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- **Revenue Growth**: Q2 revenue up 9% to $1.24 billion, driven by defense (14% growth) and improving civil market indicators.
- **Financial Performance**: Free cash flow increased 44%, with a focus on reducing CapEx by 10% YoY. Defense margins improved, while civil utilization challenges persist.
- **Strategic Initiatives**: Organizational restructuring, technology innovation (e.g., Prodigy), and defense investment leveraging aim to boost ROIC and free cash flow.
- **Risks and Opportunities**: Civil market recovery signs, defense spending growth, and network optimization efforts to enhance profitability.

**【Management Opening Remarks】**
- Calin Rovinescu outlined the transformation plan focusing on portfolio sharpening, capital management, and operational excellence. He highlighted Canada's CAD 81.8 billion defense investment over five years and the appointment of Matt Bromberg as CEO. The plan aims to improve profitability and free cash flow through disciplined execution and technology leverage.

**【CFO Financial Commentary】**
- Q2 revenue rose 9% to $1.24 billion, with adjusted segment operating income up 4%. Free cash flow increased 44% to $201 million. Capital expenditures are expected to decrease by 10% YoY. Defense revenue grew 14% with margin improvement, while civil revenue rose 5% but faced lower utilization.

**【CEO Commentary】**
- Matt Bromberg emphasized organizational changes, including leadership shifts in civil and defense, and a focus on portfolio review and capital discipline. He highlighted technology advancements like the Prodigy image generator and noted signs of civil market recovery. The goal is to enhance ROIC and free cash flow through strategic investments and operational efficiency.

**【Q&A Highlights】**
- Analysts inquired about capital thresholds, ROIC targets, and defense opportunities. Management responded with plans for disciplined capital allocation, network optimization, and leveraging defense growth. They also discussed potential ROIC improvements and the impact of reduced CapEx on future growth.

CAE Inc (CAE) Q2 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

CAE

CAE fundamentals

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