CGI reports fourth quarter and Fiscal 2024 results

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GIB.A (TSX)
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Fourth quarter revenue up 4.4% and diluted earnings per share (EPS) up 8.5%

Q4-F2024 performance highlights

• Revenue of $3.66 billion, up 4.4% year-over-year or 2.0% year-over-year in constant currency¹;
• Earnings before income taxes of $592.4 million, up 6.2% year-over-year, for a margin¹ of 16.2%;
• Adjusted EBIT¹ of $600.2 million, up 4.7% year-over-year, for a margin¹ of 16.4%;
• Net earnings of $435.9 million, up 5.2% year-over-year, for a margin¹ of 11.9%;
• Net earnings excluding specific items^1,2 of $439.1 million, up 4.2% year-over-year, for a margin¹ of 12.0%;
• Diluted EPS of $1.91, up 8.5% year-over-year;
• Diluted EPS excluding specific items^1,2 of $1.92, up 7.3% year-over-year;
• Cash provided by operating activities of $629.1 million, representing 17.2% of revenue¹; and
• Bookings¹ of $3.82 billion, for a book-to-bill ratio¹ of 104.4%.

F2024 performance highlights

• Revenue of $14.68 billion, up 2.7% year-over-year or 0.9% year-over-year in constant currency¹;
• Earnings before income taxes of $2.29 billion, up 4.2% year-over-year, for a margin¹ of 15.6%;
• Adjusted EBIT¹ of $2.42 billion, up 4.5% year-over-year, for a margin¹ of 16.5%;
• Net earnings of $1.69 billion, up 3.8% year-over-year, for a margin¹ of 11.5%;
• Net earnings excluding specific items^1,3 of $1.77 billion, up 5.1% year-over-year, for a margin¹ of 12.0%;
• Diluted EPS of $7.31, up 6.6% year-over-year;
• Diluted EPS excluding specific items^1,3 of $7.62, up 7.8% year-over-year;
• Cash provided by operating activities of $2.20 billion, representing 15.0% of revenue¹;
• Bookings of $16.04 billion, for a book-to-bill ratio of 109.3%; and
• Backlog¹ of $28.72 billion or 1.9x annual revenue.

Note: All figures in Canadian dollars. F2024 MD&A, audited consolidated financial statements and accompanying notes can be found at cgi.com/investors and have been filed with the Canadian Securities Administrators on SEDAR+ at www.sedarplus.ca and the U.S. Securities and Exchange Commission on EDGAR at www.sec.gov.

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¹ Constant currency revenue growth, adjusted EBIT, adjusted EBIT margin, net earnings excluding specific items, net earnings margin excluding specific items and diluted EPS excluding specific items are non-GAAP financial measures or ratios. Earnings before income taxes margin, net earnings margin, cash provided by operating activities as a percentage of revenue, bookings, book-to-bill ratio, and backlog are key performance measures. See "Non-GAAP and other key performance measures" section of this press release for more information, including quantitative reconciliations to the closest International Financial Reporting Standards (IFRS Accounting Standards) measure, as applicable. These are not standardized financial measures under IFRS Accounting Standards and might not be comparable to similar financial measures disclosed by other companies.

² Specific items in Q4-F2024 include: $3.2 million in acquisition-related and integration costs, net of tax; Specific items in Q4-F2023 include:

$6.7 million from the cost optimization program, net of tax.

³ Specific items in F2024 include: $5.1 million in acquisition-related and integration costs and $68.1 million from the cost optimization program, both net of tax; Specific items in F2023 include: $42.1 million in acquisition-related and integration costs and $6.7 million from the cost optimization program, both net of tax.

MONTRÉAL, Nov. 6, 2024 /CNW/ - CGI (TSX: GIB.A) (NYSE: GIB)

Q4-F2024 results
"I am pleased with CGI's fourth quarter results as our team delivered increasing revenue growth, sustained earnings expansion, and strong cash from operations," said François Boulanger, President and Chief Executive Officer. "Looking ahead to fiscal year 2025, we continue to see opportunities for CGI to deliver on our full offering value proposition, which enables clients to achieve business outcomes. In addition, our financial strength deepens our position as an active consolidator."

For the fourth quarter of Fiscal 2024, the Company reported revenue of $3.66 billion, representing a year-over-year growth of 4.4%. When excluding foreign currency variations, revenue grew by 2.0% year-over-year.

Earnings before income taxes were $592.4 million, up 6.2% year-over-year, for a margin of 16.2%, up 30 basis points compared to the same period last year. Adjusted EBIT was $600.2 million, up 4.7% year-over-year, for a margin of 16.4%, up 10 basis points compared to the same period last year.

Net earnings were $435.9 million, up 5.2% compared with the same period last year, for a margin of 11.9%. Diluted earnings per share, as a result, were $1.91 compared to $1.76 last year, representing an increase of 8.5%.

Net earnings excluding specific items¹ were $439.1 million, for a margin of 12.0%, representing an increase of 4.2% year-over-year.  On the same basis, diluted earnings per share increased by 7.3% to $1.92, up from $1.79 for the same period last year.

Cash provided by operating activities was $629.1 million, representing 17.2% of revenue.

Bookings were $3.82 billion, representing a book-to-bill ratio of 104.4% or 109.3% on a trailing twelve-month basis.

As of September 30, 2024, the number of CGI consultants and professionals worldwide stood at approximately 90,250.

During the fourth quarter of Fiscal 2024, the Company acquired businesses for an investment of $330.2 million net of cash acquired, invested $81.6 million back into its business and $49.4 million under its current Normal Course Issuer Bid to pay for and cancel 338,500 of its Class A subordinate voting shares.

F2024 results

The Company reported revenue of $14.68 billion, representing a year-over-year growth of 2.7%. When excluding foreign currency variations, revenue grew by 0.9% year-over-year.

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¹ Specific items in F2024 include: $5.1 million in acquisition-related and integration costs and $68.1 million from the cost optimization program, both net of tax; Specific items in F2023 include: $42.1 million in acquisition-related and integration costs and $6.7 million from the cost optimization program, both net of tax.

Earnings before income taxes were $2.29 billion, up 4.2% year-over-year, for a margin of 15.6%, up 20 basis points compared to the same period last year. Adjusted EBIT was $2.42 billion, up 4.5% year-over-year, for a margin of 16.5%, up 30 basis points compared to the same period last year.

Net earnings were $1.69 billion, up 3.8% compared with the same period last year, for a margin of 11.5%. Diluted earnings per share, as a result, were $7.31 compared to $6.86 last year, representing an increase of 6.6%.

Net earnings excluding specific items² were $1.77 billion, for a margin of 12.0%, representing an increase of 5.1% year-over-year. On the same basis, diluted earnings per share increased by 7.8% to $7.62, up from $7.07 for the same period last year.

As of September 30, 2024, the Company's backlog reached $28.72 billion or 1.9x annual revenue.

Cash provided by operating activities was $2.20 billion, or 15.0% of revenue, representing an increase of 4.4% on a year-over-year basis.

During Fiscal 2024, the Company acquired businesses for an investment of $380.3 million, net of cash acquired. In addition, the Company invested $360.7 million back into its business and $934.8 million under its previous and current Normal Course Issuer Bid to pay for, cancel and settle 6,597,158 of its Class A subordinate voting shares.

Return on invested capital was 16.0%, remaining stable on a year-over-year basis.

As at September 30, 2024, long-term debt and lease liabilities, including both their current and long-term portions, were $3.31 billion, down from $3.74 billion at the same time last year, primarily due to the $670.4 million scheduled repayment of a term loan. As of the same date, net debt stood at $1.82 billion, down from $2.13 billion at the same time last year. The net debt-to-capitalization ratio was 16.2% at the end of September 2024, down 420 basis points when compared to the prior year.

At the end of September 2024, with cash and cash equivalents of $1.5 billion, and an undrawn revolving credit facility, the Company had $3.0 billion in readily available liquidity to pursue its Build and Buy profitable growth strategy.

_______________________________

² Specific items in F2024 include: $5.1 million in acquisition-related and integration costs and $68.1 million from the cost optimization program, both net of tax; Specific items in F2023 include: $42.1 million in acquisition-related and integration costs and $6.7 million from the cost optimization program, both net of tax.

Financial highlights	Q4-F2024	Q4-F2023	F2024	F2023
In millions of Canadian dollars except earnings per share and where noted
Revenue	3,660.4	3,507.3	14,676.2	14,296.4
Year-over-year revenue growth	4.4 %	8.0 %	2.7 %	11.1 %
Constant currency revenue growth	2.0 %	2.2 %	0.9 %	8.0 %
Earnings before income taxes	592.4	557.9	2,291.0	2,197.9
Margin %	16.2 %	15.9 %	15.6 %	15.4 %
Adjusted EBIT	600.2	573.0	2,415.8	2,312.7
Margin %	16.4 %	16.3 %	16.5 %	16.2 %
Net earnings	435.9	414.5	1,692.7	1,631.2
Margin %	11.9 %	11.8 %	11.5 %	11.4 %
Net earnings excluding specific items^1	439.1	421.2	1,765.9	1,680.0
Margin %	12.0 %	12.0 %	12.0 %	11.8 %
Diluted EPS	1.91	1.76	7.31	6.86
Diluted EPS excluding specific items^1	1.92	1.79	7.62	7.07
Weighted average number of outstanding shares (diluted) In millions of shares	228.8	235.7	231.7	237.7
Net finance costs	4.4	6.1	27.9	52.5
Long-term debt and lease liabilities^2	3,308.4	3,742.3	3,308.4	3,742.3
Net debt^3	1,819.8	2,134.6	1,819.8	2,134.6
Net debt to capitalization ratio^3	16.2 %	20.4 %	16.2 %	20.4 %
Cash provided by operating activities	629.1	628.7	2,205.0	2,112.2
As a percentage of revenue	17.2 %	17.9 %	15.0 %	14.8 %
Days sales outstanding (DSO)^3	41	44	41	44
Purchase for cancellation of Class A subordinate voting shares	49.4	324.7	934.8	788.0
Return on invested capital (ROIC)^3	16.0 %	16.0 %	16.0 %	16.0 %
Bookings	3,823	3,996	16,044	16,259
Backlog	28,724	26,059	28,724	26,059

To access the financial statements – click here
To access the MD&A – click here

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¹ Specific items in Q4-F2024 include: $3.2 million in acquisition-related and integration costs, net of tax; Specific items in Q4-F2023 include: $6.7 million from the cost optimization program, net of tax. Specific items in F2024 include: $5.1 million in acquisition-related and integration costs and $68.1 million from the cost optimization program, both net of tax; Specific items in F2023 include: $42.1 million in acquisition-related and integration costs and $6.7 million from the cost optimization program, both net of tax.

² Long-term debt and lease liabilities include both the current and long-term portions of the long-term debt and lease liabilities.

³ Net debt, net debt to capitalization ratio and ROIC are non-GAAP financial measures or ratios. DSO is a key performance measure. See "Non-GAAP and other key performance measures" section of this press release for more information, including quantitative reconciliations to the closest International Financial Reporting Standards (IFRS Accounting Standards) measure, as applicable. These are not standardized financial measures under IFRS Accounting Standards and might not be comparable to similar financial measures disclosed by other companies.

Declaration of Dividend

On November 5, 2024, the Company's Board of Directors approved a quarterly cash dividend for holders of Class A subordinate voting shares and Class B shares (multiple voting) of $0.15 per share. This dividend is payable on December 20, 2024 to shareholders of record as of the close of business on November 20, 2024. The dividend is designated as an "eligible dividend" for Canadian tax purposes.

Q4-F2024 results conference call

Management will host a conference call this morning at 9:00 a.m. (EST) to discuss results. Participants may access the call by dialing [phone] Conference ID: 25981 or via cgi.com/investors. For those unable to participate on the live call, a podcast and copy of the slides will be archived for download at cgi.com/investors. Interested parties may also access a replay of the call by dialing [phone]  Passcode: 25981, until December 6, 2024.

About CGI

Founded in 1976, CGI is among the largest independent IT and business consulting services firms in the world. With 90,250 consultants and professionals across the globe, CGI delivers an end-to-end portfolio of capabilities, from strategic IT and business consulting to systems integration, managed IT and business process services and intellectual property solutions. CGI works with clients through a local relationship model complemented by a global delivery network that helps clients digitally transform their organizations and accelerate results. CGI Fiscal 2024 reported revenue is $14.68 billion and CGI shares are listed on the TSX (GIB.A) and the NYSE (GIB). Learn more at cgi.com.

Forward-looking information and statements

This press release contains "forward-looking information" within the meaning of Canadian securities laws and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable United States safe harbours. All such forward-looking information and statements are made and disclosed in reliance upon the safe harbour provisions of applicable Canadian and United States securities laws. Forward-looking information and statements include all information and statements regarding CGI's intentions, plans, expectations, beliefs, objectives, future performance, and strategy, as well as any other information or statements that relate to future events or circumstances and which do not directly and exclusively relate to historical facts. Forward-looking information and statements often but not always use words such as "believe", "estimate", "expect", "intend", "anticipate", "foresee", "plan", "predict", "project", "aim", "seek", "strive", "potential", "continue", "target", "may", "might", "could", "should", and similar expressions and variations thereof. These information and statements are based on our perception of historic trends, current conditions and expected future developments, as well as other assumptions, both general and specific, that we believe are appropriate in the circumstances. Such information and statements are, however, by their very nature, subject to inherent risks and uncertainties, of which many are beyond the control of CGI, and which give rise to the possibility that actual results could differ materially from our expectations expressed in, or implied by, such forward-looking information or forward-looking statements. These risks and uncertainties include but are not restricted to: risks related to the market such as the level of business activity of our clients, which is affected by economic and political conditions, additional external risks (such as pandemics, armed conflict, climate-related issues and inflation) and our ability to negotiate new contracts; risks related to our industry such as competition and our ability to develop and expand our services to address emerging business demands and technology trends (such as artificial intelligence), to penetrate new markets, and to protect our intellectual property rights; risks related to our business such as risks associated with our growth strategy, including the integration of new operations, financial and operational risks inherent in worldwide operations, foreign exchange risks, income tax laws and other tax programs, the termination, modification, delay or suspension of our contractual agreements, our expectations regarding future revenue resulting from bookings and backlog, our ability to attract and retain qualified employees, to negotiate favourable contractual terms, to deliver our services and to collect receivables, to disclose, manage and implement environmental, social and governance (ESG) initiatives and standards, and to achieve ESG commitments and targets, including without limitation, our commitment to net-zero carbon emissions, as well as the reputational and financial risks attendant to cybersecurity breaches and other incidents, including through the use of artificial intelligence, and financial risks such as liquidity needs and requirements, maintenance of financial ratios, our ability to declare and pay dividends, interest rate fluctuations and changes in creditworthiness and credit ratings; as well as other risks identified or incorporated by reference in this press release, in CGI's annual MD&A and in other documents that we make public, including our filings with the Canadian Securities Administrators (on SEDAR+ at www.sedarplus.ca) and the U.S. Securities and Exchange Commission (on EDGAR at www.sec.gov). Unless otherwise stated, the forward-looking information and statements contained in this press release are made as of the date hereof and CGI disclaims any intention or obligation to publicly update or revise any forward-looking information or forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. While we believe that our assumptions on which these forward-looking information and forward-looking statements are based were reasonable as at the date of this press release, readers are cautioned not to place undue reliance on these forward-looking information or statements. Furthermore, readers are reminded that forward-looking information and statements are presented for the sole purpose of assisting investors and others in understanding our objectives, strategic priorities and business outlook as well as our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes.

Further information on the risks that could cause our actual results to differ significantly from our current expectations may be found in the section titled Risk Environment of CGI's annual MD&A, which is incorporated by reference in this cautionary statement. We also caution readers that the above-mentioned risks and the risks disclosed in CGI's annual MD&A and other documents and filings are not the only ones that could affect us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial could also have a material adverse effect on our financial position, financial performance, cash flows, business or reputation.

Non-GAAP and other key performance measures

Non-GAAP financial measures and ratios used in this press release: Constant currency revenue growth, adjusted EBIT, adjusted EBIT margin, net earnings excluding specific items, net earnings margin excluding specific items, diluted EPS excluding specific items, net debt, net debt to capitalization ratio, and return on invested capital (ROIC). CGI reports its financial results in accordance with IFRS Accounting Standards. However, management believes that these non-GAAP measures provide useful information to investors regarding the company's financial condition and results of operations as they provide additional measures of its performance. These measures do not have any standardized meaning prescribed by IFRS Accounting Standards and are therefore unlikely to be comparable to similar measures presented by other issuers and should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with IFRS Accounting Standards. Key performance measures used in this press release: cash from operating activities as a percentage of revenue, bookings, book-to-bill ratio, backlog, days sales outstanding (DSO), earnings before income taxes margin, and net earnings margin.

Below are reconciliations to the most comparable IFRS Accounting Standards financial measures and ratios, as applicable.

The descriptions of these non-GAAP measures and ratios and other key performance measures can be found on pages 3, 4 and 5 of our F2024 MD&A which is posted on CGI's website, and filed with the Canadian Securities Administrators on SEDAR+ at www.sedarplus.ca and the U.S. Securities and Exchange Commission on EDGAR at www.sec.gov.

Q4-F2024

Reconciliation between constant currency revenue growth and growth

	For the three months ended September 30,
	2024	2023	%
In thousands of CAD except for percentages
Total CGI revenue	3,660,391	3,507,336	4.4 %
Constant currency revenue growth	2.0 %
Foreign currency impact	2.4 %
Variation over previous period	4.4 %

Reconciliation between earnings before income taxes and adjusted EBIT

	For the three months ended September 30,
	2024	% of revenue	2023		% of revenue
In thousands of CAD except for percentage and shares data
Earnings before income taxes	592,412	16.2 %	557,927		15.9 %
Plus the following items:
Acquisition-related and integration costs	3,443	0.1 %	—		— %
Cost Optimization Program	—	— %	8,964		0.3 %
Net finance costs	4,394	0.1 %	6,148		0.2 %
Adjusted EBIT	600,249	16.4 %	573,039		16.3 %

Net earnings and Diluted EPS, excluding specific items

	For the three months ended September 30,
	2024	2023	Change
In thousands of CAD except for percentage and shares data
Earnings before income taxes	592,412	557,927	6.2 %
Add back:
Acquisition-related and integration costs	3,443	—	— %
Cost Optimization Program	—	8,964	(100.0 %)
Earnings before income taxes excluding specific items	595,855	566,891	5.1 %
Income tax expense	156,489	143,451	9.1 %
Effective tax rate	26.4 %	25.7 %
Add back:
Tax deduction on acquisition-related and integration costs	279	—	— %
Impact on effective tax rate	(0.1 %)	— %
Tax deduction on Cost Optimization Program	—	2,240	(100.0 %)
Impact on effective tax rate	— %	— %
Income tax expense excluding specific items	156,768	145,691	7.6 %
Effective tax rate excluding specific items	26.3 %	25.7 %
Net earnings excluding specific items	439,087	421,200	4.2 %
Net earnings margin excluding specific items	12.0 %	12.0 %
Weighted average number of shares outstanding
Class A subordinate voting shares and Class B shares (multiple voting) (basic)	225,247,324	231,931,083	(2.9 %)
Class A subordinate voting shares and Class B shares (multiple voting) (diluted)	228,777,092	235,703,369	(2.9 %)
Earnings per share excluding specific items (in dollars)
Basic	1.95	1.82	7.1 %
Diluted	1.92	1.79	7.3 %

F2024

Reconciliation between constant currency revenue growth and growth

	For the years ended September 30
	2024		2023	%
In thousands of CAD except for percentages
Total CGI revenue	14,676,152		14,296,360                      2.7%
Constant currency revenue growth	0.9 %
Foreign currency impact	1.8 %
Variation over previous period	2.7 %

Reconciliation between earnings before income taxes and adjusted EBIT

		For the years ended September 30,
	2024	% of revenue               2023		% of revenue
In thousands of CAD except for percentage
Earnings before income taxes	2,290,951	15.6 %	2,197,913	15.4 %
Plus the following items:
Acquisition-related and integration costs	5,866	— %	53,401	0.4 %
Cost Optimization Program	91,063	0.6 %	8,964	0.1 %
Net finance costs	27,889	0.2 %	52,463	0.4 %
Adjusted EBIT	2,415,769	16.5 %	2,312,741	16.2 %

Net earnings and Diluted EPS, excluding specific items

	For the years ended September 30,
	2024	2023	Change
In thousands of CAD except for percentages and shares data
Earnings before income taxes	2,290,951	2,197,913	4.2 %
Add back:
Acquisition-related and integration costs	5,866	53,401	(89.0 %)
Cost Optimization Program	91,063	8,964	915.9 %
Earnings before income taxes excluding specific items	2,387,880	2,260,278	5.6 %
Income tax expense	598,236	566,664	5.6 %
Effective tax rate	26.1 %	25.8 %
Add back:
Tax deduction on acquisition-related and integration costs	763	11,336	(93.3 %)
Impact on effective tax rate	— %	(0.1 %)
Tax deduction on Cost Optimization Program	22,956	2,240	924.8 %
Impact on effective tax rate	(0.1 %)	— %
Income tax expense excluding specific items	621,955	580,240	7.2 %
Effective tax rate excluding specific items	26.0 %	25.7 %
Net earnings excluding specific items	1,765,925	1,680,038	5.1 %
Net earnings margin excluding specific items	12.0 %	11.8 %
Weighted average number of shares outstanding
Class A subordinate voting shares and Class B shares (multiple voting) (basic)	228,074,108	234,041,041	(2.5 %)
Class A subordinate voting shares and Class B shares (multiple voting) (diluted)	231,672,861	237,702,081	(2.5 %)
Earnings per share excluding specific items (in dollars)
Basic	7.74	7.18	7.8 %
Diluted	7.62	7.07	7.8 %

Reconciliation between long-term debt and lease liabilities and net debt

As at September 30,	2024	2023
In thousands of CAD except for percentages
Reconciliation between long-term debt and lease liabilities^1 and net debt:
Long-term debt and lease liabilities^1	3,308,403	3,742,284
Minus the following items:
Cash and cash equivalents	1,461,145	1,568,291
Short-term investments	3,279	7,332
Long-term investments	24,209	17,113
Fair value of foreign currency derivative financial instruments related to debt	—	14,904
Net debt	1,819,770	2,134,644
Net debt to capitalization ratio	16.2 %	20.4 %
Return on invested capital	16.0 %	16.0 %
Days sales outstanding	41	44

1	As at September 30, 2024, long-term debt and lease liabilities were $2,688.3 million ($3,100.3 million as at September 30, 2023) and $620.1 million ($642.0 million as at September 30, 2023), respectively, including their current portions.

SOURCE CGI Inc.

For more information: Investors: Kevin Linder, Senior Vice-President, Investor Relations [email protected], [phone]; Media: Andrée-Anne Pelletier, APR, PRP, Manager, Global Media and Public Relations, [email protected], [phone]