CAE reports second quarter fiscal 2026 results

Executive Summary

• CAE reported Q2 FY2026 revenue of $1,236.6 M (up 9 % YoY) and EPS of $0.23 (up 44 % YoY), indicating strong top‑line growth and improved profitability.
• Net cash from operating activities rose to $214.0 M (up 32 % YoY) and free cash flow increased 44 % to $201.0 M, supporting continued capital allocation and deleveraging.
• The company announced a transformation plan that includes eliminating the COO role, consolidating civil aviation leadership, and creating a new SVP of Operations to drive cost efficiency and integration across Civil and Defense segments.

Key Details

• Financial Highlights
• Revenue: $1,236.6 M vs. $1,136.6 M prior year (+9 %).
• Operating income: $155.3 M (12.6 % of revenue) vs. $118.1 M last year (+31 %).
• Adjusted segment operating income: $155.3 M vs. $149.0 M prior year (+4 %).
• Net income attributable to equity holders: $73.9 M vs. $52.5 M prior year (+41 %).
• EPS (basic & diluted): $0.23 vs. $0.16 prior year.

• Adjusted EPS: $0.23 vs. $0.24 prior year (‑4 %).

• Cash Flow

• Net cash provided by operating activities: $214.0 M vs. $162.1 M YoY.
• Free cash flow: $201.0 M vs. $140.0 M YoY.

• Capital expenditures (maintenance): $87.6 M.

• Segment Performance

• Civil Aviation: Revenue $670.0 M (+5 %); operating income $108.7 M (16.2 % of revenue). Delivered 12 full‑flight simulators; training centre utilization 64 %; signed training contracts valued at $592.8 M. Adjusted backlog $8.5 B.

• Defense & Security: Revenue $566.6 M (+14 %); operating income $46.6 M (8.2 % of revenue). Adjusted order intake $555.8 M; adjusted backlog $11.2 B.

• Transformation Plan – Organizational Changes

• COO role eliminated; management layer reduced.
• Alexandre Prevost appointed President, Civil Aviation (consolidating commercial & business aviation training).
• Defense restructured into two organizations led by Merrill Stoddard (U.S.) and France Hebert (Canada & International).

• Juan Araujo hired as Senior Vice President, Operations (effective Jan 2026) to integrate product functions.

• Shareholder Actions

• Repurchased and cancelled 61,900 common shares at $36.76 average price for total consideration of $2.3 M.

• Outlook & Guidance

• Capital expenditures expected ~10 % lower YoY, driven by a 25 % reduction in Civil capex.
• Defense outlook: low double‑digit adjusted operating income growth; aSOI margin target 8 %–8.5 % for FY2026.
• No change to FY2026 free cash flow, finance expense, tax expense or deleveraging targets.

Notable Quotes

• “In my first few months as CEO… we have launched a transformation plan to sharpen our portfolio, strengthen capital discipline, and elevate performance.” – Matthew Bromberg, President & CEO
• “Both Civil and Defense performed broadly as expected this quarter, and we remain focused on disciplined execution while advancing the transformation that will define our next chapter.” – Matthew Bromberg