CGI (GIB) Q3 2024 earnings summary

Executive summary

• Q3 FY2024 revenue reached CAD 3.7 billion (USD 3.67 billion), up 1.3% year-over-year, with strongest growth in Scandinavia, Central Europe, and Asia Pacific.

• Net earnings were CAD 440 million (USD 440.1 million), up 6.1% year-over-year, with diluted EPS rising 9.1% to CAD 1.91.

• Bookings totaled CAD 4.3 billion (USD 4.28 billion), with a book-to-bill ratio of 117% (116.6%) and backlog at CAD 27.6 billion (USD 27.56 billion).

• Margin expansion and EPS accretion were achieved through business mix diversification and cost optimization.

• Two strategic acquisitions announced: Celero in Canada and Aeyon in the U.S., expanding capabilities and client base.

Financial highlights

• Revenue grew 1.3% year-over-year (0.2% excluding FX); IP revenue up 5.2% constant currency.

• Adjusted EBIT was CAD 603 million (USD 602.8 million), margin 16.4% (up 30 bps year-over-year).

• Net earnings margin was 12.0%, up 50 bps year-over-year; diluted EPS was CAD 1.91, up 9%.

• Cash from operations was CAD 497 million (USD 496.7 million), 13.5% of revenue; trailing twelve-month cash from operations was CAD 2.2 billion, up 12%.

• Bookings reached CAD 4.3 billion, with a book-to-bill ratio of 117% in the quarter.

Outlook and guidance

• Signs of stabilization in the macro environment, with clients beginning to solidify future plans.

• Managed services and IP pipelines are up 40% and 15% year-over-year, respectively.

• Continued delays expected in standalone SI&C projects, but strong client interest in end-to-end offerings.

• Tax rate expected to remain in the 25%-26.5% range for future quarters.

• Robust bookings and high book-to-bill ratio in managed services provide a strong base for future recurring revenue and resilience.