Financial Data and Key Metrics Changes - In Q1 fiscal 2026, the company reported revenue of CAD 4.1 billion, an increase of 7.7% year-over-year, or 3.4% when excluding foreign exchange impacts [5] - Adjusted EBIT was CAD 655 million, up 7.1% year-over-year, with a margin of 16.1%, down 10 basis points [9] - Adjusted net earnings were CAD 461 million, with a margin of 11.3%, and diluted EPS was CAD 2.12, an increase of 8% compared to Q1 last year [10] - Cash generated from operations was CAD 872 million, representing 21.4% of total revenue, with DSO improving to 37 days [10][11] Business Line Data and Key Metrics Changes - The APAC delivery center reported growth of 5.8%, driven by managed services [5] - The UK and Australia segment grew by 31% due to the acquisition of BJSS, enhancing the company's service offerings [5] - Western and Southern Europe segment saw a growth of 9%, led by the acquisition of Apside [7] - Managed services had a book-to-bill ratio of 117%, indicating strong demand [8] Market Data and Key Metrics Changes - Bookings in the quarter reached CAD 4.5 billion, with a book-to-bill ratio of 110% [7] - The U.S. federal segment was impacted by a government shutdown, but bookings excluding this segment showed a combined book-to-bill of 118% [8] - The government sector pipeline of opportunities increased by 30% compared to the previous year, indicating strong demand for modernization and cybersecurity [16] Company Strategy and Development Direction - The company is focused on a build and buy strategy, emphasizing investments in AI and strategic acquisitions [12][21] - The capital allocation priorities include investing back into the business, pursuing accretive acquisitions, and share buybacks [12][22] - The company aims to leverage its local presence and global scale to enhance client relationships and service delivery [12][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term potential of the U.S. federal market despite short-term challenges [34] - The company anticipates gradual improvement in various industries and geographies, driven by strong client demand for AI and digital transformation [28] - The management highlighted the importance of trust and industry knowledge in navigating the current geopolitical and economic landscape [27] Other Important Information - The company approved a quarterly cash dividend of CAD 0.17 per share, payable on March 20, 2026 [11] - The board of directors renewed the NCIB program until February 2027, allowing for the repurchase of up to 19 million shares [11] Q&A Session Summary Question: Impact of AI volatility on acquisitions - Management stated that AI remains an enabler for future growth and does not change their M&A strategy [32][33] Question: U.S. federal government business outlook - Management believes the federal government remains a strong client despite recent shutdowns, with long-term opportunities still present [34] Question: Margins in U.S. federal segment - Margins were impacted by the shutdown, but management expects improvement as operations normalize [39][40] Question: Vendor consolidation trends - Management noted an increase in vendor consolidation among clients, providing opportunities for the company to win new business [44][46] Question: Enterprise AI adoption cycle - Management indicated that while many companies have deployed AI tools, realizing outcomes requires addressing data quality and infrastructure challenges [48][55] Question: Internal use of AI and margin improvements - Management confirmed that AI is already generating savings, with expectations for margin improvements in the future [58][60]