Army Technology

CAE defence division reports 14% Q2 FY26 revenue rise despite lower orders

CAE’s management is confident in long-term defence growth, supported by a C$11bn backlog and rising defence budgets.

CAE’s defence and security division has reported revenue of C$566.6m ($404.3m) in the second quarter (Q2) of fiscal 2026 (FY26) - up 14% from C$495.9m ($353.6m) in the same period of FY25.

The division’s operating income rose to C$46.6m in Q2 FY26, accounting for 8.2% of the group’s revenue, compared to C$23.4m and 4.7% of revenue in Q2 FY25.

Adjusted segment operating income also reached C$46.6m, representing an increase from C$33.1m or 6.7% of revenue in the second quarter of the previous year.

The division reported an adjusted order intake of C$555.8m, a 75% decline from C$2.26bn the year before. It closed the quarter with an adjusted backlog of C$11.2bn, representing a 2% decrease from C$11.4bn a year earlier.

The book-to-sales ratio stood at 0.98 for the quarter, while the figure for the previous twelve months was 1.19 times.

CAE indicated that the Defence pipeline holds approximately C$6.1bn in pending bids and proposals.

Overall, revenue of CAE increased 9% to C$1.24bn in Q2 FY26 compared with C$1.14bn in the same period of the year before. The company’s operating income during the quarter was C$155.3m, accounting for 12.6% of revenue.

CAE president and CEO Matthew Bromberg stated: "In my first few months as CEO, I've gained a deep appreciation for CAE's extraordinary people, our strong customer relevancy, our industry-leading technology and strong market positions."

Looking ahead, the company’s management expects continued growth and profitability in the defence segment, supported by an adjusted backlog above C$11bn and increased defence budgets among NATO and allied countries.

Management continues to forecast low double-digit annual growth in adjusted segment operating income and an operating margin between 8% and 8.5% for fiscal 2026 in the Defence division.

Bromberg added: “With generational defence investments planned in the US, Canada and Europe, strong structural demand and record aircraft backlogs in civil aviation, CAE is well-positioned to drive higher returns, stronger cash flow and sustainable value for shareholders."