Capgemini's 2024 Sales Slightly Above Estimates, Driven by AI and Higher Value Services

Capgemini, a global leader in consulting, technology services, and digital transformation, reported its 2024 sales results, which were slightly above estimates. The company's revenues for the year reached €22,096 million, down -1.9% year-on-year, but constant currency growth was -2.0%, at the top end of the outlook as revised in October 2024. Organic growth, excluding the impact of currency fluctuations and changes in Group scope, was -2.4%. Despite the challenging economic environment, Capgemini demonstrated resilience and maintained a stable operating margin of 13.3% of revenues.



Capgemini's strong performance in 2024 can be attributed to several strategic initiatives, particularly its investments in AI and generative AI. The company's leadership in AI and generative AI has driven strong bookings and accounted for around 5% of Group bookings in Q4. The acquisition of Syniti, a data-driven digital transformation company, has further strengthened Capgemini's capabilities in AI and data-driven transformation, enabling the Group to offer more comprehensive and innovative solutions to its clients.

Capgemini's portfolio mix has shifted towards higher value services, contributing to the company's gross margin and operating margin. The ongoing shift in the Group's offerings portfolio towards more value-creating services, combined with strengthened operational efficiency, generated a 50 basis points increase in gross margin to 27.4% of revenues in 2024. This enabled Capgemini to absorb the incremental investment in selling efforts aimed at driving future growth and offset the slight increase in G&A expenses. Consequently, the operating margin was stable at 13.3% of revenues, in line with the operating margin target set for 2024.

Capgemini's CEO, Aiman Ezzat, expressed confidence in the company's future prospects, stating that "Our clients keep showing a strong appetite for technology and recognize the value we bring as their trusted business and technology transformation partner. However, we remain cautious in this uncertain environment, notably around Manufacturing and Europe, and expect H1 2025 constant currency revenue growth to remain in the same range as in Q4 2024. We will continue to demonstrate in 2025 the strength of our positioning and the resilience of our operating model, with growth as a priority."

In conclusion, Capgemini's 2024 sales results were slightly above estimates, driven by the company's strategic initiatives in AI and generative AI, as well as its shift towards higher value services. Despite the challenging economic environment, Capgemini maintained a stable operating margin and demonstrated resilience, positioning the company for growth in the future.