CAE reports first quarter fiscal 2026 results

Executive Summary

• CAE Inc. reported first-quarter fiscal 2026 results showing revenue growth to $1,098.6 million (up 2% year-over-year) and earnings per share (EPS) of $0.18 (up 20% from $0.15 in the prior year).
• The company announced a significant leadership transition: Matthew Bromberg will succeed Marc Parent as President and CEO effective August 13, 2025, following the Annual and Special Meeting of Shareholders.
• Defense segment performance improved significantly with adjusted segment operating income rising 45% to $40.2 million, while Civil Aviation remained stable with $607.7 million in revenue.

Key Details

• Consolidated Financials (Q1 FY2026 vs Q1 FY2025):
  • Revenue: $1,098.6 million vs. $1,072.5 million (+2%).
  • Operating Income: $133.8 million vs. $108.6 million (+23%).
  • Adjusted Segment Operating Income: $147.8 million vs. $134.2 million (+10%).
  • Net Income Attributable to Equity Holders: $57.2 million vs. $48.3 million (+18%).
  • EPS: $0.18 vs. $0.15.
  • Adjusted EPS: $0.21 vs. $0.21 (stable).
  • Adjusted Order Intake: $1.1 billion vs. $1.2 billion (-6%).
  • Adjusted Backlog: $19.5 billion vs. $17.0 billion (+15%).
• Segment Performance:
  • Civil Aviation: Revenue of $607.7 million (+3%); Operating income of $99.4 million (+11%); Adjusted segment operating income of $107.6 million (+1%). Book-to-sales ratio was 0.84x for the quarter. Adjusted backlog reached $8.4 billion (+27%). Delivered 8 full-flight simulators (FFSs).
  • Defense and Security: Revenue of $490.9 million (+1%); Operating income of $34.4 million (+83%); Adjusted segment operating income of $40.2 million (+45%). Book-to-sales ratio was 1.25x. Adjusted backlog reached $11.1 billion (+7%).
• Leadership Changes:
  • Matthew Bromberg appointed as incoming President and CEO, effective August 13, 2025.
  • Marc Parent stepping down as CEO; Calin Rovinescu becoming Executive Chairman of the Board.
  • Sophie Brochu appointed as Lead Independent Director.
• Financial Position & Cash Flow:
  • Net Finance Expense: $54.6 million.
  • Net Cash Used in Operating Activities: $(15.3) million.
  • Free Cash Flow: $(36.2) million.
  • Net Debt: $3,236.1 million; Net debt-to-adjusted EBITDA ratio of 2.75x.
  • Growth and maintenance capital expenditures: $106.9 million.
• Management Outlook (FY2026):
  • Civil: Full-year adjusted segment operating income expected to grow in the mid-single-digit percentage range; margin expected to remain stable.
  • Defense: Full-year adjusted segment operating income expected to grow in the low-double-digit percentage range with margins in the 8% to 8.5% range.
  • Free Cash Flow: Expected conversion rate of approximately 150% of adjusted net income.
  • Leverage: Targeting a net debt-to-adjusted EBITDA ratio of 2.5x by fiscal year-end.

Notable Quotes

• "CAE delivered a solid first quarter, with double-digit income growth and margin expansion in Defense and continued momentum in Civil. We remain on track to capitalize on the significant opportunities ahead..." — Calin Rovinescu, Chairman of CAE.
• "Our first quarter results reflect the dedication of our teams and the strength of our position, with solid Civil performance in a dynamic macro environment and strong execution in Defense... As I pass the torch, I do so with full confidence in the company's direction..." — Marc Parent, CAE's President and Chief Executive Officer.
• "In the past few weeks of onboarding, I've seen first-hand the strength of CAE's world-class team... a key focus of mine will be on translating that potential into enhanced shareholder value through a pragmatic approach to improving efficiency..." — Matthew Bromberg, incoming President and CEO.