The following is a summary of the CGI Inc. (GIB) Q2 2024 Earnings Call Transcript:

Financial Performance:

• CGI reported Q2 2024 revenue of CAD 3.7 billion, a slight increase of 0.7% year-over-year.

• The company saw Earnings Before Interest and Taxes (EBIT) of CAD 628 million, marking a 16.8% margin, a 60 basis point increase year-over-year, primarily credited to more IP-based revenues and cost optimization benefits.

• Net earnings stood at CAD 427 million.

• Operating activities provided CAD 502 million in cash, up by 7% year-over-year, representing 13.4% of total revenue.

• The company made a return of 15.9% on invested capital, which is 30 basis points higher than the previous year.

Business Progress:

• The company noted improved utilization as it focuses on growing industries like government, transportation, and utilities.

• IP revenue witnessed a 6.5% increase in constant currency.

• The company continues to heavily invest in AI and generative AI capabilities, with plans of embedding AI across its IP portfolio.

• CGI is actively pursuing acquisitions that would boost its earnings and intends on share repurchases or paying down debt as needed.

• The company reported significant bookings in integrated AI technologies, exceeding $200 million for Q2.

• CGI is focused on digital modernization projects and the anticipated increase in digital spending.

• There is significant growth stemming from managed services, which offsets slower spending in Systems Integration & Consulting (SI&C).

• 60% of the company's IP revenue now comes from software-as-a-service offerings. They also continue to introduce new technologies, primarily AI, into their operational IP elements.

More details: CGI Inc IR

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