CGI (NYSE:GIB) Q1 2026 Earnings call January 28, 2026 09:00 AM ET Company ParticipantsFrançois Boulanger - CEOKevin Linder - SVP of Investor RelationsSteve Perron - EVP and CFOSuthan Sukumar - Managing DirectorThanos Moschopoulos - Managing DirectorConference Call ParticipantsJérôme Dubreuil - Senior Equity AnalystKevin Krishnaratne - Director and Equity Research AnalystRichard Tse - Managing Director and Technology AnalystRobert Young - Managing Director and Senior Technology AnalystStephanie Price - Execu ...

Market Sentiment - XRP faced significant selling pressure due to broader crypto market turbulence linked to US President Donald Trump's tariff threats on the EU, leading to increased bearish commentary from retail traders [1] - XRP experienced a price drop of 19%, falling from a local high of $2.4 on January 5 to $1.88 on January 21, which triggered negative sentiment similar to earlier in January [2] Trading Activity - Despite the negative sentiment, XRP is currently trading at $1.95, showing a 2% increase in the past 24 hours, with a daily trading volume rising by 22% to $4.3 billion, indicating increased interest from traders [3] Institutional Inflows - XRP saw a net inflow of $7.16 million in US-based spot XRP exchange-traded funds on January 21, bringing total net inflows to $1.39 billion, with only two days of outflows recorded [4] - In contrast, Bitcoin spot ETFs experienced a $708.71 million outflow, and Ethereum-related products saw a $286.95 million net outflow on the same day [5] Strategic Alliances - Ripple formed a strategic alliance with DXC Technology, allowing the integration of blockchain technology into existing banking systems, specifically embedding Ripple's technology into DXC's Hogan core banking platform, which supports over $5 trillion in deposits and 300 million accounts globally [6]

Group 1 - The article discusses Infosys Limited (INFY), a global IT services and consulting company based in India, indicating that this is the third analysis of the company [1] - The previous recommendation for the stock was a Hold, suggesting a cautious outlook on its performance [1] - The focus of the analysis is on producing objective, data-driven research, particularly on small- to mid-cap companies, while also providing insights on large-cap names for a broader market perspective [1]

Group 1 - BMO Capital adjusted its rating for Accenture to "Market Perform" and raised the price target from $270 to $300 [1][6] - Accenture reported strong financial results for Q1 fiscal 2026, with earnings per share of $3.94, exceeding estimates by 5.6% and marking a 9.8% year-over-year increase [2][6] - The company's total revenues reached $18.7 billion, beating consensus estimates by 1% and representing a 6% year-over-year growth, driven by an 8% increase in managed services revenues and a 12% rise in total bookings [3][6] Group 2 - Accenture's shares surged by 15% over the past three months, outperforming the industry, which declined by 2.8%, and the S&P 500 composite, which increased by 1.8% [4][6] - The company has been actively returning cash to shareholders through buybacks and dividends, reporting margin expansion and solid free cash flow, with a market capitalization of approximately $168.8 billion [5]

Core Insights - Accenture reported an earnings per share (EPS) of $3.94, exceeding estimates of $3.73 and improving from last year's EPS of $3.59, indicating strong financial health and effective business strategies [2][6] - The company's revenue for the quarter reached approximately $18.74 billion, surpassing the estimated $18.53 billion, driven by advancements in its AI business [3][6] Financial Metrics - Accenture's price-to-earnings (P/E) ratio is around 31.38, reflecting investor confidence in its earnings potential [4] - The price-to-sales ratio stands at 3.29, and the enterprise value to sales ratio is 3.22, indicating its market value relative to revenue and total value [4] - The company maintains a low debt-to-equity ratio of 0.19, suggesting limited reliance on debt, and a current ratio of 1.41, indicating a strong ability to cover short-term liabilities [5][6] - Accenture's earnings yield is 3.19%, highlighting its financial stability and solid return on investment for shareholders [5][6]

Core Insights - Cognizant Technology Solutions Corporation (CTSH) has a market capitalization of $39 billion and is a significant player in the global IT-services and consulting sector, offering a variety of services including IT consulting, digital transformation, cloud infrastructure, AI and automation, cybersecurity, business-process outsourcing, and enterprise systems integration [1]. Stock Performance - Cognizant's shares have experienced an 11.1% decline from their 52-week high of $90.82 and a 12.4% decrease over the past three months, underperforming the Nasdaq Composite, which rose by 8.7% during the same period [3]. - Year-to-date, CTSH stock is down 5%, significantly lagging behind the Nasdaq's nearly 22.1% increase, and has seen a marginal drop over the past 52 weeks compared to the Nasdaq's 19.7% return [4]. - Despite the recent price declines, the stock has been trading above its 50-day and 200-day moving averages since late October and late November, respectively [4]. Earnings and Forecast - Following the Q3 2025 earnings release on October 29, Cognizant's shares surged by 5.7% due to better-than-expected results, reporting an adjusted EPS of $1.39 and revenue of $5.42 billion [5]. - The company raised its full-year adjusted earnings forecast to a range of $5.22–$5.26 per share and increased the lower end of its annual revenue outlook to $21.05 billion, bolstering investor confidence [5]. - Investor enthusiasm is further supported by Cognizant's strong growth initiatives centered around AI and increasing enterprise investments in digital infrastructure [5].

Core Thesis - Accenture plc is viewed positively due to its strong financials, consistent dividend growth, and potential opportunities in AI, despite facing slower growth rates [1][3][5]. Company Overview - Accenture is a leading global IT services and consulting firm, providing integrated solutions across various sectors, which creates high switching costs for clients [2]. - The company serves a diverse client base, including government, finance, healthcare, and technology, establishing a reputation for reliability and scale [2]. Financial Performance - Accenture has a solid financial foundation, with a dividend yield of 2.8%, a payout ratio below 50%, and a five-year compound annual growth rate of over 13% [3]. - The company has raised dividends for 21 consecutive years, supported by robust free cash flow margins of 15% [3]. Growth and Valuation - Revenue growth has decelerated to approximately 4% annually over the past three years, leading to a decrease in the P/E ratio from 40x in 2021 to around 20x today [4]. - The forward P/E is currently at 17.6x, indicating a more reasonable valuation compared to peak levels seen in 2021 [3]. Future Outlook - AI presents both opportunities and risks for Accenture, potentially increasing demand for consulting services while challenging traditional business models [4]. - Investors who believe in Accenture's ability to leverage AI-driven demand may find the stock appealing due to its financial strength and quality [5]. Historical Context - The stock has depreciated approximately 29.81% since previous bullish coverage due to slower growth, but the thesis remains intact, emphasizing dividend reliability and AI opportunities [6].

Core Insights - Wipro Limited reported financial results for the quarter ended September 30, 2025, showing a slight revenue growth of 0.3% quarter-over-quarter in constant currency terms and a net income growth of 1.2% year-over-year [1][6][3] - The company achieved large deal bookings of $2.9 billion, reflecting a significant year-over-year growth of 90.5%, contributing to overall deal bookings of $4.7 billion [1][6] - The adjusted operating margin for Q2'26 was reported at 17.2%, an increase of 0.4% year-over-year, with operating cash flows at 103.8% of net income [1][6][3] Financial Performance - Gross revenue for the quarter was Rs 227.0 billion ($2,556.6 million), marking a 2.5% increase quarter-over-quarter and a 1.8% increase year-over-year [6] - IT services segment revenue was $2,604.3 million, showing a 0.7% increase quarter-over-quarter but a 2.1% decrease year-over-year [6] - Net income for the quarter was Rs 32.5 billion ($365.6 million), a decrease of 2.5% quarter-over-quarter but an increase of 1.2% year-over-year [6] Strategic Developments - Wipro secured multiple large and strategic deals across various industries, including a multi-year infrastructure modernization engagement with a leading European financial institution [5][10] - The company is focusing on AI-driven solutions, with engagements aimed at transforming healthcare platforms and enhancing customer engagement in the utilities sector [10][5] - Wipro's strategy emphasizes resilience and adaptation to global shifts, particularly in the context of AI advancements [4][10] Outlook - For the quarter ending December 31, 2025, Wipro expects IT Services revenue to be in the range of $2,591 million to $2,644 million, indicating a sequential guidance of (-)0.5% to (+)1.5% in constant currency terms [3][4] - The guidance does not include revenue from the recently announced acquisition of Harman Digital Transformation Solutions [3]

Core Insights - IBM and Accenture are key players in digital transformation and consulting, focusing on technology and business processes powered by AI and cloud architecture [1][2][3] IBM's Position - IBM's Consulting business is experiencing growth in technology consulting, supply chain, and business application transformations, leveraging AI technologies and a broad partner ecosystem [4][5] - The IBM Consulting Advantage platform provides industry-specific AI assistants, enhancing the delivery of solutions and accelerating time to value [4] - IBM's collaboration with SAP aims to integrate generative AI in the retail sector, improving productivity and business transformation [5] - Despite these strengths, IBM faces challenges with a 10.5% year-over-year decrease in consulting signings due to macroeconomic uncertainty and competition from firms like Accenture [6] - IBM is addressing these challenges through innovation and acquisitions, including the purchase of Hakkoda Inc. to enhance its data consultancy capabilities [7] Accenture's Position - Accenture benefits from increased spending on application modernization, cloud enablement, and cybersecurity, driving demand for its managed services [8] - The company emphasizes building a robust digital core through cloud, data, and AI, and collaborates with major tech firms to enhance its competitive edge [9][10] - Accenture has seen steady customer growth, particularly in the finance sector, and is actively acquiring companies to enter high-growth areas [10] - However, integration risks from acquisitions and competition from IBM and others may impact organic growth [11] Financial Estimates and Performance - The Zacks Consensus Estimate for IBM's 2025 sales and EPS indicates year-over-year growth of 5.5% and 6%, respectively, with positive trends in EPS estimates [12] - For Accenture, the 2025 sales and EPS estimates imply growth of 5.41% and 6.11%, but the EPS estimate for 2026 has been trending downward [12] - Over the past year, IBM's stock has increased by 50.5%, while Accenture's has only gained 3.1% [14] - IBM's shares trade at a forward P/E ratio of 23.02, slightly lower than Accenture's 23.95 [15] Investment Outlook - Both companies hold a Zacks Rank 3 (Hold), but IBM's technology portfolio and recent performance suggest it may be a more attractive investment option at this time [16][17]

Core Insights - Cognizant Technology Solutions experienced a positive stock market performance, with shares rising over 2% following a favorable quarterly earnings report [1] - The company's revenue for the first quarter reached approximately $5.12 billion, reflecting a 7.5% increase compared to the same period in 2024 [2] - GAAP net income rose to $663 million from $546 million year-over-year, while non-GAAP earnings per share increased by 10% to $1.23 [2][3] Financial Performance - The revenue growth was supported by a 3% improvement in trailing-12-month bookings, totaling $26.7 billion [2] - Analysts had anticipated lower figures, with expectations of $5.06 billion in revenue and $1.20 per share for adjusted profitability [3] - Cognizant provided guidance for the second quarter and full-year 2025, projecting revenue between $20.5 billion and $21 billion, indicating growth of nearly 4% [4] Strategic Focus - The company highlighted the impact of artificial intelligence (AI) technology on its operations, emphasizing productivity, cost reduction, and resiliency as key areas of focus [4] - The consensus among analysts aligns with Cognizant's guidance, estimating revenue at nearly $20.6 billion and adjusted net income at $4.99 per share [5] - While the quarter was deemed decent, there is a desire for higher growth in bookings to enhance investor confidence [5]