Hey ladies and gentlemen, welcome to the CAE First Quarter Financial Results for Fiscal Year 2026 Conference Call. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity for analysts to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would like to turn the conference over to Mr. Andrew Arnovitz. Please go ahead. Mr. Arnovitz. Good morning everyone and thank you. You for joining us today. Before we begin, I'd like to remind you that today's remarks, including management's outlook and answers to questions, contain forward-looking statements. These forward-looking statements represent our expectations as of today, August 13, 2025, and accordingly are subject to change. Such statements are based on assumptions that may not materialize and are subject to risks and uncertainties. Actual results may differ materially and listeners are cautioned not to place undue reliance on these forward-looking statements. A description of the risks, factors, and assumptions that may affect future results is contained in CAE 's annual MD&A and MD for the three months ended June 30, 2025, available on our corporate website and in our filings with the Canadian securities administrators on SEDAR+ and at the U.S. Securities and Exchange Commission on EDGAR. On the call with me this morning from CAE. are Calin Rovinescu, the company's Chairman, Marc Parent, President and Chief Executive Officer, Matthew Bromberg, incoming President and Chief Executive Officer, and Constantino Malatesta, our Interim Chief Financial Officer. Nick Leontidis, Chief Operating Officer, is on hand for the question period. After formal remarks, we'll open the call to questions from financial analysts. Let me now turn the call over to Calin. Thank you, Andrew, and good morning, everyone. Since being appointed Chairman of CAE earlier this year, I've had the chance to connect with a number of our long-term investors, many of whom I've known through my years at Air Canada. While this is my first time addressing the broader investment community in this role, I want to share why I was compelled to accept the Chairman position and more recently to take on expanded responsibilities as Executive Chairman. My relationship with CAE goes back many years. As President and CEO of Air Canada, I saw firsthand the value CAE brought as a trusted partner in building and sustaining a world-class training organization, particularly through our co-located training centers in Toronto and Vancouver. Earlier in my career, during my time in law and as a Managing Partner at Stikeman Elliott, I also had a connection to CAE. through one of its original investors and longtime Chairman, Fraser Elliott, co-founder of that firm that bore his name, and as an investor, I've been a longtime supporter of the company's mission and potential, so it's both an honor and a privilege to now take on an active role. As Executive Chairman, I've reoriented my professional commitments to dedicate the time required to support Matt and help guide CAE 's long-term direction. In addition to board duties, I'll work closely with him on strategy, operational excellence, and capital allocation with a clear focus on enhancing the customer experience, improving free cash flow conversion, and driving stronger returns on invested capital. A key priority will be deleveraging the balance sheet, not merely as a financial objective, but as a means to enhance shareholder value and strengthen CAE 's long-term resilience. The company made solid progress last fiscal year, and we're targeting a net debt to adjusted EBITDA ratio of approximately 2.5x by fiscal year end. I see that as a waypoint, not the final destination, as I believe we can go further in reinforcing our financial position. At the same time, we continue to give thoughtful consideration to the potential timing and form of shareholder returns, including dividends and share repurchases. We have a buyback program in place to be used opportunistically, and at the appropriate time, we may also consider reinstating a dividend. As Executive Chairman, I'll also engage regularly with key stakeholders, including investors and government leaders. With defense spending accelerating across NATO toward 5% of GDP, along with initiatives like the EU's rearm strategy and renewed momentum in Canada, I intend to play an active role in positioning CAE as a strategic partner. This includes sustained engagement with federal and provincial governments, particularly in Quebec where CAE is a longstanding anchor company. Our goal is to ensure CAE is recognized not only for its critical training and simulation capabilities, but also for the broader economic value we deliver through high-quality jobs, exportable IP, and technology leadership. As defense procurement and policy frameworks continue to evolve, we remain committed to close alignment and active participation. As you all know, today marks an important milestone for CAE as Matthew Bromberg formally succeeds Marc Parent and steps into the role of Chief Executive Officer following our AGM. I want to acknowledge Marc for his outstanding leadership and enduring contribution to CAE. Over his 21 years with the company, including 16 as CEO, Marc guided CAE through a period of tremendous transformation and growth. Under his stewardship, CAE became the global leader in civil aviation and defense training and simulation that it is today. Perhaps most importantly, Marc is widely credited with instilling a deeply customer-centric culture across the organization that continues to define the way CAE's more than 13,000 employees around the world serve our partners and stakeholders each day. Marc has earned a deep respect within the global aerospace industry and his impact extends far beyond CAE. His vision, passion, and unwavering commitment to excellence have helped shape the future of aviation training globally. On behalf of the Board and the entire CAE team, I want to thank Marc for his legacy that will continue to inspire us as we build upon his accomplishments. It's also my pleasure to formally mark the beginning of Matthew's tenure as Chief Executive Officer as he steps into this important leadership role at CAE. I had the privilege of leading the Board's CEO selection process and I'll speak briefly to the qualities and experience that led us to the clear conclusion that Matthew is the right person to lead CAE into its next era. As the company builds on nearly eight decades of leadership and innovation, his appointment follows a comprehensive and highly competitive international search. Given the distinctiveness of CAE's business, we sought a leader with a strong record of value creation in either aerospace or defense. In Matt's case, we found both. We also prioritized candidates with experience managing complex large-scale global operations. Most recently, Matt led global operations at Northrop Grumman, where he drove significant enterprise-wide cost and performance transformations. Prior to that, he served as President of Military Engines at Raytheon and earlier as President of Commercial Aftermarket at Pratt & Whitney. Matt brings a rare combination of strategic insight, operational depth, and leadership acumen. He is, as one would expect of an MIT-trained engineer with a business degree, intellectually rigorous. Equally important, he brings a high degree of emotional intelligence, and his track record of leadership in world-class aerospace and defense organizations, combined with that important balance of IQ and EQ, makes him exceptionally well suited to carry forward CAE's unique culture, which we believe is one of our most important differentiators. Equally important to the Board was Matt's full commitment to CAE's identity as a proudly Quebec-headquartered global company. Matt and his family are relocating to Montreal, which we view as essential. He has also begun taking French lessons, a reflection of his respect for our local roots and commitment to leading CAE in a way that is fully aligned with our values and culture. On behalf of the Board and the broader CAE community, I want to formally welcome Matt as he begins this important new phase with us. As Matt, the management team, and I begin to assess CAE's forward plans, I'm highly optimistic about the next three to five year period. We're building on the strong foundation established under Marc's leadership and are now well positioned to unlock the next level of performance and value creation. With a refreshed Board, new CEO, and an even sharper focus on financial and operational priorities, we see a clear path to delivering stronger returns. These internal drivers, combined with favorable long-term market dynamics, support what we believe is a compelling and durable investment thesis. In civil, the long-term fundamentals remain particularly strong despite some timing noise around pilot hiring this summer. The two major aircraft OEMs currently hold a record combined backlog of more than 17,500 aircraft, and both forecast that the global in-service fleet will nearly double over the next 20 years. CAE also estimates that approximately 300,000 new pilots will be needed globally over the next decade to support this growth and offset retirements. These structural drivers point to a sustained runway for growth in commercial pilot training and in earnings in business aviation. The long-term outlook remains quite positive as well, supported by strong aircraft OEM backlogs, an expanding population of high net worth individuals, and a shift towards fractional ownership models. We are in the early stages of a generational upcycle in defense driven by rising geopolitical tensions and a surge in spending across NATO, the EU, and Canada. This is fueling sustained demand for advanced training and simulation. This is an area where CAE's global reach, technical capabilities, and trusted customer relationships position us to lead. The Canadian government's renewed emphasis on aerospace and sovereign industrial capacity further reinforces the durability of this demand as allied nations work to rebuild critical capabilities. CAE's alignment with national priorities from mission readiness to supply chain resilience supports our conviction in the long-term growth opportunity ahead. Importantly, our growing defense business provides a predictable revenue stream and adds balance to CAE's portfolio, offering meaningful upside in a sustained upcycle and complementing the secular growth we continue to see in civil aviation. Looking ahead, our priorities are disciplined execution, greater operating leverage, and translating earnings into robust and sustainable cash generation to support future investment and shareholder returns. With strong market tailwinds, a focused leadership team, and a reinforced internal foundation, I believe we're well positioned to deliver meaningful long-term value to our shareholders. Now turning to the first quarter performance, overall we had a solid start to the year amid a backdrop of heightened economic uncertainty. We delivered adjusted EPS of $0.21 and secured $1.1 billion of adjusted order intake. Defense delivered strong year-over-year growth in adjusted segment operating income and margin expansion driven by improved execution and disciplined program management. In civil, performance was mixed with continued strength in business aviation, offset, as I said, by some near term softness in commercial training and pilot hiring, consistent with the outlook we provided. I'll now turn it over to Marc and Constantino to walk you through the results in more detail. Thank you Calin for your very kind words. Let me start with a few highlights from the quarter. In civil we delivered solid results supported by the essential nature of our services and the durability of our recurring training business. As indicated last quarter, we continue to take a measured view of the first half of this year in light of macroeconomic uncertainty and ongoing aircraft supply constraints. In Q1 we saw an extension of the temporary pause in pilot hiring and a more cautious approach from commercial airlines, particularly in the U.S. where we believe hiring reached a trough with just 55 pilots hired in June by the 13 largest airlines. Similar dynamics were observed in other regions and these factors contributed to lower utilization and fewer full-flight simulator orders in the quarter. By contrast, market conditions for business aviation, which accounts for about half of civil's profit, remained strong throughout the period. Training center utilization came in at 71%, down from 76% in the prior year period. Consistent with the short-term softness in commercial training we experienced last year, we also delivered eight full-flight simulators, which is the same number that we delivered last year. While the early part of the year was shaped by macroeconomic uncertainty, we're beginning to see encouraging signs of stabilization along with improvements in aircraft supply chains that are bringing greater clarity to airline hiring and fleet planning. The recovery in demand for commercial training solutions is really a matter of when, not if, and we continue to expect a positive inflection in the second half of the fiscal year. On the order front, we secured $511 million of business including five full-flight simulators for a book to sales ratio of 0.84x and 1.27x on a trailing 12-month basis. We ended the quarter with $8.4 billion of total civil adjusted backlog, which is up notably 27% year over year. During the quarter we announced the expansion of our commercial Embraer E2 training offering with the deployment of the first full-flight simulator to support the growing E2 fleet across Europe, the Middle East and Africa. Since quarter end, we also announced the E2 pilot training will be delivered in Montreal, further supporting Porter Airlines' expanding fleet and enhancing the efficiency of their pilot training program. In business aviation, we were pleased to open our first dedicated training center in Central Europe, located in Vienna, which welcomed its first customer in April. The state-of-the-art Business Aviation Training Center, an 8,000 square foot facility, offers an elevated training experience and reflects our continued commitment to supporting customers closer to where they operate. A Gulfstream G550 full-flight simulator is already in service. A new Pilatus PC24 full-flight simulator will be added in the second half of 2026. The center will ultimately feature up to nine full-flight simulators, including Europe's first Bombardier Global 7500, a Global Vision, Embraer Phenom 100/300, and a Bombardier Challenger 3500. In airline operations, we're proud to have rebranded our suite of solutions under a new name, Flightscape. Powered by CAE, Flightscape is a data-driven platform that delivers real-time insights to help airlines enhance operational performance. It empowers operations control center teams to anticipate disruptions, adapt quickly to changing conditions, and optimize costs even in the most complex, time-sensitive scenarios. During the quarter, we signed a long-term agreement with Allegiant, which will leverage Flightscape to transform its operational intelligence and drive improved performance. CAE has a proven track record of leveraging technology to drive innovation and improve the effectiveness of our training solutions. Last fall, we became the first to develop an immersive pilot training app for Apple Vision Pro, enabling pilots to complete key training activities remotely, enhancing efficiency, scalability, and training outcomes. Apple selected CAE as a flagship use case for Vision Pro in aviation, and Apple's CEO Tim Cook and the CFO highlighted us on their latest earnings call. They recognize how our adoption of spatial computing will improve pilot readiness and drive more productive simulator training. Turning to defense, we had a particularly strong quarter driven by solid program execution across the board and improving product mix. Adjusted segment operating income and margin grew significantly year over year, reflecting better program performance and the successful completion of lower margin contracts. We recorded a total of $611 million in defense orders, achieving a book to sales ratio of 1.25x, contributing to $11 billion in defense. Adjusted backlog up 7% year over year. Over the last 12 months the defense book to sales ratio stood at 2.08x. The pipeline continues to be robust with some $6 billion of orders pending customer decisions. In defense, we continue to win strategically important contracts that really reflect the breadth of our training and mission support capabilities. During the quarter we secured a continuation of flight training services for the U.S. Air Force on the KC135 tanker aircraft as well as an extension of our management role in the simulator Common Architecture Requirements and Standards Program for the U.S. Air Force. SCARS is a centralized open systems architecture initiative that supports U.S. Air Force platform simulators and the Joint synthetic environment. Underscoring CAE's leadership in enterprise training solutions for the U.S. Army, we signed an agreement with GDIT under the Flight School Training Support Services Contract, or FTSS, providing simulation capabilities and training support for rotary wing pilot instruction at Fort Novosel, Alabama. In Operational Support Solutions, we announced a collaboration with Sikorsky to deliver CAE's Magnetic Anomaly Detection Extended Roll System for the U.S. Navy and the Royal Australian Navy MH-60R Seahawk helicopters. Built by CAE and integrated by Sikorsky, this compact removable sensor detects magnetic anomalies caused by submarines, providing a powerful new anti-submarine warfare capability for MH-60R operators. In Canada, we signed an additional amendment under the FAC program bringing the total value of subcontracts awarded to CAE under the Skyline Joint Venture to approximately $2 billion. This is aligned with our strategy to transition the Defense adjusted backlog towards more accretive long-term contracts. Since the end of the quarter, we were also awarded a contract by the Italian Air Force to deliver a Block 5 Predator Mission Trainer, or PMT, for the MQ-9A Reaper. Developed in partnership with General Atomics, our PMT is the most advanced simulator for the Reaper platform, offering a highly immersive training environment that accelerates readiness and reduces the need for live aircraft time during pilot and sensor operator training. These wins underscore the impact of the improvements we've made across the defense business. Through stronger execution and disciplined program delivery, we are seeing tangible results both in our operational performance and in growing customer confidence. This progress reflects the focus and hard work of our teams to turn strategy into results and improve profitability. Before I close, I'd like to shift gears. As many of you know, today is my last day as CEO of CAE. and I want to take a moment to reflect on what these 21 years have meant to me. It's really been the honor of my professional life to lead this company for the past 16 years. When I joined in 2005, CAE was a very different business and we've gone through multiple transformations since then, expanding into new markets and today we are the global leader in aviation defense training. What I'm most proud of is our culture. From the very beginning, I believe that if we take care of our people and our customers, the results will follow. That's what we've built together at CAE, a company that leads with purpose, a company where people take pride in the mission, our noble mission, where safety, innovation, and customer partnerships aren't slogans, but they're part of who we are. They're part of our DNA. None of this would have been possible without the incredible team at CAE. I want to thank our instructors, our engineers, our technicians, our support staff, and everyone in between for their dedication, their grit, their passion, and their belief in what we do. As I've often remarked, without the employees of CAE, we are merely a collection of buildings. Without 13,000 people who bring CAE. to life, I know much has been asked of you over the past decade and a half, all of our employees listening to me, and I'm extremely proud of all that you have accomplished to make CAE the global leader that we are today. I'm equally grateful to our exceptional civil aviation and defense customers around the world. We exist to make the world safer, and it's been a true honor to serve as your trusted partner and to help you prepare for the moments that matter most. I also wanted to thank the board and our investors for their trust over the years. Of course, I want to thank Calin warmly and welcome Matt as he officially steps into the CEO role today. I had the opportunity to work closely with Matt over the past couple of months, and I can say without hesitation that he brings the right mix of leadership, operational discipline, and vision to take CAE forward. I am honored that he has been chosen to replace me. I'm confident in the team, confident in the company, and incredibly grateful for the opportunity to have served as CAE's CEO, which really has been the privilege of my life. With that, I'll turn it over to Dino for some additional financial details. Thank you, Marc. Good morning everyone. Consolidated revenue of $1.1 billion was 2% higher compared to the first quarter last year, while adjusted segment operating income was $147.8 million, up 10% compared to $134.2 million in the first quarter last year. Our quarterly adjusted EPS was $0.21, in line with the first quarter last year. Net finance expense this quarter amounted to $54.6 million, up from $49.5 million in the first quarter last year, mainly because of additional lease financing costs related to the recently opened training centers in our global network in support of growth. We also have additional financing costs associated with the consolidation of the Simcom joint venture in business aviation, which took place in Q3 last year. The increase was partially offset by lower finance expense on long-term debt on a lower level of borrowings during the period, in line with our ongoing deleveraging undertakings. Income tax expense this quarter was $19 million for an effective tax rate of 24%. The adjusted effective income tax rate was also 24%, which is the basis for the adjusted EPS. We continue to expect a run rate effective income tax rate of 25% considering the income anticipated from various jurisdictions and the impact from global minimum tax legislative changes. Net cash from operating activities this quarter was - $15.3 million compared to - $12.9 million in the first quarter of fiscal 2025. Free cash flow was - $36.2 million compared to - $25.3 million in the first quarter last year. The decrease was mainly due to a higher investment in non-cash working capital, partially offset by higher net income adjusted for non-cash items and higher dividends received from equity-accounted investees. With continued expected reversals in non-cash working capital investments and our outlook for operations, we expect to generate strong free cash flow in the year with a conversion of adjusted net income of approximately 150%. Capital expenditures totaled $106.9 million this quarter with approximately 75% invested in growth. Approximately 40% of the growth capital expenditures this quarter were for simulators deployed to the FSTSS program in support of U.S. Army helicopter training in Alabama. We remain highly focused on capital efficiency, and notwithstanding this contract-specific investment opportunity in defense, we continue to expect total CapEx in fiscal 2026 to be modestly lower than in fiscal 2025. This will be concentrated mainly on organic growth investments in simulator capacity to be deployed to CAE's global network of aviation training centers, which are backed by multi-year customer contracts. Our net debt position at the end of the quarter was approximately $3.2 billion for a net debt to adjusted EBITDA of 2.75x at the end of the quarter. As Calin indicated, we remain committed to further strengthening our financial position and continue to expect to reach 2.5x net debt to adjusted EBITDA by the end of the fiscal year. Now turning to our segmented performance in Civil, first quarter revenue grew 3% year over year to $607.7 million, while adjusted operating income rose 1% to $107.6 million, resulting in a 17.7% margin. The approximate 40 basis point decrease in the Civil margin reflects lower utilization in commercial training and some differences in product solution mix this quarter. Looking ahead for Civil, we continue to take a measured view of the first half given commercial market dynamics, while also factoring in the usual seasonal impact on our second quarter from the busy summer travel period when pilots are flying. We now expect annual adjusted segment operating income to grow in the mid-single-digit percentage range at the lower end of our prior outlook, with annual segment operating income margin remaining stable year over year. The expected weighting of Civil's results toward the second half is consistent with prior fiscal years, supported by usual seasonality, prevailing market dynamics, and macroeconomic conditions. Adding to our confidence is a recent increase in activity with our U.S. airline customers. In Defense, revenue remained stable at $490.9 million, while adjusted segment operating income increased 45% to $40.2 million, delivering an 8.2% margin thanks to higher profitability and activity on our North American programs. Legacy contracts remain on track with costs and schedules well managed, and there's no change to our annual outlook for Defense. With that, I will turn the call over to Matt. Thank you, Dino, and good morning, everyone. I also want to thank Marc and Calin for the kind words and the entire CAE team for a warm, warm welcome. Let me start by saying what an honor it is to be joining CAE and to be stepping into the role of CEO later today. It is a privilege to follow Marc, whose leadership over the past two decades has shaped the CAE we know today. I'm also grateful to have had the opportunity to work closely with him in the recent weeks, which has helped ensure both continuity and a smooth handoff. Although my appointment becomes official following today's annual general meeting, I've already had a valuable introduction to CAE through time spent with our people, our customers, and other key stakeholders. One of my first experiences was attending the Paris Air Show last month along with the team. It was an intensive and energizing start, and I can say without hesitation, after attending air shows for more than 25 years, I have never seen a company so consistently respected. Every conversation spoke to CAE's professionalism, technical leadership, safety mindset and culture, and a deep, deep commitment to customer success. In these early weeks, I've been extremely impressed by the caliber of CAE's people, the strength of our technology, and the depth of our customer relationships. This is a fantastic organization with tremendous potential to build upon past successes. It is clear to me that we have a world-class team, which is an excellent place to start. Over the next 90 days, I will take a pragmatic approach to evaluating the business both operationally and strategically. My focus will be on understanding where we can further improve efficiency, sharpen execution, and unlock synergies across our balanced portfolio. I value what makes CAE distinctive, especially its strong culture. As I look to the future, I intend to protect what's core while building on our strengths. While it will take time to fully assess and quantify the scale of the opportunities ahead, my initial impressions are that there is real potential to strengthen free cash flow and improve returns on invested capital. This can be achieved not only through enhanced operational excellence, but also through disciplined, data-driven capital allocation. This work will be thoughtful, collaborative, and grounded in a clear objective: creating long-term value for our shareholders. While CAE is best known for its leadership in civil aviation, our defense technologies are increasingly seen as mission critical. We help military forces train more safely, more effectively, and with a level of realism that is essential in today's environment. Having spent a fair part of my career in and around defense, including service as a U.S. Navy submarine officer, I understand how vital it is to be fully prepared before a mission ever begins. That's exactly what CAE enables, and it is why I believe we are uniquely positioned to grow our impact as a strategic partner of choice in defense. I see real potential to leverage our advanced defense technologies more broadly across CAE's portfolio, including in commercial aviation. At the same time, we can drive greater efficiency by applying commercial best practices within our defense business. This cross-pollination of innovation and efficiency can unlock new value, enhance customer outcomes, and support higher returns. As we focus on efficiency, we will relentlessly maintain our commitment to our customers, to quality, and to safety. Before I turn the call back to Andrew, I want to take a moment to speak directly to our investors and analysts. I know many of you have long-standing relationships with Calin and Andrew, and I've benefited from their insights about what matters to you. I look forward to building those relationships over time, and once I'm fully up to speed, I'll welcome the opportunity to engage with you directly. In the meantime, thank you again for the warm welcome. I'm excited to be here, focused on the work ahead, and confident that we can achieve good growth and a great future together. Andrew, back to you. Thanks, Matt. Operator, we'll now open the lines to questions from financial analysts. Thank you, ladies and gentlemen. We will now begin the question and answer session. To join the question queue, you may press star, then one on your telephone keypad, and you will hear a tone acknowledging your request. If you are using your speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. We will pause for a moment as callers join the queue. Thank you. Your first question comes from the line of Fadi Chamoun from BMO Capital Markets. Please go ahead. Okay, good morning. First, I want to say congrats to Marc on the retirement and outstanding career. My question may be to Calin and Matt, but you both referenced, I think in the press release, quote, operational focus, excellence, focus on the operational efficiency side of the story. Maybe it seems also logical after significant growth and the buildup that happened in the last decade that there's kind of road for optimization here. I just wanted to see if you have even high-level thoughts. I know it's kind of early days here in this transition, but if you have any high-level thoughts of where exactly you see the opportunities in terms of improving the margin, improving the cash flow conversion that you talked about. Right, thanks. Good morning. Fadi Calin here and it's good to hear your voice again. Two things. One, as has been referenced in these remarks, CAE has invested significantly over the last period of time in building up capability. That investment has started to pay dividends based on the earnings that we're seeing. We think there's much more potential there that obviously requires an opportunity to leverage those investments and that may result in some additional focus on cost, how it is we can best optimize. From my vantage point, as you know, and I referenced this in my remarks, that's actually within Matt's wheelhouse in terms of operational excellence. It's a simple formula of saying when we look at the commercial side of the business in particular, and frankly the entire civil side of the business, a lot of investment has been, now's the time to optimize it and we think that there are some great opportunities ahead. We're still early on, I'd say in the early innings of that cycle. There's a lot more room to go. That's quite an exciting time to see earnings growth there. On the defense side, you've seen the positive results this quarter and we'll continue to build sort of sustainable, profitable long term contracts and execute well on these various programs. I think that's as simple as that. I don't know, Matt, if you want to comment further? Look. Thanks, Calin, and thanks for the question. You know, recognizing that I'm on the doorstep of the role later today, I have spent my entire career looking at complex global organizations and understanding how to drive efficiency, improve operations, maintain quality, and maintain safety. From what I've seen, we have that opportunity to continue to do that at CAE. As I get into the next 90 days and find out and discover where that is, we'll come back and share that with you. Appreciate it. Thanks. Thank you. Your next question comes from the line of Kevin Chiang from CIBC. Please go ahead. Hi. Thanks for taking my question and echo Fadi's comments there. Marc, congratulations on your upcoming retirement and welcome Matt, to CAE. Maybe as I look at the outlook you provided for fiscal 2026, it seems like you're facing some transient headwinds in civil. Just wondering, as you think about utilization maybe being a little bit weaker than you anticipated, does that change near term CapEx spending opportunities? Could you see upside to your CapEx guidance this year in the sense that maybe there's an opportunity to push some of that spend further out, just as you look to better match near term demand with supply, just given some of the transient headwinds you noted in the prepared remarks? Yeah. Kevin Calin here. Good to hear your voice as well. There's some timing noise for sure around pilot hiring this summer, but the big picture is that the earning potential can be a lot higher over time. As I said, we're just at the beginning of that journey. In terms of getting a bit more granular on capital, I'll ask Constantino to comment briefly. Yep. Good morning. Thanks for the question. Thanks, Calin. We continue to expect CapEx to be slightly lower year over year in FY 2026 overall, in line with our disciplined approach. I think that's going to be key: a disciplined approach to capital deployment. When you look at it, civil CapEx is lower year over year in Q1 by about $10 million already. I mentioned it in my remarks. 40% of the growth CapEx this quarter was for one specific program in defense and security. We are being disciplined, making sure that we're not ahead of the market. We're listening carefully to and looking carefully to where we can find savings and push out CapEx if necessary. That's helpful. Maybe, just maybe back to you as well. Just on the working capital you mentioned, you know, typically seasonally Q1 is a bigger working capital drag, and it sounds like we'll reverse that in fiscal 2024 and 2025. Working capital was, on an absolute basis for the full year, a tailwind. Is that something we can expect for fiscal 2026, or is it a more neutral working capital year for CAE? Yeah. It is typical to see higher investment in non-cash working capital in the first half. It's not inconsistent with the seasonal profile of our business. We do expect a stronger cash generation profile in the second half and remain on track to deliver strong free cash flow for the year, targeting our conversion adjusted net income 150% with that. That comes with disciplined approach with non-cash working capital. Yes, we are aiming to have a more neutral approach to non-cash working capital this year. Perfect. I'll leave it there. Thank you very much. Thank you. Your next question comes from the line of Cameron Doerksen from National Bank Financial. Please go ahead. Yeah, thanks. Thanks very much. Good morning and yeah, congratulations Marc, on the retirement and welcome. Matt, wanted to ask a question about I guess the civil outlook. Obviously some incremental softness that you've seen here, but it does sound like you're fairly confident that we'll see a better second half of the fiscal year for you. I guess what indicators do you have that provide that visibility in the, in the second half, rebound in and I guess especially the airline pilot training part of the business. Is there anything that you're seeing specifically that could point to that? Yes, Cameron, Calin here and good to hear your voice too. Look, as I said, this appears to have been a trough in pilot hiring. I think, as you know, and obviously I've lived this, when you hire pilots, there's a built-in lag before the training programs start. This is a natural built-in lag. We've not seen what we believe to be the trough, and Marc commented on that in his remarks. We've also started to see some increased activity now, which trends well for the rest of the year. However, we also have seen some of the airlines that were more cautious in their announcements. We're using the data that we have, and I'm going to ask Nick to comment on what we're seeing in terms of commercial hirings, especially in the U.S., but we are cautiously optimistic about the rest of the year. Nick? Yeah, thank you, Calin. Yeah, I guess a couple of things. That, I guess, just to point to. One is, as we come out of August into September, we know. Our customers are going to resume hiring. That is just through conversations and some discussions around access to capacity. You know, hiring is definitely going. To ramp up in the second half. The other thing to remember is that, you know, Boeing and Airbus are now. Delivering more normal levels of airplanes, and that's now gone on for a couple of months. We're not going to call it a. Victory yet, but those levels of deliveries. Are going to start to drive more. Demand for capacity as we go forward. As you know, Airbus has reaffirmed their guidance. Boeing is at 35 or 40 airplanes. A month, and these are numbers that will drive more demand as a lot. Our customers are taking airplanes, a combination of airplanes being ramped up. Our customers are starting to talk about capacity demands. I think we're pretty confident that we've got it. We're going to see an improvement in the take up of the training operation. Good, that's great. Color. Thanks very much. Appreciate the time. Thank you. Your next question, Konark Gupta from Scotiabank, please go ahead. Thanks, appreciate it. Good morning everyone and congrats to Marc for an outstanding career as well as congrats to Matt and Calin. Calin, nice to hear your voice too on the earnings calls. Now my first question, I guess goes to, I think some of the remarks that Calin, you and Matt made about how you want to kind of tackle the operational efficiency, enhance the cash profile, return on capital, etc. How do you see the executive compensation alignment should evolve over time as you execute on those priorities? I mean, return on capital is obviously one of the metrics that you've been kind of factoring in, free cash and other kind of metrics. Do you see any room for some innovation there on the executive compensation side? Yeah, you know, we look at these. Thank you very much, Konark, and good to hear your voice as well. We look at the various metrics and we also compare the various drivers that other organizations have looked at. We've done a deep dive on the aerospace and defense. There's this whole discussion whether Roche is the right measure to do it. We'll continue to assess that and I'm not convinced of that. This is early days for Matt. We need Matt to kind of get up to speed and sort of see what are the right drivers. Capital allocation is one of the main objectives of this new exercise, this new chapter, if I can say so. As we look to compare ourselves to best in class within the aerospace and defense industry and recognizing that the two segments have got obviously different capital allocation bases and targets, it's clear that we see room for steady improvement. This is not a situation where you're going to have an overnight dynamic that changes everything. This is room for steady improvement. We are still extremely committed to both segments of the business, the aerospace and defense side. When you put all that together, that means that we will be looking at different capital allocation measures and measuring ourselves and comparing ourselves to best in class. Okay, that's a fair comment, Calin. Thank you so much for that. If I can quickly follow up on defense, the margin in defense for first quarter was pretty solid. I would say like 8% plus. Usually you have high pronounced seasonality and locking it in defense quarters. I think Marc, you mentioned about, you know, some of the weaker margin, also lower margin contracts rolling over in the mix, etc. Can you speak to, you know, the mix shifts between the legacy contract and the non-legacy contracts and like what kind of contributed this margin and, you know, I mean, does it give you even more confidence in the top end of the range, that gap for the full year? Yeah. Thanks for the question. I think the short answer here is we're executing exactly what we said we would. We're on plan. Actually, we're slightly ahead of plan, you know, and I'm very, very happy with where we are. I mean the plan we put in place a few quarters ago, as you very well know, with regards to the legacy contracts, we're right on plan and see no issue at all with being able to execute the remaining programs that are there. We're executing a strategy that we had to basically replace programs that are dilutive to our margin expectations, which those are quite nicely accretive to those margin expectations, which is, as you know, low double digits in defense, which again we've said is more of a waypoint at a destination. We're on track to do that. We're very, very happy with what we're saying. We're very happy with regards to the order intake as well as, as I mentioned, and the backlog growth. I think it's just steady, very disciplined program execution here. I think that in terms of revenue you might see, as we've always seen, revenue being lumpy quarter over quarter, but that's just the nature of the beast as you execute programs. I think we're very confident. We're not changing our guidance, but we're very confident. Okay, thanks, Marc, for the question. Thank you. Your next question comes from the line of Benoit Poirier from Desjardins. Please go ahead. Yeah, good morning, everyone. Congrats, Marc, for those 21 years. Welcome, Calin and Matt, to the CAE team. I know, Matt, it's early on in the role, but you know obviously quite well the U.S. defense market. I would be curious to have your view about how this market is different from other regions. What's your first impression of CAE's positioning and potential for margin improvement, especially for the U.S. specifically? Yeah, thanks. Thanks, Benoit, and appreciate the question and look forward to getting to know you. I think we're in a very unique period in defense. First, you know, CAE's role in mission safety and mission rehearsal, it transcends borders. We also have tremendous once-in-a-generational growth in defense, not only in the U.S. but in other parts of the world. I think CAE is well positioned to do several things. One, capitalize on those opportunities. Two, leverage a defense business across our commercial enterprise, as I mentioned earlier, from technology. Three, create scalable international solutions among our defense partners. I see huge opportunity and I'm excited to work to unlock that over the next few months. Okay, that's great. When we look in Canada, obviously very bullish defense outlook with the intent to reach 5% of GDP. CAE extremely well positioned with the FACT program, but also the future FLIT. Where do you see the greatest opportunities for CAE outside those two sizable programs? Benoit, Calin here and likewise, good to reconnect. You know, Canada is a huge opportunity, of course, because with Prime Minister Carney's announcements on increasing spend, it is frankly exponential. We've never seen that before in this country. There are many, many, many different areas. One of the things that we believe, and certainly as the country takes on more responsibility in protecting its own sovereignty, is where the data is maintained, where the training is maintained. If it buys fighter aircraft, who is it that is doing the training on those fighter aircraft? It's expected to be CAE as we look forward to programs in other countries. If Canada buys equipment from other countries, we would want to accompany the government on those initiatives. I think that this is something that we look to leverage, the opportunities for CAE not only directly in connection with Government of Canada, not only in relation to Government of Canada programs, but quite frankly, international programs throughout. This is an extremely unique opportunity for us. This is not something that is going to happen overnight because obviously defense programs take time to be approved. We've also raised the question of some urgency with government that there are opportunities to exercise the prerogatives that they have as a government to expedite programs and not go through normal procurement processes that can bog down. We see this as being a fairly exciting long-term growth opportunity as we get to this 5% of GDP spending over time. Great caller. Thanks for the time. Thank you. Your next question comes from the lineup. James McGarragle from RBC Capital Markets. Please go ahead. Yeah, thanks for having me on and congrats, Marc, on a great career. Matt, on the new role, I'm sure it's an exciting time for you, but I just have one on the defense results here. The margin guidance implies kind of mostly stable margins for the rest of the year, whereas last year margins kind of stepped up as the year progressed. Is there anything to call out in Q1 that might have helped out margins here, or should we expect similar sequential trends in margin improvement that we saw in the prior fiscal year? Hi James, thanks for the question and good morning. We guide on an annual basis because effectively there's always potential for volatility in the margins. We did have a step up in the margins. It really is, as we remarked, some lower margin contracts falling off and some higher margin contracts being ramped up. It will be depending on the ramp up of other contracts. We can see that change throughout the year. That's why we guide on an annual basis because we're confident we're going to meet that. Guidance is unchanged. Yeah, thanks for the color there. On the civil margin outlook and some of the utilization drop we saw in Q1, can you just walk me through the puts and takes on the margin outlook for the rest of the year? I guess given the drop in utilization, the stable margins kind of implies you're working on some things operationally to drive an improvement in margins. Can you just kind of talk us through what those things are? Absolutely. To look ahead into fiscal 2027, as we kind of see utilization kind of normalize and pick back up, we'd be kind of modeling for kind of a step function improvement in margin as we look out longer term as utilization starts to improve back up to where it has trended historically. After that I can turn the line over. Thank you. Hi. I guess margin improvement in the second half obviously is going to come from utilization. We're going to have improvements in utilization for. The rest of the year. The other thing is cost, cost controls, I mean, you know, like anything else, cost measures are always part of everyday life. For this particular period in the second half, we are making some assumptions around cost. Avoidance to be able to maintain these numbers. Dino? I just wanted to add that we had reflected back in May that the first half of this year will be similar to the first half of last year. That was a ramp up, meaning a ramp up in the second half of this quarter, and again based on all the things that Nick talked about. We are expecting, as usual, more deliveries back ended and some of the efficiencies you're driving through to make sure that we deliver as we committed. Thank you. Thank you. We have time for one last question and that comes from the line of Tim James from TD Cowen. Please go ahead. Okay, thanks. Thanks very much. Best wishes for the future. Marc, it's been a real privilege watching your career and learning from you over the years. Welcome, Matt and Calin. I look forward to your insights and soaking up all I can on CAE's way forward. Just one question here. It was mentioned earlier in the call about the trend towards fleet operators and fractionals and the business aviation side. I don't see you really well positioned for whatever way the wind blows in business aviation, but is there anything specifically the company can do or needs to do strategically to really take advantage of that trend towards fleet operators and business aviation? I can start it off, Tim. Look, I think one of the big things I think we've already done right is the acquisition of the remaining part of Simcom, which obviously gives us extended exclusivity with regards to the training of Flexjet, which is, as you know, I think the second largest fleet operator, fractional jets. We're very well exposed to that segment. The fact that we train the majority of the airlines around the world, either in simulators or in our training centers, makes us obviously very fluid in executing airline type training, which is really, when you look at fractional owners, that's what they're looking for because they're operating basically their pilots are quasi airline pilots. They're looking for that kind of training, which is different than your traditional business aircraft training, which is having smaller flight departments. I think we're very well positioned and we have everything. I mentioned Flexjet, but you look across the board in terms of our fleet operators that we service. I just mentioned, for example, AirSprint Canada. Very, very good customer. I'm quite optimistic that we'll continue to do very well as a result of that exposure, that fractional ship, plus the preponderance of the larger cabin business jets that we cover. Thank you very much. Operator, that's all the time we have. Operator, that's all the time we have for the call this morning. I want to thank all of our participants for joining in and remind you that a transcript of the call will be on CAE's website later today. Thank you. Have a good day. This brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a blessed day.