CGI Group (NYSE:GIB) Posts Earnings Results, Hits Expectations

Key Points

• CGI reported Q2 EPS of $1.65, matching analyst expectations, while revenue of $2.99B slightly missed estimates; revenue was up 3.3% YoY but EPS declined from $2.12 a year earlier.
• The company flagged record demand and strong cash generation with Q2 bookings of CAD 4.3B, a contracted backlog of CAD 31.5B (≈CAD 12B to be recognized next 12 months), trailing‑12‑month cash of CAD 2.5B, and CAD 397M returned via buybacks plus a CAD 0.17 quarterly dividend.
• Management is pushing an “AI‑first” strategy and completed the Stratfield acquisition to expand AI/consulting capabilities (pipeline opportunities up >180%), but noted near‑term headwinds from regional decision delays, soft German manufacturing, CAD 41M of acquisition/integration costs and a higher effective tax rate (~26%–27%).

CGI Group (NYSE:GIB - Get Free Report) TSE: GIB.A posted its earnings results on Wednesday. The technology company reported $1.65 earnings per share for the quarter, hitting analysts' consensus estimates of $1.65, Zacks reports. CGI Group had a net margin of 10.26% and a return on equity of 18.72%. The company had revenue of $2.99 billion for the quarter, compared to analyst estimates of $3.05 billion. During the same quarter in the prior year, the business posted $2.12 EPS. The firm's revenue was up 3.3% compared to the same quarter last year.

Here are the key takeaways from CGI Group's conference call:

• Record bookings and backlog — Q2 bookings were CAD 4.3B (book‑to‑bill 104%), trailing‑12‑month bookings reached a record CAD 18B, and contracted backlog is CAD 31.5B with ~CAD 12B expected to be recognized in the next 12 months.
• Strong profitability and cash generation — adjusted EBIT was CAD 692M (16.6% margin), adjusted EPS rose to CAD 2.27 (+7.1% YoY), Q2 cash from operations was CAD 451M and trailing‑12‑month cash is CAD 2.5B; the company returned CAD 397M via buybacks and declared a CAD 0.17 quarterly dividend.
• AI strategy and M&A accelerating demand — management emphasized an "AI‑first" approach (DigiOps, IP integrations), expanded partnerships with AWS/OpenAI/Google and others, and completed the Stratfield acquisition to strengthen AI/consulting capabilities while pipeline opportunities are up >180%.
• Near‑term regional headwinds and costs — decision‑making delays affected U.S. Federal and parts of Europe (Nordics/Finland) and manufacturing demand in Germany is softening; acquisition/integration costs of CAD 41M and a new French corporate surcharge raised the expected effective tax rate to ~26%–27%.

CGI Group Stock Performance

Shares of CGI Group stock traded up $1.09 on Friday, reaching $66.53. 604,383 shares of the company traded hands, compared to its average volume of 488,541. CGI Group has a 52 week low of $61.90 and a 52 week high of $110.07. The company has a 50 day moving average of $72.88 and a 200 day moving average of $82.66. The firm has a market capitalization of $14.29 billion, a PE ratio of 12.01 and a beta of 0.58. The company has a debt-to-equity ratio of 0.28, a current ratio of 0.94 and a quick ratio of 0.70.

CGI Group Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Friday, June 19th. Stockholders of record on Friday, May 15th will be given a dividend of $0.17 per share. This represents a $0.68 dividend on an annualized basis and a dividend yield of 1.0%. The ex-dividend date of this dividend is Friday, May 15th. CGI Group's dividend payout ratio is currently 8.66%.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently modified their holdings of GIB. Strive Financial Group LLC purchased a new stake in shares of CGI Group during the 4th quarter valued at approximately $37,000. EverSource Wealth Advisors LLC lifted its stake in shares of CGI Group by 53.3% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 1,452 shares of the technology company's stock valued at $152,000 after buying an additional 505 shares in the last quarter. Entropy Technologies LP purchased a new stake in shares of CGI Group during the 3rd quarter valued at approximately $236,000. AQR Capital Management LLC purchased a new stake in shares of CGI Group during the 1st quarter valued at approximately $347,000. Finally, Danske Bank A S purchased a new stake in shares of CGI Group during the 3rd quarter valued at approximately $768,000. 66.68% of the stock is owned by institutional investors.

Analyst Upgrades and Downgrades

A number of brokerages have issued reports on GIB. Scotiabank began coverage on shares of CGI Group in a research report on Tuesday, January 27th. They issued a "sector perform" rating for the company. Royal Bank Of Canada downgraded shares of CGI Group from an "outperform" rating to a "sector perform" rating and reduced their price objective for the stock from $150.00 to $100.00 in a research report on Thursday. TD Securities raised shares of CGI Group to a "strong-buy" rating in a research report on Wednesday, January 28th. UBS Group reduced their price objective on shares of CGI Group from $79.00 to $70.00 and set a "neutral" rating for the company in a research report on Thursday. Finally, Weiss Ratings downgraded shares of CGI Group from a "hold (c-)" rating to a "sell (d+)" rating in a research report on Friday, March 27th. One equities research analyst has rated the stock with a Strong Buy rating, five have assigned a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, CGI Group presently has an average rating of "Hold" and an average target price of $83.67.

CGI Group Company Profile

CGI Group Inc is a global information technology and business consulting firm that delivers a broad range of services including IT consulting, systems integration, application development and maintenance, infrastructure and network services, managed IT and business process outsourcing. The company works with clients to design, build and operate IT systems and business solutions, with capabilities spanning cloud and hybrid IT environments, cybersecurity, data analytics and artificial intelligence, digital transformation and enterprise resource planning implementations.

Founded in 1976 in Quebec by Serge Godin and André Imbeau, CGI has grown from a regional systems integrator into a multinational professional services organization.

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