Capgemini Reports 0.4% Organic Revenue Decline in Q1, Confirms 2025 Targets

Capgemini reports a 0.4% organic decline in Q1 sales, beating expectations. The company's North America and UK & Ireland regions performed well, and the group confirmed its 2025 targets, citing a cautious approach due to the challenging macroeconomic and geopolitical environment. The group aims for a 2025 sales growth of -2% to +2%, a 13.3%-13.5% operating margin, and a cash-flow generation of approximately 1.9 billion euros.

Capgemini (EPA:CAPP), a leading global IT services and consulting company, reported mixed results for the first quarter of 2025. The company reported €5.55 billion in first-quarter revenue, a 0.4% year-over-year decline at constant exchange rates. This slight contraction marks a 0.7 point improvement over the previous quarter [1].

Revenue rose 0.5% on a reported basis, aided by currency fluctuations. The French IT company attributed the modest contraction to weakness in France and parts of Europe, while growth in North America and the U.K. helped offset these declines. North America, which made up 28% of group revenues in 2024, returned to growth with a 0.8% increase. The telecom, media, and technology segment, along with financial services, drove the recovery. The U.K. and Ireland region, accounting for 12% of last year’s revenues, posted a 3.9% rise, led by demand in the public sector and energy and utilities [1].

Asia-Pacific and Latin America were the best-performing regions, up 7.6% from a year earlier. Growth was fueled by public sector spending and strong demand in TMT, financial services, and manufacturing. By business line, Applications & Technology services, Capgemini’s largest segment at 62% of revenues, grew 1.9%. Strategy & Transformation services rose 1.2%. Operations & Engineering services declined 2.6% [1].

Capgemini ended the quarter with 342,700 employees, up 1.6% from a year ago. Offshore headcount rose 3.9% and now makes up 58% of total staff. Onshore headcount fell 1.4%. "We delivered a Q1 slightly better than our expectations in a macro and geopolitical environment that remains challenging," said Chief executive Aiman Ezzat [1].

Despite the mixed performance, Capgemini maintained its full-year targets. The company aims for revenue growth between -2% and +2% at constant exchange rates, an operating margin between 13.3% and 13.5%, and organic free cash flow of around €1.9 billion [1].

In a separate development, MTG, a leading mobile gaming company, reported a strong first quarter with 6% organic revenue growth and a healthy operating margin of 24%. The company's net sales increased by 77% year over year, driven by the transformative acquisition of Plarium and scaled-up marketing for key titles and new games [2].

References:
[1] https://www.investing.com/news/earnings/capgemini-q1-revenue-555-bln-up-05-reported-down-04-constantcurrency-4008785
[2] https://www.tradingview.com/news/reuters.com,2025-04-29:newsml_Wkr7c4kCs:0-mtg-kicks-off-2025-with-a-strong-q1-with-6-organic-revenue-growth-and-healthy-operating-margin-of-24/