CAE (CAE) Q1 2027 earnings summary

Executive summary

• Q1 FY2027 marked a strong start, with consolidated revenue up 6.8% year-over-year to CAD 1.2 billion ($1,173.4 million), driven by strong Defense growth and stable Civil performance despite profitability pressures and macroeconomic headwinds.

• Adjusted EPS was flat at CAD 0.26, while reported EPS declined to CAD 0.10 due to restructuring costs.

• Transformation initiatives are progressing, targeting CAD 125–150 million in annual run-rate savings by FY2030, with early benefits expected to mature from FY2028 onward.

• Strategic partnerships and contract wins in both Civil (WestJet, Turkish Airlines) and Defense (Leonardo, Saab, TKMS, Shield AI) underpin long-term growth.

• Fiscal 2027 outlook is unchanged, with continued focus on operational efficiency, capital discipline, and transformation execution.

Financial highlights

• Q1 consolidated revenue was CAD 1.2 billion ($1,173.4 million), up 6.8% year-over-year.

• Adjusted segment operating income was CAD 156.6 million (13.3% margin), down 7.5% year-over-year; adjusted EPS was CAD 0.26, flat versus last year.

• Free cash flow improved to CAD 104 million from negative CAD 135 million last year.

• Net debt stood at CAD 2.6 billion, with a net debt to adjusted EBITDA ratio of 2.27x.

• Repurchased 1.1 million shares for CAD 39 million under the NCIB program.

Outlook and guidance

• Fiscal 2027 and 2030 targets reaffirmed, including CAD 125–150 million in cost savings and adjusted segment operating income of CAD 950 million to CAD 1 billion by FY2030.

• Adjusted segment operating income margin forecasted at 14.6% to 15.1%; adjusted EPS guidance of CAD 1.21 to 1.28 for fiscal 2027.

• Civil revenue expected to be flat to slightly down; Defense to grow at a mid-single digit rate.

• No changes to full-year guidance; transformation program and business execution are on track.

• Cautious near-term outlook for Civil due to seasonality and Middle East disruptions, but long-term growth trajectory remains strong.