The following is a summary of the CAE Inc. (CAE) Q2 2025 Earnings Call Transcript:
Financial Performance:
CAE reported a revenue of $1.14 billion, up 8% compared to the same quarter last year with an adjusted segment operating income of $149.0 million, up from $135.6 million.
Net finance expenses increased to $52.9 million due to higher expenses on lease liabilities and lower long-term debt.
Capital expenditures totaled $57.0 million, focused on growth and expanding global training network capabilities.Free cash flow of $140 million this quarter, slightly down from $147.4 million due to lower non-cash working capital contributions.
Net debt to adjusted EBITDA ratio was 3.25 times, slightly increased due to legacy contract impacts.
Business Progress:
Extended leadership in civil and defense markets, securing nearly $3 billion in orders, bringing the backlog to a record $18 billion.
Delivered 18 full flight simulators, with training center utilization at 70%.
Recorded strong order flow in civil market with a 1.08 book-to-sales ratio on 12% higher revenue than last year.
In defense, CAE secured a transformative $1.7 billion award under Canada's Future Aircrew Training program, with a defense backlog up 94% year-over-year.
Opportunities:
The civil sector driven by high demand for pilots and pilot training amidst global fleet expansion.
Defense sector benefits from increased budgets and heightened focus on modernization and readiness, emphasizing CAE's role in training and simulation solutions.
Risks:
OEM aircraft supply disruptions impacting commercial aviation training utilization.
Uncertain global economic and geopolitical environments might affect market conditions and customer decisions, evidenced by temporary pressures on initial training and pilot churn in the Americas.
Tips: For more comprehensive details, please refer to the IR website. The article is only for investors' reference without any guidance or recommendation suggestions.
