CGI reports second quarter Fiscal 2024 results
CGI reported strong financial results in the second quarter of Fiscal 2024, with revenue reaching $3.74 billion, up 0.7% year-over-year. Earnings before income taxes grew by 2.3% to $577.4 million, and adjusted EBIT increased by 4.6% to $628.5 million. Net earnings rose to $426.9 million, with diluted EPS reaching $1.83, a 4.0% increase. The company's cash from operating activities stood at $502.0 million, representing 13.4% of revenue. Bookings totaled $3.75 billion, with a book-to-bill ratio of 100.4%. CGI's backlog reached $26.82 billion, with a strong performance across various financial metrics.
Revenue increased by 0.7% year-over-year, reaching $3.74 billion.
Earnings before income taxes grew by 2.3% to $577.4 million.
Adjusted EBIT increased by 4.6% to $628.5 million.
Net earnings rose to $426.9 million, reflecting a 1.8% year-over-year growth.
Diluted EPS reached $1.83, up by 4.0% compared to the same period last year.
Bookings amounted to $3.75 billion, resulting in a book-to-bill ratio of 100.4%.
The backlog stood at $26.82 billion, demonstrating strong performance and future revenue potential.
While revenue increased slightly, the growth rate was modest at 0.7% year-over-year.
Net earnings margin excluding specific items was 12.3%, showcasing a potential area for improvement.
The increase in specific items in Q2-F2024 compared to the previous year may impact profitability in the future.
Insights
CGI has reported a modest revenue growth of
Notably, a stable book-to-bill ratio exceeding
The increase in backlog to
The company's mention of 'cost optimization' efforts, accounting for
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Continuing to deliver shareholder value with strong net earnings and cash generation
Q2-F2024 performance highlights
- Revenue of
, up$3.74 billion 0.7% year-over-year and stable year-over-year in constant currency1; - Earnings before income taxes of
, up$577.4 million 2.3% year-over-year, for a margin1 of15.4% ; - Adjusted EBIT1 of
, up$628.5 million 4.6% year-over-year, for a margin1 of16.8% ; - Net earnings of
, up$426.9 million 1.8% year-over-year, for a margin1 of11.4% ; - Net earnings excluding specific items1,2 of
, up$459.4 million 5.6% year-over-year, for a margin1 of12.3% ; - Diluted EPS of
, up$1.83 4.0% year-over-year; - Diluted EPS excluding specific items1,2 of
, up$1.97 8.2% year-over-year; - Cash from operating activities of
, representing$502.0 million 13.4% of revenue1; - Bookings1 of
, for a book-to-bill ratio1 of$3.75 billion 100.4% or112.8% on a trailing twelve month basis; and - Backlog1 of
or 1.9x annual revenue.$26.82 billion
Note: All figures in Canadian dollars. Q2-F2024 MD&A, interim condensed consolidated financial statements and accompanying notes can be found at cgi.com/investors and have been filed with the Canadian Securities Administrators on SEDAR+ at www.sedarplus.ca and the
Q2-F2024 results
"In the quarter, our team continued to deliver shareholder value with strong net earnings and cash generation, even as some client industries continued to face uncertain economic conditions," said George D. Schindler, President and Chief Executive Officer. "Through CGI's portfolio of end-to-end service offerings, which are designed to deliver tangible and trusted business outcomes, we continue to partner with clients to bring value now and to position CGI for future profitable growth opportunities."
For the second quarter of Fiscal 2024, the Company reported revenue of
____________________________ |
1 Constant currency revenue growth, adjusted EBIT, adjusted EBIT margin, net earnings excluding specific items, net earnings margin excluding specific items and diluted EPS excluding specific items are non-GAAP financial measures or ratios. Earnings before income taxes margin, net earnings margin, cash from operating activities as a percentage of revenue, bookings, book-to-bill ratio, and backlog are key performance measures. See "Non-GAAP and other key performance measures" section of this press release for more information, including quantitative reconciliations to the closest International Financial Reporting Standards (IFRS) measure, as applicable. These are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other companies. |
2 Specific items in Q2-F2024 include: |
Earnings before income taxes were
Net earnings were
Net earnings excluding specific items1 were
Cash provided by operating activities was
Bookings were
As of March 31, 2024, the number of CGI consultants and professionals worldwide stood at approximately 90,000.
During the second quarter of Fiscal 2024, the Company invested
Return on invested capital was
As at March 31, 2024, long-term debt and lease liabilities, including both their current and long-term portions, were
At the end of March 2024, with cash and cash equivalents of
___________________________ |
1 Specific items in Q2-F2024 include: |
Financial highlights | Q2-F2024 | Q2-F2023 | Change |
In millions of Canadian dollars except earnings per share and where noted | |||
Revenue | 3,740.8 | 3,715.3 | 25.5 |
Year-over-year revenue growth | 0.7 % | 13.7 % | (1,300 bps) |
Constant currency revenue growth | 0.0 % | 11.4 % | (1,140 bps) |
Earnings before income taxes | 577.4 | 564.5 | 12.9 |
Margin % | 15.4 % | 15.2 % | 20 bps |
Adjusted EBIT | 628.5 | 600.8 | 27.7 |
Margin % | 16.8 % | 16.2 % | 60 bps |
Net earnings | 426.9 | 419.4 | 7.5 |
Margin % | 11.4 % | 11.3 % | 10 bps |
Net earnings excluding specific items1 | 459.4 | 435.0 | 24.4 |
Margin % | 12.3 % | 11.7 % | 60 bps |
Diluted EPS | 1.83 | 1.76 | 0.07 |
Diluted EPS excluding specific items1 | 1.97 | 1.82 | 0.15 |
Weighted average number of outstanding shares (diluted) In millions of shares | 233.3 | 238.5 | (5.2) |
Net finance costs | 7.5 | 15.4 | (7.9) |
Long-term debt and lease liabilities2 | 3,028.9 | 3,852.7 | (823.8) |
Net debt3 | 1,730.5 | 2,529.0 | (798.5) |
Net debt to capitalization ratio3 | 16.4 % | 24.0 % | (760 bps) |
Cash provided by operating activities | 502.0 | 469.1 | 32.9 |
As a percentage of revenue | 13.4 % | 12.6 % | 80 bps |
Days sales outstanding (DSO)3 | 40 | 41 | (1) |
Purchase for cancellation of Class A subordinate voting shares | (260.0) | (400.0) | 140.0 |
Return on invested capital (ROIC)3 | 15.9 % | 15.6 % | 30 bps |
Bookings | 3,754 | 3,839 | (85) |
Backlog | 26,823 | 25,241 | 1,582 |
To access the financial statements – click here
To access the MD&A – click here
________________________________ |
1 Specific items in Q2-F2024 include: |
2 Long-term debt and lease liabilities include both the current and long-term portions of the long-term debt and lease liabilities. |
3 Net debt, net debt to capitalization ratio and ROIC are non-GAAP financial measures or ratios. DSO is a key performance measure. See "Non-GAAP and other key performance measures" section of this press release for more information, including quantitative reconciliations to the closest International Financial Reporting Standards (IFRS) measure, as applicable. These are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other companies. |
Retirement of Michael E. Roach from CGI's Board of Directors
After nearly 18 years serving on CGI's Board of Directors, Michael E. Roach has retired effective March 31, 2024. Since joining CGI in 1998, Michael served in several executive positions culminating in his decade-long tenure as CGI's President and Chief Executive Officer. "On behalf of the Board of Directors and all our professionals, I would like to thank Mike for his valuable leadership, commitment and remarkable contribution to the success of our company." said Serge Godin, Founder and Executive Chairman of the Board.
Q2-F2024 results conference call
Management will host a conference call this morning at 9:00 a.m. (EDT) to discuss results. Participants may access the call by dialing +1-800-717-1738 Conference ID: 43710 or via cgi.com/investors. For those unable to participate on the live call, a podcast and copy of the slides will be archived for download at cgi.com/investors. Interested parties may also access a replay of the call by dialing +1-888-660-6264 Passcode: 43710, until June 1, 2024.
About CGI
Founded in 1976, CGI is among the largest independent IT and business consulting services firms in the world. With 90,000 consultants and professionals across the globe, CGI delivers an end-to-end portfolio of capabilities, from strategic IT and business consulting to systems integration, managed IT and business process services and intellectual property solutions. CGI works with clients through a local relationship model complemented by a global delivery network that helps clients digitally transform their organizations and accelerate results. CGI Fiscal 2023 reported revenue is
Forward-looking information and statements
This press release contains "forward-looking information" within the meaning of Canadian securities laws and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable
Further information on the risks that could cause our actual results to differ significantly from our current expectations may be found in the section titled Risk Environment of CGI's annual and quarterly MD&A, which is incorporated by reference in this cautionary statement. We also caution readers that the above-mentioned risks and the risks disclosed in CGI's annual and quarterly MD&A and other documents and filings are not the only ones that could affect us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial could also have a material adverse effect on our financial position, financial performance, cash flows, business or reputation.
Non-GAAP and other key performance measures
Non-GAAP financial measures and ratios used in this press release: Constant currency revenue growth, adjusted EBIT, adjusted EBIT margin, net earnings excluding specific items, net earnings margin excluding specific items, diluted EPS excluding specific items, net debt, net debt to capitalization ratio, and return on invested capital (ROIC). CGI reports its financial results in accordance with IFRS. However, management believes that these non-GAAP measures provide useful information to investors regarding the company's financial condition and results of operations as they provide additional measures of its performance. These measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers and should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with IFRS. Key performance measures used in this press release: cash from operating activities as a percentage of revenue, bookings, book-to-bill ratio, backlog, days sales outstanding (DSO), earnings before income taxes margin, and net earnings margin.
Below are reconciliations to the most comparable IFRS financial measures and ratios, as applicable.
The descriptions of these non-GAAP measures and ratios and other key performance measures can be found on pages 3, 4 and 5 of our Q2-F2024 MD&A which is posted on CGI's website, and filed with the Canadian Securities Administrators on SEDAR+ at www.sedarplus.ca and the
Reconciliation between constant currency revenue growth and growth
For the three months ended March 31, | For the six months ended March 31, | |||||
2024 | 2023 | % | 2024 | 2023 | % | |
In thousands of CAD except for percentages | ||||||
Total CGI revenue | 3,740,814 | 3,715,324 | 0.7 % | 7,343,784 | 7,165,596 | 2.5 % |
Constant currency revenue growth | 0.0 % | 0.7 % | ||||
Foreign currency impact | 0.7 % | 1.8 % | ||||
Variation over previous period | 0.7 % | 2.5 % |
Reconciliation between earnings before income taxes and adjusted EBIT
For the three months ended March 31, | For the six months ended March 31, | |||||||
2024 | % of | 2023 | % of | 2024 | % of | 2023 | % of | |
In thousands of CAD except for percentage | ||||||||
Earnings before income taxes | 577,437 | 15.4 % | 564,457 | 15.2 % | 1,104,572 | 15.0 % | 1,081,005 | 15.1 % |
Plus the following items: | ||||||||
Acquisition-related and integration costs | 145 | — % | 20,945 | 0.6 % | 2,323 | — % | 40,369 | 0.6 % |
Cost optimization program | 43,401 | 1.2 % | — | — % | 91,063 | 1.2 % | — | — % |
Net finance costs | 7,472 | 0.2 % | 15,366 | 0.4 % | 14,730 | 0.2 % | 33,507 | 0.5 % |
Adjusted EBIT | 628,455 | 16.8 % | 600,768 | 16.2 % | 1,212,688 | 16.5 % | 1,154,881 | 16.1 % |
Net earnings and Diluted EPS, excluding specific items
For the three months ended March 31, | For the six months ended March 31, | |||||
2024 | 2023 | Change | 2024 | 2023 | Change | |
In thousands of CAD except for percentages and shares data | ||||||
Earnings before income taxes | 577,437 | 564,457 | 2.3 % | 1,104,572 | 1,081,005 | 2.2 % |
Add back: | ||||||
Acquisition-related and integration costs | 145 | 20,945 | (99.3 %) | 2,323 | 40,369 | (94.2 %) |
Cost optimization program | 43,401 | — | — % | 91,063 | — | — % |
Earnings before income taxes excluding specific items | 620,983 | 585,402 | 6.1 % | 1,197,958 | 1,121,374 | 6.8 % |
Income tax expense | 150,565 | 145,042 | 3.8 % | 287,904 | 279,211 | 3.1 % |
Effective tax rate | 26.1 % | 25.7 % | 26.1 % | 25.8 % | ||
Add back: | ||||||
Tax deduction on acquisition-related and integration costs | 31 | 5,406 | (99.4 %) | 464 | 8,982 | (94.8 %) |
Impact on effective tax rate | — % | — % | — % | (0.1 %) | ||
Tax deduction on cost optimization program | 10,986 | — | — % | 22,956 | — | — % |
Impact on effective tax rate | (0.1 %) | — % | (0.1 %) | — % | ||
Income tax expense excluding specific items | 161,582 | 150,448 | 7.4 % | 311,324 | 288,193 | 8.0 % |
Effective tax rate excluding specific items | 26.0 % | 25.7 % | 26.0 % | 25.7 % | ||
Net earnings excluding specific items | 459,401 | 434,954 | 5.6 % | 886,634 | 833,181 | 6.4 % |
Net earnings margin excluding specific items | 12.3 % | 11.7 % | 12.1 % | 11.6 % | ||
Weighted average number of shares outstanding | ||||||
Class A subordinate voting shares and Class B shares (multiple voting) (basic) | 229,602,790 | 235,042,445 | (2.3 %) | 229,952,633 | 235,590,459 | (2.4 %) |
Class A subordinate voting shares and Class B shares (multiple voting) (diluted) | 233,264,256 | 238,504,523 | (2.2 %) | 233,612,683 | 238,998,951 | (2.3 %) |
Earnings per share excluding specific items (in dollars) | ||||||
Basic | 2.00 | 1.85 | 8.1 % | 3.86 | 3.54 | 9.0 % |
Diluted | 1.97 | 1.82 | 8.2 % | 3.80 | 3.49 | 8.9 % |
Reconciliation between long-term debt and lease liabilities and net debt
As at March 31, | 2024 | 2023 |
In thousands of CAD except for percentages | ||
Reconciliation between long-term debt and lease liabilities1 and net debt: | ||
Long-term debt and lease liabilities1 | 3,028,869 | 3,852,717 |
Minus the following items: | ||
Cash and cash equivalents | 1,266,854 | 1,280,800 |
Short-term investments | 6,143 | 4,737 |
Long-term investments | 19,390 | 18,114 |
Fair value of foreign currency derivative financial instruments related to debt | 5,946 | 20,110 |
Net debt | 1,730,536 | 2,528,956 |
Net debt to capitalization ratio | 16.4 % | 24.0 % |
Return on invested capital | 15.9 % | 15.6 % |
Days sales outstanding | 40 | 41 |
1 | As at March 31, 2024, long-term debt and lease liabilities were |
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SOURCE CGI Inc.
FAQ
<p>What was CGI's revenue in the second quarter of Fiscal 2024?</p>
CGI reported revenue of $3.74 billion in the second quarter of Fiscal 2024, representing a year-over-year increase of 0.7%.
<p>How did CGI's net earnings perform in the second quarter of Fiscal 2024?</p>
CGI's net earnings reached $426.9 million in the second quarter of Fiscal 2024, up by 1.8% year-over-year.
<p>What was CGI's diluted EPS in the second quarter of Fiscal 2024?</p>
CGI's diluted EPS was $1.83 in the second quarter of Fiscal 2024, showing a 4.0% increase from the same period last year.
<p>What were CGI's bookings and backlog in the second quarter of Fiscal 2024?</p>
CGI's bookings amounted to $3.75 billion, with a book-to-bill ratio of 100.4%, and the backlog stood at $26.82 billion.