Core Insights - CGI has announced the acquisition of Online Business Systems, enhancing its digital transformation, AI, and cybersecurity capabilities [1] - The acquisition will strengthen CGI's presence in Winnipeg and expand its service offerings to clients in Canada and the United States [1] - Online Business Systems brings over 350 skilled professionals to CGI, further bolstering its expertise in digital transformation and security initiatives [1] Company Overview - CGI is one of the largest independent IT and business consulting services firms globally, founded in 1976 [1] - The company reported fiscal 2025 revenue of $15.91 billion and employs approximately 94,000 consultants and professionals worldwide [1] - CGI operates through a local relationship model supported by a global delivery network, aiming to help clients digitally transform their organizations [1]

Core Insights - CGI has renewed and expanded its partnership with Highmark Inc., focusing on enhancing payment integrity through the CGI ProperPay platform, which has been in place for over a decade [1][2][3] Partnership Details - The new contract includes enhanced data analytics and recovery audit capabilities to support Highmark's claims review initiatives, resulting in year-over-year improvements in recoveries and a 98% uphold rate on audit findings [2][3] - Highmark has reported measurable increases in average savings per review on inpatient claims while maintaining operational efficiency and strengthening provider relationships due to the partnership with CGI [3] Technological Advancements - CGI's ProperPay platform utilizes predictive modeling and case selection optimization to improve audit capabilities, contributing to the overall success of Highmark's payment accuracy efforts [3] - CGI is exploring the introduction of new AI-powered capabilities to further enhance outcomes and automate high-volume review workflows [4] Company Overview - CGI is one of the largest independent technology and professional services firms globally, with reported revenue of CA$15.91 billion for fiscal 2025 and a workforce of 94,000 professionals [4]

Core Insights - CGI has been recognized as an Amazon Web Services (AWS) Premier Tier Services Partner and awarded AWS SAP Competency Partner status, indicating its high level of expertise in cloud solutions and SAP applications [1][2][3] Group 1: AWS Partnership and Competency - The Premier Tier designation highlights CGI's deep technical expertise and successful track record in managing client workloads on AWS [2] - CGI's AWS SAP Competency Partner status emphasizes its capability in deploying and managing SAP applications in the cloud, enhancing performance and scalability for clients [2][3] Group 2: Commitment to Digital Transformation - CGI's achievements reflect its commitment to delivering business value through modern, secure, and scalable solutions, particularly in AI and cloud services [3] - The company has successfully migrated Bell Retail's SAP suite to AWS, showcasing its ability to optimize costs and delivery outcomes [3] Group 3: Global Alliances and Expertise - CGI collaborates with over 150 technology firms, strengthening its cloud, data, and AI capabilities to assist clients in modernizing operations [4] - With thousands of AWS-accredited professionals, CGI combines local expertise with global delivery to provide innovative AI-integrated cloud services [4] Group 4: Company Overview - Founded in 1976, CGI is one of the largest independent IT and business consulting firms globally, with 94,000 professionals [5] - CGI reported fiscal 2025 revenue of CA$15.91 billion, indicating strong financial performance [5]

Core Insights - CGI, one of the largest independent technology and professional services firms globally, announced significant project milestones in Florida related to the deployment of CGI Advantage, a unified ERP platform [1] - The platform enhances financial operations, automates budget processes, streamlines human resource management, and simplifies vendor engagement for government organizations [1] - The adoption of CGI Advantage in Florida demonstrates the company's commitment to providing innovative solutions that support local government agencies' critical missions [1] Company Overview - CGI operates as a major player in the technology and professional services sector, focusing on delivering efficient solutions to government organizations [1] - The company emphasizes its role in advancing local government operations through technology [1] Product Details - CGI Advantage is designed to improve various operational aspects, including financial management, budgeting, human resources, and vendor relations [1] - The platform's deployment signifies a strategic move to enhance the efficiency of government agencies in Florida [1]

Core Insights - CGI has secured a new contract with His Majesty's Revenue and Customs (HMRC) worth up to £250 million over five years, which includes an initial three-year term and two optional one-year extensions [1][5]. Group 1: Contract Details - The contract involves CGI operating and maintaining HMRC's integration services, which are crucial for daily operations and digital transformation [2]. - CGI will deliver new integrations to support HMRC's large-scale digital transformation programs, aligning with HMRC's Transformation Roadmap [3]. - The contract was awarded through Lot 3 of the Crown Commercial Service (CCS) DALAS framework, aimed at modernizing IT application services [5]. Group 2: Strategic Importance - This collaboration aims to strengthen critical systems that support essential public services across the UK, enhancing the digital experience for HMRC's customers and teams [4]. - CGI's role includes managing existing integration capabilities that are part of the UK's Critical National Infrastructure [2]. Group 3: Company Overview - Founded in 1976, CGI is one of the largest independent IT and business consulting services firms globally, with 94,000 professionals and reported revenue of CA$15.91 billion for Fiscal 2025 [6].

Financial Data and Key Metrics Changes - In Q4, the company reported revenue of CAD 4 billion, representing a year-over-year increase of 9.7%, or 5.5% when excluding foreign exchange impacts [6][10] - Adjusted EBIT for the quarter was CAD 667 million, up 11.2% year-over-year, with an industry-leading margin of 16.6% [10] - Adjusted net earnings were CAD 472 million, reflecting an increase of CAD 33 million year-over-year, with a margin of 11.8% [11] - The company generated CAD 663 million in cash from operations, accounting for 16.5% of total revenue [12] Business Line Data and Key Metrics Changes - Managed services revenue grew by 6% in constant currency, aligning with client demand amid challenging macroeconomic conditions [14] - The UK and Australia segment saw growth of 28% due to the acquisition of BJSS [6] - The U.S. segments combined growth was 5.7%, driven by mergers and acquisitions [7] Market Data and Key Metrics Changes - Bookings for the quarter were CAD 4.8 billion, resulting in a book-to-bill ratio of 119%, with U.S. Federal bookings at 185% [8] - The contracted backlog reached CAD 31.5 billion, equivalent to two times revenue [10] Company Strategy and Development Direction - The company focuses on investing in CGI through a share buyback program to enhance EPS while returning cash to shareholders [6] - The strategy includes expanding managed services and IP offerings to improve client efficiency, particularly during economic challenges [5] - The company aims to lead in digital transformation, emphasizing AI-driven business transformation as a core strategy [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the federal business post-shutdown, citing strong bookings prior to the shutdown [41] - The company anticipates continued demand for managed services as clients seek to reduce operational costs and reinvest savings into technology initiatives [34] - Despite market uncertainties, management does not foresee a long-term decline in IT budgets, expecting clients to rebalance spending towards managed services and AI [33][58] Other Important Information - The Board of Directors approved a quarterly cash dividend of CAD 0.17 per share, marking a 13% increase [12] - The company closed five acquisitions in fiscal 2025, all expected to be accretive within the first year [16] Q&A Session Summary Question: Impact of federal shutdown on bookings and optimism for federal business - Management noted strong bookings at 185% prior to the shutdown and expects growth to resume once the government reopens [41] Question: Potential margin uplift from AI adoption - Management indicated that AI is enhancing margins through improved managed services and internal process optimizations [42][43] Question: Outcome-based pricing strategy and its protection against pricing pressure - Management clarified that while pricing pressure exists, their outcome-based pricing model allows for better value delivery and profitability [45][48] Question: Revenue per employee growth and its drivers - Management attributed the 5% increase in revenue per employee to AI utilization and geographic expansion, particularly in APAC and Poland [49][50] Question: Book-to-bill ratio and M&A impact - Management explained that M&A does not directly affect the book-to-bill ratio, as backlog from acquisitions is included post-closing [52] Question: AI's impact on implementation processes - Management acknowledged that while AI brings savings, complex client environments still require human oversight [56] Question: Partnership strategy and growth - Management emphasized a broad partnership strategy with various technology firms, adapting to client needs based on region and industry [62] Question: Planned runoff of lower-margin work from acquisitions - Management indicated that while some lower-margin projects may be phased out, the impact will not be material [64] Question: Demand trends in financial services and consulting - Management noted strong demand for AI-related consulting, while traditional business consulting remains flat [71] Question: M&A pipeline and future opportunities - Management expressed optimism about the M&A environment, noting lower valuations and a strong pipeline of potential acquisitions [75][76] Question: AI readiness in M&A targets - Management confirmed that AI expertise is a key consideration in evaluating potential M&A targets [81] Question: Opportunities with the Canadian federal government - Management highlighted potential growth areas in sovereign cloud initiatives and defense-related IT projects [83][85]

Core Viewpoint - CGI Group reported quarterly earnings of $1.55 per share, exceeding the Zacks Consensus Estimate of $1.53 per share, and up from $1.41 per share a year ago, indicating a positive earnings surprise of +1.31% [1][2] Financial Performance - The company posted revenues of $2.91 billion for the quarter ended September 2025, which was below the Zacks Consensus Estimate by 0.42%, but an increase from $2.68 billion year-over-year [3] - Over the last four quarters, CGI has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2][3] Stock Performance - CGI shares have declined approximately 21.9% since the beginning of the year, contrasting with the S&P 500's gain of 15.1% [4] - The current Zacks Rank for CGI is 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [7] Future Outlook - The consensus EPS estimate for the upcoming quarter is $1.58 on revenues of $3.03 billion, and for the current fiscal year, it is $6.53 on revenues of $12.16 billion [8] - The outlook for the industry, particularly the Computer - Services sector, is currently in the bottom 40% of Zacks industries, which may impact CGI's stock performance [9]

Financial Performance - Q4 F2025 - Revenue reached $4.01 billion, a 9.7% increase compared to Q4 F2024[13] - Constant currency revenue growth was 5.5%[13,36] - Adjusted EBIT increased by 11.2% to $667 million, with a margin of 16.6%, up 20 bps from Q4 F2024[13,41] - Adjusted net earnings increased by 7.4% to $472 million[13] - Adjusted diluted EPS increased by 10.9% to $2.13[13,46] Financial Performance - Fiscal Year 2025 - Revenue reached $15.9 billion, an 8.4% increase compared to F2024[32,56] - Constant currency revenue growth was 4.6%[32,56] - Adjusted EBIT increased by 8.1% to $2.61 billion, with a margin of 16.4%[32,64] - Adjusted net earnings increased by 6.0% to $1.87 billion[32] - Adjusted diluted EPS increased by 8.9% to $8.30[32,68] Other Key Metrics - Book-to-bill ratio for Q4 F2025 was 119.2%, and 110.4% for the last twelve months[15,30] - Cash provided by operating activities for Q4 F2025 was $663 million, representing 16.5% of revenue[28] - Long-term debt and lease liabilities reached $4.33 billion, up $1.02 billion from Q4 F2024[49]

Core Insights - CGI reported a revenue of $4.01 billion for Q4-F2025, reflecting a year-over-year growth of 9.7%, and a constant currency growth of 5.5% [5][7][20] - The company announced a 13% increase in its quarterly cash dividend to $0.17 per share, payable on December 19, 2025 [22] - The book-to-bill ratio reached 119.2% in Q4-F2025, indicating strong demand for CGI's services [5][9] Financial Performance Highlights - For Q4-F2025, earnings before income taxes were $516.2 million, down 12.9% year-over-year, with a margin of 12.9% [6][7] - Adjusted earnings before interest and taxes were $667.4 million, up 11.2% year-over-year, with a margin of 16.6% [7][8] - Net earnings for Q4-F2025 were $381.4 million, down 12.5% year-over-year, resulting in a diluted EPS of $1.72, a decrease of 9.9% [8][9] Annual Performance Overview - For Fiscal 2025, CGI reported total revenue of $15.91 billion, an 8.4% increase year-over-year, with a constant currency growth of 4.6% [13][14] - Earnings before income taxes for Fiscal 2025 were $2,242.2 million, down 2.1% year-over-year, with a margin of 14.1% [13][14] - Adjusted net earnings for Fiscal 2025 were $1,871.5 million, up 6.0% year-over-year, with an adjusted diluted EPS of $8.30, an increase of 8.9% [15][36] Investment and Shareholder Returns - During Q4-F2025, CGI invested $80.5 million back into its business and acquired businesses for $237.5 million net of cash acquired [11] - The company returned $33.3 million to shareholders through dividends in Q4-F2025 [11] - For Fiscal 2025, CGI returned $135.1 million to shareholders through dividend payments [16] Debt and Financial Ratios - As of September 30, 2025, CGI's long-term debt and lease liabilities were $4.33 billion, up from $3.31 billion the previous year [17][36] - The net debt stood at $3.45 billion, an increase from $1.82 billion year-over-year, with a net debt-to-capitalization ratio of 25.1% [17][36]

Financial Performance - Revenue for the year ended September 30, 2025, was CAD 15,912,673, an increase of 8.4% from CAD 14,676,152 in 2024[28] - Operating expenses totaled CAD 13,670,483 for 2025, compared to CAD 12,385,201 in 2024, reflecting an increase of 10.4%[28] - Net earnings for 2025 were CAD 1,658,285, a decrease of 2.0% from CAD 1,692,715 in 2024[28] - Basic earnings per share for 2025 were CAD 7.45, slightly up from CAD 7.42 in 2024[28] - Comprehensive income for 2025 was CAD 2,209,376, an increase of 11.3% from CAD 1,984,993 in 2024[30] - Cash provided by operating activities was CAD 2,234,197, an increase from CAD 2,204,983 in the previous year[36] - The company declared cash dividends of CAD 135,052, compared to none in the previous year[36] Assets and Liabilities - Total current assets increased to CAD 5,053,179, up from CAD 4,817,306, representing a growth of 4.9% year-over-year[32] - Total liabilities rose to CAD 9,239,496, compared to CAD 7,257,478 in 2024, marking an increase of 27.3%[32] - Total equity reached CAD 10,282,332, up from CAD 9,427,990, indicating a growth of 9.1%[34] - The company reported an increase in intangible assets to CAD 888,006 from CAD 718,575, a rise of 23.6%[32] - Trade accounts receivable increased to CAD 1,343,282 thousand as of September 30, 2025, up from CAD 1,117,712 thousand in 2024, representing a growth of 20.2%[153] - Funds held for clients rose to CAD 978,436 thousand as of September 30, 2025, compared to CAD 506,780 thousand in 2024, marking an increase of 93.1%[154] Business Acquisitions and Costs - The company incurred restructuring, acquisition, and related integration costs of CAD 285,031 in 2025, significantly higher than CAD 96,929 in 2024[28] - Business acquisitions net of cash acquired amounted to CAD 1,829,965, significantly higher than CAD 380,313 in 2024[36] - Apside-Advance SAS, acquired on August 28, 2025, represented 0.2% of revenue and 1.8% of total assets as of September 30, 2025[10] Revenue Recognition - The company recognizes revenue from managed IT and business process services over time as services are provided, aligning with contractual billings[61] - Revenue from business and strategic IT consulting and systems integration services is recognized over time, with fixed-fee arrangements using the percentage-of-completion method[63] - Revenue from software licenses is recognized at a point in time upon delivery, while maintenance services are recognized straight-line over the maintenance period[64] Taxation and Deferred Taxes - Current income tax expense for the year ended September 30, 2025, was $583,280,000, down from $744,336,000 in 2024, reflecting a decrease of 21.6%[169] - The effective income tax rate for the company was 26.0% for the year ended September 30, 2025, slightly lower than 26.1% in 2024[169] - As of September 30, 2025, the Company reported deferred tax assets of $239,284,000 and deferred tax liabilities of $(71,673,000), resulting in net deferred taxes of $167,611,000[171] Pension and Employee Benefits - The actuarial valuation of the CMG U.K. Pension Scheme reported a surplus of $38,071,000, with no supplementary contributions required[183] - The Logica U.K. Pension & Life Assurance Scheme reported a surplus of $94,000, with the Company contributing $367,000 during fiscal 2025[183] - The total defined benefit obligations amounted to $851,271,000, a decrease from $897,948,000 as of September 30, 2024, representing a reduction of approximately 5.2%[186] - The current service cost for the year ended September 30, 2025, was $16,290,000, an increase from $14,165,000 in 2024, representing a rise of about 15.0%[190] Financial Instruments and Provisions - Financial instruments are initially measured at fair value and classified based on management's model and cash flow characteristics[120] - Provisions are recognized for legal obligations, restructuring, and onerous contracts, with estimates reviewed regularly[104] - Total provisions rose to $183,996,000 as of September 30, 2025, compared to $46,422,000 in 2024, indicating a significant increase driven by additional provisions[166]