We have taken practical steps over the past year to advance this goal. Notably, this includes a streamlined organizational structure dedicated to customer focus and growth but also balancing operations and free cash flow.
1 This report includes historical and forward-looking non-IFRS financial measures, non-IFRS ratios, capital management measures and supplementary financial measures. These measures are not standardized financial measures prescribed under IFRS and therefore should not be confused with, or used as an alternative for, performance measures calculated according to IFRS. Furthermore, these measures should not be compared with similarly titled measures provided or used by other issuers. For historical measures, refer to Section 11.1 “Non-IFRS and other financial measure definitions” and Section 11.3 “Non-IFRS measure reconciliations” of CAE’s MD&A for the year ended March 31, 2026 (which sections are incorporated by reference into this report) for the definitions and reconciliations of these measures to the most directly comparable measure under IFRS. For forward-looking measures, refer to the “Forward-looking financial measures” section of our May 21, 2026 press release announcing the results of our fourth quarter and full fiscal year 2026 (which section is incorporated by reference into this report) for definitions and reconciliations of these measures to their historical equivalents.
President and Chief Executive Officer
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Operating with greater focus and discipline
To convert this ambition into results, we launched a transformation focused on three priorities: focusing our portfolio where we excel, taking action to improve capital discipline across our current footprint and future investments, and finally creating and building a culture, operating cadence and toolset that support continuous improvement and performance. Together, they sharpen our focus on where we can win, where returns are strongest, and how the business performs and generates cash.
Portfolio
We are simplifying the portfolio and directing resources where CAE can compete, win and create the greatest value. About eight per cent of our revenue is non-core, and throughout fiscal 2027, we will streamline the company and strengthen our focus. The strategic review of Flightscape, announced in May, is one example. It is intended to position the software business for its next phase of growth while supporting a simpler, more focused CAE.
Capital discipline
We are taking a pragmatic approach to capital allocation and see areas where we can reduce our footprint and rationalize our civil training network. This reduction of almost 10% of our commercial aviation capacity will better align our network with demand, improve service delivery, and reinforce financial returns. We are also bolstering our future capital discipline, so every dollar deployed meets strategic and financial thresholds. This requires assessing capital expenditures, research and development, and operating spend across the organization, so resources are directed toward opportunities that can open attractive markets, solidify our competitive position and generate sustainable returns. In fiscal 2026, that meant lower capital expenditures year over year and rigorous cash discipline across the system.
That discipline is already producing results. We moved to a more conventional definition of free cash flow 1 to improve transparency and accountability. We expect early free cash flow 1 improvement as we realign the operating model and prioritize higher-return initiatives. With deleveraging ahead of plan, we have greater flexibility to assess and execute our capital allocation priorities.
Performance
We are raising the bar on performance. That includes simplifying our operations and processes, investing in our factory and tools, and modernizing our workflow. This will enable more productive and profitable use of simulators, resources and assets, reducing complexity across sites and strengthening accountability. We are operating at a steady pace and applying more discipline after investments are made.
1 This report includes historical and forward-looking non-IFRS financial measures, non-IFRS ratios, capital management measures and supplementary financial measures. These measures are not standardized financial measures prescribed under IFRS and therefore should not be confused with, or used as an alternative for, performance measures calculated according to IFRS. Furthermore, these measures should not be compared with similarly titled measures provided or used by other issuers. For historical measures, refer to Section 11.1 “Non-IFRS and other financial measure definitions” and Section 11.3 “Non-IFRS measure reconciliations” of CAE’s MD&A for the year ended March 31, 2026 (which sections are incorporated by reference into this report) for the definitions and reconciliations of these measures to the most directly comparable measure under IFRS. For forward-looking measures, refer to the “Forward-looking financial measures” section of our May 21, 2026 press release announcing the results of our fourth quarter and full fiscal year 2026 (which section is incorporated by reference into this report) for definitions and reconciliations of these measures to their historical equivalents.
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Civil Aviation
Structural demand protecting returns through the cycle
Most of the world’s population has yet to fly, highlighting the long runway ahead for aviation growth. Civil Aviation is a core driver of CAE’s value creation. As one of the global leaders in aviation training, with the largest simulator training network in the industry, we are exceptionally well positioned to benefit from structural growth in air travel and a significant global need for aviation talent.
Major OEMs continue to carry deep order backlogs, reinforcing sustained demand for pilots, technicians and crew. By 2034, we estimate nearly 1.5 million civil aviation professionals will be needed, and CAE is ready to help train them at scale.
While long-term fundamentals remain strong, fiscal 2026 demonstrated softness in Civil Aviation. Many factors tamped down market growth, including geopolitical uncertainty, events in the Middle East, OEM supply chain shortages, and aircraft groundings. This has required thoughtful operating choices. We have remained selective, prioritizing the quality of earnings over volume, and adjusted our outlook early as visibility evolved. Our revision reflected that selectivity, not a change in the underlying long-term demand profile. The same selectivity is shaping how we run the Civil business. We are pursuing synergies between our Business Aviation and Commercial Aviation segments, where it makes sense, including shared infrastructure, systems and back-office teams, while tailoring the customer experience to each segment. This reduces duplication and creates more capacity to advance products and technologies where customers value it most.
Throughout this period, we hit important industry milestones, including the certification of the Boeing 777-9 FFS and the delivery of Joby and Eve simulators, early entrants in the emerging eVTOL market. Both reinforce CAE’s role as a trusted provider that delivers high-technology training devices and differentiated integrated training solutions.
The result is a Civil business built to deliver stronger returns through the cycle.
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Defense & Security
Positioned for a multigenerational investment moment
Demand in Defense & Security is evolving quickly. For the first time in decades, the defence industry is entering a growth cycle of a scale and duration that rivals civil aerospace. We are shaping the business for repeatable growth aligned with customer needs and sovereign investment.
Our role in that cycle is anchored in the strengths of the business today.
In simulation and mission rehearsal, CAE is one of the largest independent defence training providers, with the broadest platform and capability portfolio in the industry. Our enduring franchises anchor multi-decade programs and support careers that can span a lifetime at CAE, creating recurring revenue and a sturdy foundation for the business.
During fiscal 2026, we strengthened that foundation by implementing a unified global defence leadership team while maintaining the dedicated U.S. governance required for that market. This is improving speed, alignment and accountability across the organization while enhancing our ability to execute consistently.
Through CAE USA, we continue to deliver mission readiness to the U.S. Department of Defense, including F-16 training systems, while remaining aligned with major modernization priorities such as the U.S. Air Force’s Next-Generation Survivable Airborne Operations Center aircraft.
That same strategic focus on readiness and sovereign capability is increasingly evident in Canada. The Defence Industrial Strategy, announced by Prime Minister Mark Carney at our Montreal headquarters, together with an $82 billion commitment to defence spending over the next five years, creates a significant domestic opportunity for CAE, including training across air, land, sea, space and cyber that reinforces Quebec and Canada as world-class aerospace hubs.
More broadly, these priorities are also shaping demand across NATO and allied countries, where we deepened key relationships during the year, including through a worldwide co-operation agreement with Saab on GlobalEye and a sovereign training program with Australia’s Future Air Mission Training System.
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Sustainability
Driving efficiency and long-term value
Sustainability is embedded in how we operate and how we make decisions across CAE. It is part of building a stronger, more efficient company for the long term. We continue to integrate it into project evaluation, capital allocation and product development, and we review progress regularly as part of our operating rhythm.
That includes improving the efficiency of our operations, reducing energy use in our facilities and advancing next-generation products designed to lower power consumption and environmental impact. We are also incorporating carbon considerations into investment decisions so that business cases reflect both financial returns and emissions impact. These efforts reflect a practical approach to sustainability; one that supports performance, discipline and responsible growth.
Looking ahead
Taken together, these changes reinforce my confidence in CAE’s future. With our new structure and leadership team in place, we are well positioned to capture the growth opportunities ahead in both Civil Aviation and Defense & Security, while navigating near-term cycles with discipline and care.
Our strategy is clear: expand margins, improve cash flow, reduce capital intensity and simplify the company to create long-term value.
None of this is possible without our people. I want to thank CAE employees for their commitment, professionalism and resilience through a period of meaningful change.
I am also deeply grateful to Calin Rovinescu and the Board for their guidance and support throughout this transition.
Finally, I would like to thank our customers, partners and shareholders for their continued trust and confidence in CAE.
The responsibility that comes with being one of the world’s largest training organizations is not lost on us. We are proud of the role CAE plays in preparing people for missions where performance, readiness and safety matter most. CAE plays an important role in making the world safer, and we will continue to earn that role every day through execution, innovation and trust.
* This report includes forward-looking statements about our activities, events and developments that we expect to or anticipate may occur in the future including, for example, statements about our fiscal 2027 consolidated financial outlook , long-term transformation plan targets to fiscal 2030, transformation costs and savings, vision, strategies, market trends and outlook, future revenues, earnings, cash flow growth, profit trends, capital spending, expansions and new initiatives, including initiatives that pertain to sustainability matters, financial obligations, available liquidities, expected sales, general economic and political outlook, inflation trends, prospects and trends of the industry, expected annual recurring cost savings from operational excellence programs, management of the supply chain, estimated addressable markets, demand for CAE’s products and services, access to capital resources, our financial position, expected accretion in various financial metrics, expected capital returns to shareholders, business outlook and opportunities, objectives, development, plans, growth strategies and other strategic priorities, our competitive and leadership position in our markets, expansion of our market shares, CAE's ability and preparedness to respond to demand for new technologies, the sustainability of our operations, and other statements that are not historical facts. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties associated with our business which may cause actual results in future periods to differ materially from results indicated in forward-looking statements. While these statements are based on management’s expectations and assumptions regarding historical trends, current conditions and expected future developments, as well as other factors that we believe are reasonable and appropriate in the circumstances, readers are cautioned not to place undue reliance on these forward-looking statements as there is a risk that they may not be accurate. For more information, readers should refer to the sections “Caution regarding forward-looking statements” and “Material assumptions” under Section 2 of CAE’s MD&A for the year ended March 31, 2026 and in our May 21, 2026 press release announcing the results of our fourth quarter and full fiscal year 2026, which sections are incorporated by reference into this report.
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Global Annual Activity and Sustainability Report Overview
At CAE, we exist to make the world safer.
Our cutting-edge training, simulation and critical operations solutions empower pilots, cabin crew, maintenance technicians, airlines, business aviation operators, and defence and security personnel to perform at their best every day and when the stakes are the highest.
We equip those in critical roles with the skills and expertise needed to move our world forward safely. We provide digitally immersive training and operational support solutions to two markets globally:
Civil Aviation
Including commercial airlines, regional airlines, business aircraft operators, civil helicopter operators, aircraft manufacturers, thirdparty training centres, flight training organizations, air navigation service providers, maintenance, repair and overhaul organizations and aircraft finance leasing companies.
Our mission
We deliver cutting-edge training, simulation and critical operations solutions to prepare aviation professionals and defence forces for the moments that matter.
Defense & Security
Including defence forces, original equipment manufacturers (OEMs), government agencies and public safety organizations (MROs), worldwide.
Our vision
To be the trusted partner in advancing safety and mission readiness, defining the standard of excellence in training and critical operations by harnessing technology and enhancing human performance.
We are a proud partner of choice for those operating in the most complex environments.
Roots in innovation
When Ken Patrick, a former Royal Canadian Air Force officer, founded CAE in 1947, his goal was to “… take advantage of a war-trained team that was extremely innovative and very technology intensive.” By the early 1950s, we were already creating our first flight simulators. One innovation led to another and, by 1982, we had developed a flight simulator so realistic that training on real aircraft was no longer necessary.
The rest is history.
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FY26 Corporate financial highlights
$4.9 billion
Annual revenue
$19.2 billion
1 Adjusted backlog
Adjusted backlog 1
$5.0 billion
1 Adjusted order intake
Adjusted order intake 1
$791.9 million
Net cash provided by operating activities
1,2 $473.8 million
$473.8 million 1,2 ## Annual free cash flow 1
1 Annual free cash flow
$612.3 million
Operating income
$710.7 million
1 Annual adjusted segment operating income (SOI)
Annual adjusted segment operating income (SOI) 1
$0.97
Dilluted EPS
$1.20
1 Adjusted earnings per share (EPS)
1 Non-IFRS financial measure, non-IFRS ratio, capital management measure, or supplementary financial measure. Refer to the Appendix for the definitions and reconciliations of these measures to the most directly comparable measure under IFRS.
2 In the fourth quarter of fiscal 2026, the free cash flow definition was revised to include growth capital expenditures and capitalized development costs and exclude dividends paid. Comparative figures have been reclassified to conform to these changes.
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Our strategic pillars
Market leadership
We have established ourselves as a leader across our markets by being a trusted partner for our stakeholders and by embracing customer centricity. Looking forward, there remains significant headroom for continued growth in our large addressable markets. As a result, we are constantly seeking out ways to focus our portfolio around our core capabilities and enhance the performance of our customers. These actions will enable us to continue to win in our markets and extend our leadership positions. Furthermore, our products are deployed with a focus on integrated sustainability.
Revolutionizing training
We have a history of nearly 80 years of applying innovation and technology to create novel, world-class solutions and generate long‑term competitive differentiation. We are established as one of the global leaders in training, digital immersion, and modelling and simulation technologies. We use focused technology development to improve the performance of our businesses and generate value for our customers.
Efficient growth
We aim to maximize the benefits of our strong competitive positions and our ongoing transformation efforts to deliver profitable growth, higher returns on invested capital and improved free cash flow conversion. As we work to transform the business by continuing to focus on improved performance and capital discipline, we will drive operational excellence and cost optimization, and apply a more prudent approach to pursuing both organic and inorganic growth.
Skills and culture
Our core values are innovation, integrity, empowerment, excellence and One CAE. We employ these values across a diverse global team to drive a unique social impact. We look to create a high-performing culture that values teamwork, professional growth, engagement and ownership. As a result, our employees across the globe share a passion to enhance safety and prepare our customers for the moments that matter.
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Advancing safety, performance and sustainability across the industry
Impact inherent to CAE’s business model
CAE’s business model delivers tangible societal and environmental benefits, directly linked to our core activities and operational footprint. Safety is central to this impact. In FY26, CAE delivered more than 1.3 million simulator training hours in our Civil network worldwide, supporting airlines, air navigation service providers, business aviation operators and defence partners in maintaining pilot proficiency, meeting regulatory requirements and reducing operational risks. By enabling high‑fidelity, data‑driven training, CAE contributes to safer skies and higher operational standards across the aviation industry.
In defence, CAE’s Live, Virtual and Constructive (LVC) ecosystems enable forces to rehearse complex, multi‑domain operations at scale, supporting global security through enhanced mission readiness, deterrence and operational effectiveness in an increasingly uncertain geopolitical environment.
CAE’s products and solutions generate measurable operational and environmental outcomes. Training analytics, adaptive learning and unbiased feedback enhance training quality and efficiency while preserving the highest safety standards. Airline operations solutions improve flight planning and operational efficiency, contributing to reduced fuel consumption and associated emissions. Mission‑grade synthetic environments further improve resource efficiency by shifting high‑intensity training from live assets to digital platforms without compromising readiness.
Simulation‑based training enables customers to reduce fuel consumption and greenhouse gas emissions across the full lifecycle of training activities by replacing live aircraft flights with high‑fidelity simulators. Each year, pilot training conducted in our Civil business on CAE full‑flight simulators is estimated to be equivalent to over 10 million tonnes of CO2e that would otherwise have been emitted through live aircraft training. Sustainable design and lifecycle management programs further support circularity through the refurbishment, upgrade and reuse of simulators and cockpit components, reducing material intensity and waste.
Beyond technology, CAE strengthens the resilience of the global aviation and defence ecosystem by developing the pilots, engineers and technicians of tomorrow. Through training programs, STEM partnerships and work‑integrated learning initiatives — including Indigenous engagement — CAE helps build a diverse, inclusive and skilled talent pool. By making careers in aviation and defence more visible and accessible, CAE supports social inclusion while ensuring the sector is equipped with the human capital required to meet growing global demand and evolving operational requirements.
