CAE reported a solid start to fiscal 2027 with revenue growth of 6.8% and adjusted profitability that significantly exceeded analyst estimates. The company generated strong free cash flow of $104 million, a sharp reversal from the prior year's outflow, driven by improved working capital and lower capital expenditures. Management reaffirmed its full-year outlook, emphasizing that fiscal 2027 remains an execution year focused on its restructuring and transformation plan, which includes rationalizing its training network by closing between four and six Civil training centers.
Key Highlights
- Revenue rose 6.8% year-over-year to $1,173.4 million, outpacing expectations across both major segments.
- Defense adjusted segment operating margin expanded to 9.5% from 9.4% in the prior year, supported by North American contract activity and program efficiencies.
- Civil training utilization improved to 72.2% from 68.8% YoY, though segment profitability was pressured by the Middle East conflict and transformation-related costs.
- Free cash flow reached $104.0 million compared to a negative $134.7 million in the same quarter last year.
- Adjusted backlog remains robust at $19.2 billion, with a book-to-sales ratio of 1.10x for the quarter.