Core Insights - The rise of On-Demand technologies is reshaping business operations, but increasing costs, complexity, and governance gaps are jeopardizing returns [2][4][5] - Organizations are transitioning from capital-intensive IT investments to flexible, consumption-based models, with On-Demand tech expected to grow from 29% to 41% of IT budgets in the next year [3][4] - Despite the benefits of On-Demand technologies, many organizations struggle with cost management and achieving expected returns on investment [5][6] Cost and Complexity Challenges - 82% of executives report significant increases in costs associated with cloud, SaaS, and Gen AI, driven by inflation and digital infrastructure demands [6] - 76% of organizations exceeded their public cloud budgets by an average of 10%, with 68% overspending on Gen AI and 52% on SaaS [6] - Underutilized resources and decentralized procurement are major contributors to budget overruns [6] Governance and Management Issues - 60% of organizations utilize cloud cost management tools, but only 37% assess their effectiveness [7] - 76% of organizations have or plan to establish FinOps teams, yet most remain narrowly focused and operational [7] - Only 2% of organizations with a dedicated FinOps function cover cloud, SaaS, and Gen AI holistically [7] Sustainability Considerations - 53% of organizations acknowledge that suboptimal usage of On-Demand tech leads to excessive energy consumption and increased carbon emissions [8] - Only 36% have a strategy for integrating sustainability into FinOps, despite the potential for cost reduction and carbon footprint minimization [8] Research Methodology - The Capgemini Research Institute conducted a survey of 1,000 executives from global organizations with annual revenues of at least $1 billion, focusing on On-Demand technologies across 12 sectors and 14 countries [9]

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Global IT Services - **Current Outlook**: Downgraded to Cautious for the US IT Services industry, with Europe also seen as disadvantaged. India IT Services remains In-Line, while Latin America is expected to experience lower growth [12][30][20]. Core Insights - **AI Impact**: AI is prioritized in customer budgets, which is limiting spending on traditional IT services. This shift is expected to pressure returns on invested capital (ROIC) as companies invest in their own intellectual property (IP) [12][16][21]. - **ROIC Trends**: US IT Services ROIC has declined from 50% in 2016 to 22% in 2024, with projections indicating further downward pressure. The industry could see ROIC fall to low teens by 2030 under base case scenarios, and potentially to around 5% in bear cases [33][18][26]. - **Contract Pricing**: New contracts are incorporating AI-driven productivity enhancements, potentially reducing costs by 20-30% immediately, which shifts risks to IT Services companies [17][22]. Financial Adjustments - **Price Target Changes**: - Accenture Plc: Downgraded from $325 to $271 - EPAM Systems Inc: Downgraded from $210 to $175 - TaskUs, Inc.: Downgraded from Overweight to Equal-weight with a price target of $16.50 [14][13]. - **Valuation Pressures**: Despite significant share price declines (~14% YTD), the outlook remains cautious due to expected low growth rates and limited margin expansion [12][30]. Investment Dynamics - **M&A Activity**: The majority of future investments are expected to come from mergers and acquisitions (M&A), with a notable increase in M&A spend from $4.4 billion in 2022 to over $10 billion in 2024 [24][25]. - **Investment in IP**: Companies are expected to focus on developing their own IP through acquisitions and R&D, which may pressure ROIC in the near to mid-term [23][24]. Market Sentiment - **CIO Survey Insights**: The CIO survey indicates that while AI-related spending is increasing, it is often at the expense of other IT priorities, leading to a decline in the share of IT budgets allocated to traditional IT services [70][74]. - **Growth Expectations**: IT Services budget growth is projected at +2.5% for 2025, slightly down from previous expectations, indicating a cautious spending environment [74][75]. Additional Considerations - **Long-term Risks**: The long-term outlook for IT Services remains uncertain, with potential for further declines in ROIC and valuation pressures due to the competitive landscape and the need for significant investment in AI capabilities [26][30][18]. - **Regional Variations**: India IT Services are expected to maintain an In-Line view, with selective Overweight positions on certain companies due to relative valuations, while Latin America faces a lower growth outlook [20][32]. This summary encapsulates the critical insights and financial adjustments discussed in the conference call, highlighting the challenges and strategic shifts within the Global IT Services industry.

Media relations:Victoire GruxTel.: +33 6 04 52 16 55victoire.grux@capgemini.com Investor relations:Vincent BiraudTel.: +33 1 47 54 50 87vincent.biraud@capgemini.com Acquisition of WNS approved by its shareholders Paris, September 1, 2025 – Capgemini (Euronext Paris: CAP) today announced that the shareholders of WNS (NYSE: WNS) have approved the acquisition of WNS by Capgemini at the meetings of WNS shareholders held on August 29, 2025 for such purpose. On July 7, 2025, Capgemini and WNS announced that they ...

Core Viewpoint - Capgemini has signed an agreement to acquire Cloud4C, enhancing its position in the hybrid cloud managed services market and leveraging Cloud4C's automation-driven capabilities [3][5]. Company Overview - Capgemini is a global business and technology transformation partner with a workforce of 350,000 across more than 50 countries, focusing on digital and sustainable transitions [8]. - In 2024, Capgemini reported global revenues of €22.1 billion, with a projected 15% CAGR over 2024-2027 [9]. Acquisition Details - The acquisition of Cloud4C, a provider of automation-driven managed services, is expected to close in the coming months, pending regulatory approvals [3][5]. - Cloud4C specializes in hybrid and sovereign cloud environments, offering low-code, AI-ready platforms and comprehensive end-to-end service offerings [4]. Strategic Benefits - This acquisition will expand Capgemini's footprint in the cloud managed services market and enhance its capabilities in industry-specific packaged frameworks and generative AI solutions [5][6]. - The transaction is anticipated to create immediate cross-selling opportunities between Capgemini and Cloud4C's client bases [5]. Leadership and Vision - Aiman Ezzat, CEO of Capgemini, emphasized the strategic fit of Cloud4C due to its impressive track record in large-scale cloud transformations and its partnership with SAP [7]. - Sridhar Pinnapureddy, Chairman and Managing Director of Cloud4C, expressed excitement about joining Capgemini to scale cloud migration and management frameworks more efficiently [7].

Core Insights - Capgemini introduces TryZone IQ, a generative AI tool for real-time match insights during the Women's Rugby World Cup 2025, marking the first use of such technology in a Rugby World Cup [1][4] - The initiative aims to enhance the viewing experience for millions of fans by providing timely and relevant insights, as over half of sports fans now rely on AI for information [1][5] Group 1: Technology and Innovation - TryZone IQ is designed to convert raw match data into concise narratives, enhancing fan understanding of the game [2][3] - The AI engine updates historic and live match data every minute, producing informative summaries for analysts during broadcasts [3] - Capgemini collaborated with World Rugby and Opta to develop new on-screen visualizations, such as "Expected Tries" and "Attacking Threat," to improve viewer engagement [4] Group 2: Market Impact - The Women's Rugby World Cup 2025 is expected to attract over 20 million viewers, indicating significant growth and new audience engagement in women's rugby [5] - Capgemini's AI-driven insights aim to convert complex match data into engaging content, helping new fans connect with rugby [5] Group 3: Company Background - Capgemini has a strong heritage in rugby sponsorship, having partnered with major men's and women's competitions, including the Rugby World Cup [6] - The company has been actively promoting inclusivity in rugby through initiatives like the Women in Rugby program since 2022 [7] Group 4: Company Overview - Capgemini is a global business and technology transformation partner with 350,000 team members across more than 50 countries, reporting global revenues of €22.1 billion in 2024 [8]

Core Insights - Capgemini introduces TryZone IQ, a generative AI-powered tool for real-time match insights during the Women's Rugby World Cup 2025, marking the first use of such technology at a Rugby World Cup [1][4] - The initiative aims to enhance the viewing experience for millions of rugby fans by providing timely and relevant insights, as over half of sports fans now rely on AI for information [1][5] Company and Technology Development - Capgemini developed TryZone IQ by leveraging its expertise in technology, data, and AI, collaborating with World Rugby and Opta to understand fan behavior and preferences [2] - The AI engine processes live match data, updating every minute, to generate concise summaries for analysts, allowing for effective human-AI collaboration [3] Viewer Engagement and Experience - The tool includes new on-screen visualizations like "Expected Tries" and "Attacking Threat," which translate complex metrics into easily understandable formats for viewers [4] - Women's rugby is experiencing rapid growth, with over 20 million viewers expected for the 2025 World Cup, and Capgemini's insights aim to attract and engage new audiences [5] Sponsorship and Inclusivity Initiatives - Capgemini has a strong heritage in rugby sponsorship, having partnered with major men's and women's competitions, including the Women's Rugby World Cup 2025 [6] - The company has been actively promoting inclusivity in rugby through initiatives like the Women in Rugby program, supporting the development of female leaders in the sport [7] Company Overview - Capgemini is a global business and technology transformation partner, with 2024 global revenues reported at €22.1 billion, focusing on digital and sustainable transitions [8]

Group 1 - The article discusses the author's previous coverage of Capgemini, where a hold rating was recommended due to disappointing growth acceleration and weaker-than-expected demand [1] - The author emphasizes a fundamentals-based approach to value investing, focusing on companies with long-term durability and robust balance sheets rather than just low multiples [1] - The author acknowledges the risks of investing in successful companies, highlighting the importance of valuation while noting that in some cases, the development runway can diminish the immediate significance of price [1]

Group 1 - Capgemini announced the departure of William Rozé, CEO of Capgemini Engineering, effective July 31, 2025, to pursue other projects [1] - Aiman Ezzat, CEO of Capgemini, expressed gratitude for Rozé's contributions, particularly in building Capgemini Engineering into a market leader and integrating Altran [2] - William Rozé joined Capgemini in 2020 through the acquisition of Altran and became CEO of Capgemini Engineering in 2021 [2] Group 2 - Capgemini is a global business and technology transformation partner with 350,000 team members in over 50 countries [3] - The company reported global revenues of €22.1 billion for the year 2024 [3]

Media relations: Victoire Grux Tel.: +33 6 04 52 16 55 victoire.grux@capgemini.com Investor relations: Vincent Biraud Tel.: +33 1 47 54 50 87 vincent.biraud@capgemini.com H1 2025 results Paris, July 30, 2025 – The Board of Directors of Capgemini SE, chaired by Paul Hermelin, convened yesterday in Paris to review and adopt the accounts of Capgemini Group for the first half of 2025. Aiman Ezzat, Chief Executive Officer of the Capgemini Group, said: "The Group's performance continued to improve in Q2. Momentum ...

Quantum Computing Threat - Capgemini's report highlights that quantum computing could potentially compromise public-key cryptographic systems within the next 10 years [1] Security Implications - The report suggests that this poses a threat to various sectors, including online banking and blockchain security [1]