CGI Posts Impressive Financial Growth for Q1 of Fiscal 2025 with Strong Revenue and EPS Surge

CGI Reports Strong First Quarter for Fiscal 2025

On January 29, 2025, CGI Inc. shared impressive financial figures for the first quarter of its Fiscal 2025, showcasing a robust revenue increase along with significant improvements in net earnings and operating cash flow. The company's revenue reached $3.79 billion, marking a 5.1% increase compared to the previous year. Taking into account constant currency effects, the growth still held strong at 2.7%.

In terms of profitability, CGIs earnings before income taxes grew by 12.3%, reaching $591.7 million. This resulted in a margin of 15.6%, an improvement of 100 basis points from the same period last year. Notably, adjusted earnings before interest and taxes (EBIT) amounted to $611.7 million, which reflects a growth of 4.7%, maintaining a stable margin of 16.2%.

The net earnings for the quarter were $438.6 million, a 12.5% increase year-over-year, achieving a margin of 11.6%. The diluted earnings per share (EPS) also saw a remarkable jump of 15.0%, arriving at $1.92, up from $1.67 the previous year. Adjusted diluted EPS was slightly higher at $1.97, marking a 7.7% rise.

CGI reported cash generated from operating activities at $646.4 million, which represents 17.1% of the total revenue. This reflects the company’s ability to not only sustain but also enhance its cash flow dynamics, particularly amid evolving market conditions and business strategies that prioritize efficiency and profitability.

Quarterly bookings were solid at $4.16 billion, which corresponds to a book-to-bill ratio of 109.8%. Furthermore, CGI’s backlog reached $29.76 billion, equating to twice its annual revenue, indicating strong future revenue visibility and pipeline strength.

Strategic Developments

François Boulanger, President and CEO of CGI, noted that the first quarter's performance stemmed from the disciplined execution of the company’s strategic plans despite fluctuations in various client industries. Boulanger emphasized CGI’s role as a trusted advisor, particularly in aiding clients' paths to digitization—an area that continues to yield significant bookings, accounting for 110% of their revenue.

Investments are also trending upward, with CGI allocating $83.2 million back into its operations, and an overall $143.2 million utilized under their Normal Course Issuer Bid to repurchase and cancel its Class A subordinate voting shares. This move illustrates CGI's commitment to returning value to its shareholders while reinforcing its capital strategy.

Moreover, CGI has announced its plan to further increase its infrastructure in Europe, particularly focusing on realigning its cost structure to better fit market opportunities. While this transition may incur costs in the short term, it aims to position CGI favorably for long-term success in a competitive landscape.

Cash Management and Future Outlook

By the end of December 2024, CGI's total long-term debt was recorded at $3.40 billion, a slight increase from $3.00 billion due to strategic borrowings and repayments. Despite this increase, the company successfully reduced its net debt, which stood at $1.57 billion, showing effective management of its debt portfolio.

With sustained revenue streams and proactive management, CGI demonstrates a healthy ratio of 13.7% for net debt-to-capitalization, significantly lower than the previous year, providing flexibility to capitalize on future growth initiatives.

Boulanger concluded that the stellar results from the first quarter of Fiscal 2025 provide a strong foundation as they pursue additional investments and strategic acquisitions designed to drive profitability and expand their global footprint.

CGI will continue to pave its way forward, maintaining a vigilant focus on delivering shareholder value and leveraging its extensive portfolio to satisfy growing market demands. In what appears to be a promising trajectory, CGI's leadership is positioned to navigate the complexities of the modern digital landscape efficiently, making it a key player in the ever-evolving IT and business consulting sectors.