CAE expects low-double-digit percentage annual defense aSOI growth in FY26

The company said, “With a record $8.8B adjusted Civil backlog, the outlook for civil aviation training solutions remains highly compelling, supported by strong and durable fundamentals in a secular growth market. Chief among these is the global regulatory requirement that pilots and crew maintain certification for each aircraft type in the active commercial and business jet fleet. Regulations worldwide consistently mandate recurrent training-typically every six months-for pilots to retain their certifications. This built-in regulatory cadence helps make CAE‘s (CAE) Civil business inherently less cyclical, providing a stable and recurring demand base. Additional growth is driven by the ongoing need to train new pilots, fueled by both fleet expansion and retirements, as well as transition training for existing pilots moving between aircraft platforms. Notwithstanding the impacts of tariffs, the broader geopolitical environment, and related economic pressures on CAE’s aviation customers, the Company expects Civil’s adjusted segment operating income to grow in the mid- to high-single-digit percentage range in FY26, along with modest expansion in annual aSOI margin.” Then added, “Management believes CAE is well-positioned for long-term growth and enhanced profitability in Defense, backed by an $11.3B adjusted backlog and a prolonged up-cycle driven by increased budgets across NATO and allied nations.” And added, “With the Defense foundation now solidified, evidenced by significant margin improvement driven by last fiscal year’s high-cadence, high-quality execution, management expects low-double-digit percentage annual aSOI growth and an annual aSOI margin in the 8% to 8.5% range in FY26.” Then added, “CAE’s business is highly cash-generative and with the completion of a significant multiyear investment cycle, Management anticipates strong free cash flow in fiscal 2026, driven by robust operating cash flows, lower investments including CAPEX, and further optimization of non-cash working capital. This performance is expected to translate into a conversion rate of approximately 150% of adjusted net income attributable to the Company’s equity holders for this fiscal year-and beyond.