CGI (GIB) Q3 2024 earnings summary

Executive summary

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

• Net earnings were $440.1 million, up 6.1% year-over-year, with a margin of 12%, and diluted EPS rose 9.1% to $1.91.

• Bookings totaled $4.3 billion, with a book-to-bill ratio of 117% (116.6%) and a global backlog of $27.6 billion (1.9x revenue).

• Managed services and IP-based services drove growth, while systems integration and consulting remained soft.

• Two strategic acquisitions announced: Celero in Canada and Aeyon in the U.S., adding 875 professionals.

Financial highlights

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

• Adjusted EBIT was $603 million (16.4% margin), up 3.1% year-over-year.

• Cash from operations was $497 million in Q3 and $2.2 billion over the trailing twelve months, up 12% year-over-year.

• DSO improved to 42 days, two days better than last year.

• Return on invested capital reached 16.1%, up 40 basis points year-over-year.

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.

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

• Effective tax rate expected to remain in the 25%-26.5% range.

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