CAE Hits Q3 Net Debt-to-EBITDA 2.30x, Revenue Up 2% to $1.25B
CAE posted fiscal Q3 revenue of $1,252.1M, up 2% year-over-year, with EPS of $0.34 versus $0.53, while adjusted EPS climbed 17% to $0.34 for the quarter. The company achieved a net debt-to-adjusted EBITDA of 2.30x, beating its 2.50x year-end target, driven by stronger Defence performance.
1. Q3 Financial Highlights
CAE reported consolidated revenue of $1,252.1 million for fiscal Q3, a 2% increase from $1,223.4 million a year earlier. GAAP EPS declined to $0.34 from $0.53, while adjusted EPS rose to $0.34 from $0.29, and net debt-to-adjusted EBITDA improved to 2.30x, surpassing the 2.50x target ahead of schedule.
2. Civil Aviation Performance
Civil segment revenue decreased to $717.2 million from $752.6 million, with operating income margin falling to 19.8% from 29.7%. The division delivered 15 full-flight simulators, achieved 71% training centre utilization, booked $572.4 million in new training contracts and ended the quarter with an $8.2 billion backlog.
3. Defence Segment and Margin Improvement
Defence delivered its highest adjusted segment operating income margin above 10% in over six years, contributing to a consolidated adjusted segment operating income of $195.8 million, up 3% year-over-year. Strong Defence performance offset Civil softness, maintaining overall results within guidance.
4. Transformation Plan and Outlook
CAE completed a portfolio review identifying non-core assets representing 8% of revenue for potential divestiture and plans to remove 10% of deployed commercial simulators to boost utilization. These measures will incur short-term revenue headwinds but are expected to drive higher returns, stronger cash flow and resilient performance, with updated targets to be provided at fiscal year-end.