed as next CEO effective January 1, 2026, following Jamie Porteous stepping back to a strategic advisor role after 24 years of service.

• Domestic network revenue grew 6.3% year-over-year, offsetting declines in ACMI and Charter revenues due to macroeconomic headwinds.

• Total revenues fell 10.5% year-over-year to $219.9 million, primarily from lower ACMI and Charter business.

• Free cash flow surged 218.8% year-over-year to $152.4 million, driven by higher operating cash flow and asset disposals.

• Net earnings dropped 70.4% year-over-year to $8.8 million, reflecting revenue declines in non-domestic segments.

Financial highlights

• Domestic revenue grew by 6.3% year-over-year to just under CAD 100 million, offsetting declines in ACMI and charter revenue.

• Adjusted EBITDA margin was robust at 32.0%, though down 1.5 percentage points from the prior year.

• Free cash flow: $152.4 million (up 218.8% year-over-year).

• Adjusted net earnings: $4.9 million (down 79.2% year-over-year).

• Maintenance capital expenditures for the quarter were CAD 45.5 million, with year-to-date net CapEx at just over CAD 170 million.

Outlook and guidance

• Q4 is expected to show sequential improvement in ACMI and charter revenues, though not to the extent of previous years.

• 2026 is anticipated to have stable margins, with benefits from ongoing cost control initiatives.

• Growth CapEx for 2026 is projected to be minimal, with only one aircraft delivery planned and likely to be leased out.

• Management remains optimistic about long-term international trade normalization and is focused on cost and capital discipline.

• Block hours are expected to remain at current levels into the first half of 2026, with flexibility to adjust as demand changes.