CAE reports third quarter fiscal 2026 results

Executive Summary

• CAE reported Q3 FY2026 revenue of $1,252.1 M (up 2% YoY) and adjusted EPS of $0.34 (up 17% YoY).
• Net debt‑to‑adjusted EBITDA improved to 2.30×, beating the FY target of 2.50×.
• Civil segment showed a 5% revenue decline, while Defense revenue rose 14%; both segments posted higher adjusted operating margins versus the prior year.

Key Details

• Consolidated Financials
• Revenue: $1,252.1 M vs. $1,223.4 M (2025)
• Operating income: $195.8 M (15.6% of revenue) vs. $262.6 M (21.5%) prior year
• Adjusted segment operating income: $195.8 M vs. $190.0 M YoY (+3%)
• Net income attributable to equity holders: $108.9 M vs. $168.6 M (-35%)
• EPS (basic & diluted): $0.34 vs. $0.53 prior year

• Adjusted EPS: $0.34 vs. $0.29 (+17%)

• Civil Aviation Segment

• Revenue: $717.2 M vs. $752.6 M (-5%)
• Operating income: $141.8 M (19.8% of revenue) vs. $223.4 M prior year
• Adjusted segment operating income: $141.8 M vs. $150.8 M (-6%)
• Full‑flight simulators delivered: 15 (down 25% YoY)
• Training centre utilization: 71% (down from 76%)
• Order intake: $572.4 M vs. $1,511.8 M prior year (‑62%)

• Adjusted backlog: $8.2 B vs. $8.8 B prior year

• Defense & Security Segment

• Revenue: $534.9 M vs. $470.8 M (+14%)
• Operating income: $54.0 M (10.1% of revenue) vs. $39.2 M prior year
• Adjusted segment operating income: $54.0 M vs. $39.2 M (+38%)
• Order intake: $571.1 M vs. $706.9 M (-19%)

• Adjusted backlog: $11.0 B (down 4% YoY) with ~$6.2 B of pending bids/proposals

• Liquidity & Capital Structure

• Net debt: $2,782.3 M (down from $3,186.5 M previous quarter)
• Net debt‑to‑adjusted EBITDA: 2.30× (target ≤2.50×)
• Free cash flow: $411.3 M vs. $409.8 M prior year

• Capital expenditures (maintenance + growth): $50.6 M

• Shareholder Actions

• Repurchased & cancelled 44,100 common shares at a weighted‑average price of $36.50 per share ($1.6 M total).

• Management Outlook

• Civil: expects FY2026 adjusted segment operating income to decline modestly (mid‑single‑digit %) but margin to stay around 20%; rationalizing simulator network and reducing capital spend.
• Defense: raises FY2026 outlook to >20% aSOI growth with an expected adjusted operating margin of ~8.5%.

• Total FY2026 capital expenditures projected >10% lower than FY2025, driven by a ~30% cut in Civil capex.

• Conference Call – Executives (Chairman, CEO, interim CFO, IR SVP) to discuss results on Feb 13, 2026 at 8:00 a.m. ET.