CGI Group's (GIB) Q1 Earnings Beat Estimates, Revenues Up Y/Y
CGI Group GIB reported first-quarter fiscal 2024 non-GAAP earnings of $1.34 per share, beating the Zacks Consensus Estimate by 2.29% and increasing 9.8% year over year.
In domestic currency (C$), the company reported non-GAAP earnings of $1.83 per share, which increased 10.2% year over year.
Revenues of $2.65 billion beat the consensus mark by 2.02%. At constant currency (cc), the top line increased by 1.5%.
In domestic currency (C$), revenues amounted to $3.6 billion, increasing by 4.4% year over year.
CGI Group, Inc. Price, Consensus and EPS Surprise
CGI Group, Inc. price-consensus-eps-surprise-chart | CGI Group, Inc. Quote
Geographically, Asia Pacific increased 7%; and Western and Southern Europe increased 4%. However, Canada revenues dropped 1.4%, while U.S. commercial and state government declined 1.2%.
Top Line Details
Managed IT and Business Process Services contributed 55% to revenues. The upside in CGI Group’s revenues was supported by growing demand among customers and lower operating expenses.
CGI’s product pipeline reflected an increasing demand for managed services as the total value of opportunities increased by 40% sequentially, which contributed to CGI’s first-quarter revenues.
Business, consulting, strategic IT consulting and systems integration services contributed 45% to revenues. The rising demand for CGI Group’s offerings was evident from the company’s rising customer base.
Within the government sector, CGI experienced significant growth of 7.5% at cc, solidifying its position as the company's largest vertical market, contributing 36% to fiscal first-quarter revenues.
CGI continued to invest in its business, including $85 million in AI investments. Strategic partnerships, such as the global partnership with Korber in the pharma and life sciences sector, contribute to CGI's growth strategy.
Operating Details
CGI Group reported adjusted EBIT of $584.2 million, which was up 5.4% year over year. Adjusted EBIT margin improved 10 basis points year over year to 16.2%.
In the first quarter, bookings were $4.19 billion, which represented a book-to-bill ratio of 116.2%. As of Dec 31, 2023, CGI Group’s backlog stood at $26.57 billion.
Balance Sheet and Cash Flow
CGI Group had cash and cash equivalent and short-term investments of $1.15 billion compared with $1.57 billion as of Sep 30, 2023.
As of Dec 31, 2023, CGI Group had a total debt of $2.37 billion compared with $3.10 billion as of Sep 30, 2023.
It generated $577.2 million in cash from operations compared with $628.7 million in the previous quarter.
Zacks Rank & Other Stocks to Consider
GIB currently carries a Zacks Rank #2 (Buy).
The company’s shares have gained 10.7% in the past six months compared with the Zacks Computer & Technology sector’s growth of 12.8%.
Pinterest PINS, AvidXchange AVDX and Shopify SHOP are some better-ranked stocks that investors can consider in the broader sector, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shopify’s shares have gained 18.7% in the past six months. SHOP is set to report its fourth-quarter 2023 results on Feb 13.
Pinterest’s shares have gained 29.4% in the past six months. PINS is set to report its fourth-quarter 2023 results on Feb 8.
AvidXchange’s shares have declined 12% in the past six months. AVDX is set to report its fourth-quarter 2023 results on Feb 28.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
CGI Group, Inc. (GIB) : Free Stock Analysis Report
Shopify Inc. (SHOP) : Free Stock Analysis Report
AvidXchange Holdings, Inc. (AVDX) : Free Stock Analysis Report
Pinterest, Inc. (PINS) : Free Stock Analysis Report
