Company Overview - CGI Federal Inc. has completed the acquisition of Aeyon, enhancing its capabilities in digital transformation and AI technologies for U.S. Federal Government clients [1][2] - Aeyon specializes in data management, analytics, and intelligent automation, which complements CGI's existing offerings [1][2] - CGI Inc. reported a fiscal 2023 revenue of CA$14.30 billion and operates with a global workforce of 90,000 professionals [3] Strategic Implications - The acquisition strengthens CGI's relationships with key U.S. national security clients, including the Department of Defense, FAA, and NASA [1] - Aeyon's commitment to delivery excellence aligns with CGI's values, enhancing the combined entity's ability to meet client needs [2] - The merger is expected to create greater opportunities for employees and broaden the range of solutions offered to clients [2] Market Position - CGI is positioned as one of the largest independent IT and business consulting firms globally, focusing on various sectors including defense, healthcare, and intelligence [3] - The integration of Aeyon's advanced strategies is anticipated to accelerate mission outcomes for federal agencies facing complex challenges [2]

FAIRFAX, Va., Sept. 11, 2024 /PRNewswire/ -- CGI (TSX: GIB.A) (NYSE: GIB), one of the largest independent IT and business consulting services firms in the world, today announced its selection by Forbes as one of America's Best Employers for Women, placing it alongside those U.S. companies achieving the highest scores by 150,000 women surveyed at companies with at least 1,000 employees for Forbes' annual ranking. "At CGI, we are committed to sharing our progress in growing the representation of women at all ...

Stock Market Symbols GIB.A (TSX) GIB (NYSE) cgi.com/newsroom MONTRÉAL, Sept. 5, 2024 /PRNewswire/ - CGI (TSX: GIB.A) (NYSE: GIB), one of the world's largest business and IT consulting firms, has been named a Leader in Everest Group's Guidewire Services PEAK Matrix® Assessment 2024 for property and casualty (P&C) insurance. CGI was recognized for expanding Guidewire Services into growing markets, building local and offshore delivery capabilities, and adopting geospecific strategies in line with the company's ...

FAIRFAX, Va., Aug. 28, 2024 /PRNewswire/ -- CGI Federal Inc. (CGI), the wholly-owned U.S. operating subsidiary of CGI Inc. (NYSE: GIB) (TSX: GIB.A), today announced two contract awards from the U.S. Patent and Trademark Office (USPTO). Under these contracts, which have a combined total potential value of US$119 million, CGI will deliver operational, maintenance and security solutions and expertise in support of the global innovation community operated by USPTO. Under one of the awarded contracts, a 5-year B ...

Stock Market Symbols GIB.A (TSX) GIB (NYSE) cgi.com/newsroom NEW YORK, Aug. 13, 2024 /PRNewswire/ - CGI (TSX: GIB.A) (NYSE: GIB), one of the largest independent IT and business consulting services firms in the world, today announced its selection by the City of New York for maintenance of the STARS parking violation system, which runs on CGI Advantage Collections platform. CGI will partner with the city's Department of Finance under a new five-year contract with an optional two-year renewal to administer th ...

Stock Market Symbols GIB (NYSE) GIB.A (TSX) www.cgi.com/newsroom FAIRFAX, Va., Aug. 6, 2024 /PRNewswire/ - CGI Federal Inc. (CGI), the wholly-owned U.S. operating subsidiary of CGI Inc. (NYSE: GIB) (TSX: GIB.A), today announced a 2-year, US$378M extension of its contract with the U.S. Department of State (DoS) for end-to-end passport application processing services supporting the Bureau of Consular Affairs. By extending its longstanding collaboration with DoS, CGI will continue to deliver process efficienci ...

Luis Alvarez Please note all $ figures in $CAD, not $USD, unless otherwise noted. Introduction CGI Inc. (NYSE:GIB) (TSX:TSX:GIB.A:CA) is an IT consulting company with worldwide operations, employing close to 100,000 consultants globally. With global operations across various sectors including banking, communications, life sciences, manufacturing, energy, retail, and transportation, CGI is a well-diversified IT company that's demonstrated a track record of profitable and steady growth. The company has annual ...

Financial Data and Key Metrics - Revenue for Q3 2024 was $3.7 billion, up 1.3% YoY or 0.2% excluding foreign exchange impact [3] - Earnings before income taxes were $594 million, with a margin of 16.2%, up 80 basis points YoY [6] - Adjusted EBIT was $603 million, representing a margin of 16.4%, up 30 basis points YoY [6] - Net earnings were $440 million, with a margin of 12%, up 50 basis points YoY [7] - Diluted EPS was $1.91, an increase of 9% YoY [7] - Cash provided by operating activities was $497 million, representing 13.5% of total revenue [7] - Global backlog reached $27.6 billion, or 1.9 times revenue [5] Business Line Performance - Strongest segments were Northwest and Central East Europe with 10% constant currency growth, Asia Pacific at 5.4%, Finland, Poland, and Baltics at 3.2%, and US commercial and state government at 2% [3] - IP grew at 5.2% constant currency, representing 22.5% of total revenue, up 120 basis points YoY [5] - Bookings were strong at $4.3 billion, with a book-to-bill ratio of 117% [5] - Managed services and IP engagements drove bookings, with managed services book-to-bill at 139% and IP book-to-bill at 129% [12] Market Performance - Government sector showed the highest growth at 4.1% constant currency, followed by manufacturing, retail, and distribution at 2.2% [4] - US federal bookings were particularly strong with a book-to-bill ratio of 209%, followed by UK and Australia at 153%, and Western and Southern Europe at 123% [5] - Asia Pacific, Canada, and US Federal segments showed strong margins at 31%, 22%, and 17% respectively [7] Strategic Direction and Industry Competition - The company is focusing on managed services and IP engagements to drive growth, with a strong emphasis on government sector contracts [12][13] - CGI is investing in AI and generative AI technologies, with a 20% sequential increase in AI-related projects [22] - The company is pursuing accretive acquisitions, such as the recent purchase of Aeyon, which expands its US federal capabilities [24][68] Management Commentary on Business Environment and Outlook - Management noted signs of stabilization in the macro business environment, with clients beginning to solidify future plans [17] - The company expects continued delays in decision-making for stand-alone SI&C projects but remains optimistic about the demand for managed services and IP solutions [18] - CGI is enhancing its managed services delivery approach through the expansion of its CGI DigiOps platform, which leverages AI technologies [21] Other Important Information - CGI announced a dividend program, with a quarterly cash dividend of $0.15 per share starting in Q1 2025 [9] - The company completed two strategic acquisitions, adding 875 consultants and professionals to its workforce [8] - CGI's effective tax rate for the quarter was 25.9%, with future quarters expected to be in the range of 25% to 26.5% [7] Q&A Session Summary Question: Why initiate a dividend now? - The dividend was initiated as an additional mechanism to return value to shareholders while maintaining financial flexibility for investments and acquisitions [27] Question: What is the M&A environment like? - The M&A environment is active, with reasonable valuations and increased inbound calls, particularly from smaller companies [29] Question: How is the demand environment shaping up? - The demand environment is showing signs of stabilization, with managed services offsetting softness in SI&C projects [32] Question: What does the Aeyon acquisition bring? - Aeyon brings new avenues in the national security space and complementary government-wide contract vehicles, enhancing CGI's US federal capabilities [33][34] Question: What drives margin expansion? - Margin expansion is driven by the mix of managed services and IP, leveraging global delivery and cost optimization programs [35] Question: How is AI integrated into CGI's strategy? - AI is increasingly integrated into CGI's engagements, with a focus on proprietary solutions like CGI Pulse AI and partnerships with hyperscalers [38][39] Question: What is the outlook for consulting? - Consulting remains important, particularly in AI-related data and business transformation, though recovery will be slower [48] Question: How is pricing pressure affecting the market? - Pricing pressure is more about outcomes and efficiencies rather than unit price, with clients seeking quality and operational improvements [60][61] Question: What are the geographic growth variances? - Europe is performing better than North America, with smaller geographies like Finland and Poland showing more agility and growth [65][66] Question: What is the focus of M&A? - M&A focuses on building out metro markets across verticals, with an emphasis on new client relationships and capabilities [68]

CGI Group (GIB) came out with quarterly earnings of $1.40 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $1.34 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this information technology and business process services company would post earnings of $1.44 per share when it actually produced earnings of $1.46, delivering a surprise of 1.39%. Over the last four quarters, the company has surpassed consensus EPS esti ...

[Introduction and Key Metrics](index=2&type=section&id=Introduction%20and%20Key%20Metrics) This section outlines the company's key performance metrics, including GAAP and non-GAAP measures, and details its nine global operating segments [Key Performance Measures](index=4&type=section&id=Key%20Performance%20Measures) The company utilizes a combination of IFRS-compliant (GAAP) and non-GAAP measures to assess performance, providing supplemental information on core operating performance, business volume, and financial leverage - Management uses non-GAAP measures like 'Revenue prior to foreign currency impact' and 'Adjusted EBIT' to facilitate period-to-period comparisons of business performance by excluding currency fluctuations and specific non-operational items[9](index=9&type=chunk)[10](index=10&type=chunk)[13](index=13&type=chunk) - Key growth indicators tracked are Bookings (new contracts), Backlog (contracted future revenue), and the Book-to-bill ratio, which management targets to keep above 100% over a trailing twelve-month period[10](index=10&type=chunk) - Profitability is assessed using standard metrics like Net Earnings and Diluted EPS, alongside non-GAAP measures such as 'Net earnings excluding specific items' to show performance from day-to-day operations[15](index=15&type=chunk)[17](index=17&type=chunk) - Liquidity and capital structure are monitored through metrics like Days Sales Outstanding (DSO), Net Debt, Net Debt to Capitalization Ratio, and Return on Invested Capital (ROIC) to ensure financial flexibility and efficient capital allocation[20](index=20&type=chunk) [Reporting Segments](index=7&type=section&id=Reporting%20Segments) The company is managed through nine operating segments based on geography and service delivery, with a recent centralization of administrative activities impacting the Asia Pacific segment's comparative data - CGI is organized into nine key operating segments, primarily defined by geographic regions such as Western and Southern Europe, U.S. Commercial and State Government, and Canada[21](index=21&type=chunk) - Effective October 1, 2023, certain internal administrative activities previously reported under the Asia Pacific segment were centralized into a corporate function, and prior period data was restated to reflect this change[22](index=22&type=chunk) [Corporate Overview](index=10&type=section&id=1.%20Corporate%20Overview) Founded in 1976, CGI is a global IT and business consulting firm with approximately 90,000 professionals, providing end-to-end services across various industries under a robust governance model [About CGI](index=10&type=section&id=1.1.%20ABOUT%20CGI) Founded in 1976, CGI is a global IT and business consulting firm with approximately 90,000 professionals, providing end-to-end services across various industries under a robust governance model - CGI is a leading IT and business consulting firm with approximately **90,000 professionals** worldwide, helping clients with their digital transformation[27](index=27&type=chunk) - The company's service portfolio includes: - Business and strategic IT consulting & systems integration - Managed IT and business process services - Intellectual property (IP) solutions[29](index=29&type=chunk)[31](index=31&type=chunk) - CGI targets key industries such as financial services, government, manufacturing, retail, communications, utilities, and health[30](index=30&type=chunk) - The company operates under a strict governance model called the CGI Management Foundation, which ensures consistent management practices and high-quality service delivery globally[35](index=35&type=chunk)[36](index=36&type=chunk) [Highlights and Key Performance Measures](index=12&type=section&id=2.%20Highlights%20and%20Key%20Performance%20Measures) In Q3 2024, CGI reported revenue of **$3.67 billion**, a **1.3%** year-over-year increase, with strong bookings of **$4.28 billion** and healthy liquidity, while reducing net debt to **$1.85 billion** [Selected Quarterly Information & Key Performance Measures](index=12&type=section&id=2.1.%20SELECTED%20QUARTERLY%20INFORMATION%20%26%20KEY%20PERFORMANCE%20MEASURES) In Q3 2024, CGI reported revenue of **$3.67 billion**, a **1.3%** year-over-year increase, with strong bookings of **$4.28 billion** and healthy liquidity, while reducing net debt to **$1.85 billion** Q3 2024 Key Performance Measures (vs. Q3 2023) | Metric | Q3 2024 | Q3 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $3,672.0 M | $3,623.4 M | +1.3% | | Constant Currency Revenue Growth | 0.2% | 6.3% | -6.1 p.p. | | Bookings | $4,280 M | $4,388 M | -2.5% | | Book-to-bill ratio | 116.6% | 121.1% | -4.5 p.p. | | Adjusted EBIT | $602.8 M | $584.8 M | +3.1% | | Adjusted EBIT Margin | 16.4% | 16.1% | +0.3 p.p. | | Net Earnings | $440.1 M | $415.0 M | +6.1% | | Diluted EPS | $1.91 | $1.75 | +9.1% | | Cash from Operating Activities | $496.7 M | $409.1 M | +21.4% | [Stock Performance](index=13&type=section&id=2.2.%20STOCK%20PERFORMANCE) The company's stock performance is detailed, along with significant capital return activities, including the repurchase of **3.5 million** Class A shares for **$488.9 million** in Q3 2024 - During Q3 2024, the company repurchased **3,506,678 Class A Shares** for **$488.9 million** at a weighted average price of **$139.43** under its NCIB[48](index=48&type=chunk) - For the nine months ended June 30, 2024, a total of **6,190,108 Class A Shares** were purchased for cancellation for **$875.9 million**[49](index=49&type=chunk) - As of July 26, 2024, there were **203,787,994 Class A** subordinate voting shares and **24,122,758 Class B** multiple voting shares outstanding[51](index=51&type=chunk) [Investment in Subsidiaries](index=14&type=section&id=2.3.%20INVESTMENT%20IN%20SUBSIDIARIES) CGI is actively pursuing its 'Buy' strategy through acquisitions, including Momentum Consulting Corp. for **$53.3 million** and an agreement to acquire Aeyon LLC, adding a total of **900 professionals** - Acquired Momentum Consulting Corp. on October 10, 2023, for **$53.3 million**, adding **175 professionals**[52](index=52&type=chunk) - Announced a definitive agreement to acquire Aeyon LLC on June 22, 2024, which is expected to add **725 professionals** focused on the U.S. Federal Government sector[53](index=53&type=chunk) [Subsequent Event](index=14&type=section&id=2.4.%20SUBSEQUENT%20EVENT) After the quarter's end, CGI acquired the assets of Celero Solutions' credit union business in Canada for **$13.0 million**, adding over **150 professionals** - On July 3, 2024, CGI acquired assets of Celero Solutions' credit union business for **$13.0 million**, adding more than **150 professionals** in Canada[54](index=54&type=chunk) [Announcement of Dividend Program](index=15&type=section&id=2.5.%20ANNOUNCEMENT%20OF%20DIVIDEND%20PROGRAM) CGI announced the approval of a new dividend program, signaling a new phase in its capital allocation strategy, with a planned quarterly cash dividend of **$0.15 per share** starting in fiscal 2025 - The Board of Directors has approved a new dividend program, with the intention to pay a quarterly cash dividend of **$0.15 per share**[55](index=55&type=chunk) - The first dividend payment is planned for the first quarter of fiscal 2025, subject to board declaration each quarter[55](index=55&type=chunk) [Financial Review](index=16&type=section&id=3.%20Financial%20Review) This section provides a detailed financial overview, including bookings, revenue by segment, earnings before income taxes, Adjusted EBIT, net earnings, and earnings per share [Bookings and Book-to-Bill Ratio](index=16&type=section&id=3.1.%20BOOKINGS%20AND%20BOOK-TO-BILL%20RATIO) In Q3 2024, CGI achieved bookings of **$4.3 billion**, leading to a strong book-to-bill ratio of **116.6%**, with the U.S. Federal segment showing exceptional performance Q3 2024 Bookings | Metric | Value | | :--- | :--- | | Total Bookings | $4.3 billion | | Book-to-Bill Ratio | 116.6% | | Trailing 12-Month Book-to-Bill | 111.7% | - New bookings were split with **48%** from new business and **52%** from renewals and extensions[58](index=58&type=chunk) - The U.S. Federal segment had the highest trailing twelve-month book-to-bill ratio at **136.9%**, followed by Western and Southern Europe at **116.8%**[59](index=59&type=chunk) [Revenue by Segment](index=19&type=section&id=3.4.%20REVENUE%20BY%20SEGMENT) For Q3 2024, total revenue was **$3.67 billion**, up **1.3%** YoY (**0.2%** in constant currency), driven by government and MRD verticals, acquisitions, and an extra billing day, offset by lower demand in financial services and communications Revenue Performance (Three months ended June 30) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $3,672.0 M | $3,623.4 M | +1.3% | | Constant Currency Growth | 0.2% | - | - | Revenue Performance (Nine months ended June 30) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $11,015.8 M | $10,789.0 M | +2.1% | | Constant Currency Growth | 0.5% | - | - | [Western and Southern Europe](index=20&type=section&id=3.4.1.%20Western%20and%20Southern%20Europe) Q3 revenue for this segment decreased by **2.0%** to **$643.6 million** (**-2.8%** in constant currency), primarily due to reduced demand in financial services and MRD vertical markets Western and Southern Europe Revenue (Q3) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $643.6 M | $656.8 M | -2.0% | | Constant Currency Change | - | - | -2.8% | [U.S. Commercial and State Government](index=20&type=section&id=3.4.2.%20U.S.%20Commercial%20and%20State%20Government) This segment's Q3 revenue grew by **3.9%** to **$592.2 million** (**+2.0%** in constant currency), driven by organic expansion in government, communications, and MRD verticals, and IP license sales U.S. Commercial and State Government Revenue (Q3) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $592.2 M | $569.8 M | +3.9% | | Constant Currency Change | - | - | +2.0% | [Canada](index=21&type=section&id=3.4.3.%20Canada) The Canada segment saw a Q3 revenue decrease of **2.3%** to **$506.8 million**, attributed to lower demand from the communications & utilities and financial services sectors Canada Revenue (Q3) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $506.8 M | $518.8 M | -2.3% | | Constant Currency Change | - | - | -2.3% | [U.S. Federal](index=21&type=section&id=3.4.4.%20U.S.%20Federal) Q3 revenue in the U.S. Federal segment increased by **1.4%** to **$499.0 million**, but decreased by **0.5%** in constant currency due to a project cost reevaluation U.S. Federal Revenue (Q3) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $499.0 M | $492.4 M | +1.4% | | Constant Currency Change | - | - | -0.5% | [Scandinavia and Central Europe](index=21&type=section&id=3.4.5.%20Scandinavia%20and%20Central%20Europe) This segment's Q3 revenue declined by **1.6%** to **$410.0 million** (**-2.2%** in constant currency), driven by lower demand in communications & utilities and MRD Scandinavia and Central Europe Revenue (Q3) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $410.0 M | $416.7 M | -1.6% | | Constant Currency Change | - | - | -2.2% | [U.K. and Australia](index=22&type=section&id=3.4.6.%20U.K.%20and%20Australia) Q3 revenue for U.K. and Australia grew **2.2%** to **$390.0 million**, but declined **0.4%** in constant currency due to lower demand in communications & utilities and financial services U.K. and Australia Revenue (Q3) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $390.0 M | $381.5 M | +2.2% | | Constant Currency Change | - | - | -0.4% | [Finland, Poland and Baltics](index=22&type=section&id=3.4.7.%20Finland,%20Poland%20and%20Baltics) This segment reported strong Q3 revenue growth of **4.3%** to **$220.2 million** (**+3.2%** in constant currency), driven by organic growth across most vertical markets Finland, Poland and Baltics Revenue (Q3) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $220.2 M | $211.2 M | +4.3% | | Constant Currency Change | - | - | +3.2% | [Northwest and Central-East Europe](index=22&type=section&id=3.4.8.%20Northwest%20and%20Central-East%20Europe) This segment delivered excellent Q3 revenue growth of **9.9%** to **$212.8 million** (**+10.0%** in constant currency), attributed to broad organic growth and higher IP-based revenue Northwest and Central-East Europe Revenue (Q3) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $212.8 M | $193.6 M | +9.9% | | Constant Currency Change | - | - | +10.0% | [Asia Pacific](index=22&type=section&id=3.4.9.%20Asia%20Pacific) The Asia Pacific segment's Q3 revenue increased by **5.7%** to **$241.6 million** (**+5.4%** in constant currency), driven by continued high demand for offshore delivery services Asia Pacific Revenue (Q3) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $241.6 M | $228.6 M | +5.7% | | Constant Currency Change | - | - | +5.4% | [Earnings Before Income Taxes](index=25&type=section&id=3.6.%20EARNINGS%20BEFORE%20INCOME%20TAXES) Earnings before income taxes for Q3 2024 were **$594.0 million**, with the margin improving to **16.2%**, and Adjusted EBIT reaching **$602.8 million** (**16.4%** margin), driven by operational efficiencies and lower net finance costs Earnings Reconciliation (Three months ended June 30) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Earnings before income taxes | $594.0 M | $559.0 M | | EBT Margin | 16.2% | 15.4% | | Adjusted EBIT | $602.8 M | $584.8 M | | Adjusted EBIT Margin | 16.4% | 16.1% | - Acquisition-related and integration costs were minimal at **$0.1 million** in Q3 2024, compared to **$13.0 million** in Q3 2023[112](index=112&type=chunk)[113](index=113&type=chunk) - The Cost Optimization Program, completed by March 31, 2024, incurred no costs in Q3 2024, with a total program cost of **$100.0 million**[117](index=117&type=chunk) - Net finance costs decreased by **$4.0 million** in Q3 2024, mainly due to higher interest income and the repayment of a term loan in December 2023[118](index=118&type=chunk) [Adjusted EBIT by Segment](index=26&type=section&id=3.7.%20ADJUSTED%20EBIT%20BY%20SEGMENT) Total Adjusted EBIT for Q3 2024 was **$602.8 million**, an increase of **3.1%** YoY, with the margin expanding to **16.4%** due to cost savings and an extra billing day, despite some negative impacts Adjusted EBIT Margin by Segment (Q3 2024 vs Q3 2023) | Segment | Q3 2024 Margin | Q3 2023 Margin | | :--- | :--- | :--- | | **Total CGI** | **16.4%** | **16.1%** | | Western and Southern Europe | 12.1% | 12.3% | | U.S. Commercial and State Government | 15.9% | 17.3% | | Canada | 21.7% | 22.3% | | U.S. Federal | 16.7% | 17.7% | | Scandinavia and Central Europe | 6.9% | 7.0% | | U.K. and Australia | 16.0% | 14.6% | | Finland, Poland and Baltics | 16.9% | 10.8% | | Northwest and Central East-Europe | 15.7% | 12.0% | | Asia Pacific | 31.3% | 31.6% | [Net Earnings and Earnings Per Share](index=29&type=section&id=3.8.%20NET%20EARNINGS%20AND%20EARNINGS%20PER%20SHARE) Net earnings for Q3 2024 increased by **6.1%** to **$440.1 million**, with diluted EPS growing **9.1%** to **$1.91**, benefiting from higher earnings and a **2.7%** reduction in share count Net Earnings and EPS (Three months ended June 30) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Net Earnings | $440.1 M | $415.0 M | +6.1% | | Net Earnings Margin | 12.0% | 11.5% | +0.5 p.p. | | Diluted EPS | $1.91 | $1.75 | +9.1% | | Diluted EPS (Excluding specific items) | $1.91 | $1.80 | +6.1% | - The effective tax rate for Q3 2024 was **25.9%**, nearly unchanged from **25.8%** in Q3 2023[141](index=141&type=chunk)[142](index=142&type=chunk) - The weighted average number of diluted shares outstanding decreased by **2.7%** YoY, contributing to higher EPS growth[141](index=141&type=chunk)[145](index=145&type=chunk) [Liquidity](index=31&type=section&id=4.%20Liquidity) This section details the company's cash flow, capital resources, and key liquidity metrics, highlighting strong operational cash generation and improved net debt position [Interim Condensed Consolidated Statements of Cash Flows](index=31&type=section&id=4.1.%20INTERIM%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) In Q3 2024, cash provided by operating activities increased significantly to **$496.7 million**, driven by higher net earnings and better client collections, while financing activities primarily used cash for share repurchases Cash Flow Summary (Three months ended June 30) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Operating Activities | $496.7 M | $409.1 M | | Investing Activities | $26.8 M | ($178.8 M) | | Financing Activities | ($519.4 M) | ($113.6 M) | - The increase in cash from operations for the quarter was mainly due to the timing of client collections and increased net earnings[153](index=153&type=chunk)[156](index=156&type=chunk) - The significant increase in cash used in financing activities was driven by a large increase in share repurchases, from **$53.1 million** in Q3 2023 to **$499.3 million** in Q3 2024[160](index=160&type=chunk) [Capital Resources](index=35&type=section&id=4.2.%20CAPITAL%20RESOURCES) As of June 30, 2024, CGI had total available capital resources of **$2.68 billion**, including **$1.16 billion** in cash and **$1.50 billion** under its revolving credit facility, deemed sufficient for operations and growth Available Capital Resources (as of June 30, 2024) | Source | Amount (CAD) | | :--- | :--- | | Cash and cash equivalents | $1,155.4 M | | Unsecured committed revolving credit facility | $1,496.3 M | | **Total** | **$2,678.8 M** | - The company maintained a positive working capital of **$627.4 million** and was in compliance with all financial covenants as of June 30, 2024[165](index=165&type=chunk)[166](index=166&type=chunk) [Selected Measures of Capital Resources and Liquidity](index=36&type=section&id=4.5.%20SELECTED%20MEASURES%20OF%20CAPITAL%20RESOURCES%20AND%20LIQUIDITY) Key liquidity and capital metrics showed improvement, with net debt decreasing to **$1.85 billion** and the net debt to capitalization ratio improving to **17.2%**, alongside increased ROIC and better DSO Key Capital and Liquidity Ratios (as of June 30) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net Debt | $1,854.0 M | $2,279.6 M | | Net Debt to Capitalization Ratio | 17.2% | 21.7% | | Return on Invested Capital (ROIC) | 16.1% | 15.7% | | Days Sales Outstanding (DSO) | 42 days | 44 days | - The decrease in net debt and the net debt to capitalization ratio was primarily driven by strong cash generation, partially offset by share repurchases[172](index=172&type=chunk) [Risk Environment](index=44&type=section&id=8.%20Risk%20Environment) This section outlines the company's exposure to external, industry-specific, and business-related risks, along with information on ongoing legal proceedings [Risks and Uncertainties](index=44&type=section&id=8.1.%20RISKS%20AND%20UNCERTAINTIES) The company faces a range of risks categorized as external, industry-related, and business-specific, including economic volatility, intense competition, and challenges in managing global growth and cybersecurity threats [External Risks](index=44&type=section&id=8.1.1.%20External%20Risks) CGI is exposed to external risks including volatile economic and political conditions, inflation, and pandemics, which can disrupt operations, increase costs, and reduce demand for services - Volatile economic and political conditions can negatively impact client business activity, leading to contract cancellations, reductions, or delays[221](index=221&type=chunk)[222](index=222&type=chunk) - The company is exposed to risks from inflation, which could increase labor and operating costs, potentially harming profitability if not offset by price increases[225](index=225&type=chunk)[227](index=227&type=chunk) - Pandemics can cause significant business disruptions, increase cybersecurity risks due to remote work, and negatively affect client financial viability[228](index=228&type=chunk)[231](index=231&type=chunk) [Risks Related to our Industry](index=46&type=section&id=8.1.2.%20Risks%20Related%20to%20our%20Industry) The IT services market is highly competitive, requiring continuous innovation and adaptation to new technology trends like AI, while also managing risks related to intellectual property infringement - The company operates in a highly competitive global market, facing pressure on pricing from competitors with greater resources or specialized efficiencies[237](index=237&type=chunk) - Failure to keep pace with emerging business demands and technology trends, such as artificial intelligence (AI), could adversely affect client retention and new business acquisition[240](index=240&type=chunk) - The company faces risks of infringing on others' intellectual property rights, which could lead to costly litigation, and challenges in protecting its own IP, especially in countries with limited legal protection[241](index=241&type=chunk)[243](index=243&type=chunk) [Risks Related to our Business](index=47&type=section&id=8.1.3.%20Risks%20Related%20to%20our%20Business) Business-related risks are extensive, covering the successful execution of the 'Build and Buy' strategy, talent retention, cybersecurity, data privacy compliance, and managing financial risks like debt and currency volatility - Successful implementation of the 'Build and Buy' growth strategy depends on identifying suitable acquisition targets and integrating them effectively, which involves significant management attention and operational challenges[249](index=249&type=chunk)[252](index=252&type=chunk) - The company faces significant risks from security incidents and cyberattacks, where a failure to protect company and client data could lead to legal liability, financial loss, and reputational damage[285](index=285&type=chunk)[286](index=286&type=chunk) - Attracting and retaining qualified IT professionals is critical, as failure to do so could result in lost revenue or increased costs[272](index=272&type=chunk) - Compliance with a wide variety of international laws and regulations, including data privacy (GDPR), anti-corruption, and tax laws, is complex and poses a significant risk[278](index=278&type=chunk)[283](index=283&type=chunk) [Legal Proceedings](index=57&type=section&id=8.2.%20LEGAL%20PROCEEDINGS) The company is involved in various routine legal proceedings, audits, and claims, but management does not anticipate any material adverse effect on its financial position or operations from current matters - CGI is involved in routine legal proceedings and claims but does not expect any current matter to have a material adverse effect on its financial position or business activities[306](index=306&type=chunk)