CAE Q3 Earnings Call Highlights

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CAE (NYSE:CAE) executives told investors the institution delivered what they characterized arsenic a “solid” 3rd 4th for fiscal 2026, with spot successful defence offsetting softer-than-expected enactment successful civilian aviation, portion absorption precocious a multi-phase translation program focused connected portfolio sharpening, tighter superior discipline, and operational show improvement.

Interim CFO Constantino Malatesta said third-quarter consolidated gross roseate 2% twelvemonth implicit twelvemonth to CAD 1.25 billion. Adjusted Segment Operating Income accrued 3% to CAD 195.8 million, and adjusted net per stock were CAD 0.34, up from CAD 0.29 a twelvemonth earlier.

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CAE recorded CAD 7.3 million of transformation-related expenses successful the quarter, chiefly successful SG&A. Malatesta said those costs were included successful adjusted results and reduced adjusted EPS by astir CAD 0.02.

Net concern disbursal fell to CAD 54.1 million from CAD 56.6 million, which absorption attributed chiefly to little indebtedness borrowings, partially offset by higher expenses connected lease liabilities. Income taxation disbursal was CAD 29.6 million, translating to a 21% effectual taxation complaint connected some a statutory and adjusted basis; the institution reiterated it expects an effectual taxation complaint “run rate” of astir 25% going forward.

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On currency generation, Malatesta said nett currency travel from operating activities was CAD 407.6 million, portion escaped currency travel was $411.3 million, somewhat higher than the year-ago quarter. Capital expenditures totaled $50.6 million, with astir 75% invested successful growth. He added that CAE has further reduced its fiscal 2026 CapEx outlook and present expects full-year superior expenditures to beryllium much than 10% little than past year, driven by a further simplification successful civilian CapEx that is expected to beryllium astir 30% little twelvemonth implicit year.

Malatesta said nett indebtedness ended the 4th astatine astir $2.8 billion, with nett indebtedness to adjusted EBITDA of 2.3x, which surpassed the company’s anterior extremity to scope 2.5x by fiscal year-end.

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In the civilian segment, third-quarter gross declined 5% to CAD 717.2 million and adjusted operating income fell 6% to CAD 141.8 million, for a 19.8% margin. Management attributed the declines to little simulator income and little utilization successful grooming centers, partially offset by the merchantability of utilized simulators crossed the network.