CGI's Q3 2025 Earnings Call: Conflicting Views on M&A, Managed Services, and AI's Role

Generated by AI AgentAinvest Earnings Call Digest
Wednesday, Jul 30, 2025 10:25 pm ET1min read
GIB--
Aime RobotAime Summary

- CGI Inc. reported $4.1B Q3 revenue, up 11.4% YoY, driven by acquisitions and financial services growth.

- UK/Australia segments grew 37% (BJSS acquisition) while US segments rose 9% (Aeyon/Daugherty merger).

- $4B bookings (101% book-to-bill ratio) and $30.6B global backlog (2x revenue) highlight strong demand.

- Adjusted EBIT margin dipped to 16.3% amid $84M merger costs, though net earnings rose 10% to $470M.



Revenue Growth and Acquisitions:
- CGI Inc.GIB-- reported revenue of $4.1 billion for Q3 2025, up 11.4% year-over-year or 7% when excluding the impact of foreign exchange.
- Growth was mainly driven by recent business acquisitions and continued momentum in the financial services sector.

Regional and Segment Performance:
- The U.K. and Australia segments saw a significant 37% growth, incorporating a full quarter's revenue from the BJSS acquisition.
- Combined growth in the U.S. segments was 9%, primarily driven by the Aeyon and Daugherty merger investments.

Bookings and Backlog:
- CGIGIB-- achieved bookings over $4 billion with a book-to-bill ratio of 101%, with U.S. commercial and state government contributing significantly with a ratio of 121%.
- The global backlog reached $30.6 billion, equivalent to 2x revenue.

Profitability and Margin Trends:
- Adjusted EBIT margin was 16.3%, down 10 basis points due to integration of recent mergers, with adjusted net earnings of $470 million, up 10% year-over-year.
- Profitability was impacted by restructuring and acquisition-related costs of $84 million in the quarter.

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