CGI Q2 Revenue Up 3.3% to $4.2B; Book-to-Bill at 104%
CGI reported Q2 revenue of $4.2 billion, up 3.3% year-over-year, powered by acquisitions and strong North American demand, with a book-to-bill ratio of 104%, including 122% in U.S. Federal and 114% in Germany. The company holds $2.2 billion in capital resources but noted slower March share buybacks due to lower free cash flow while its tax rate rose to 26.6%.
1. Q2 Financial Performance
CGI posted Q2 revenue of $4.2 billion, a 3.3% year-over-year increase driven by business acquisitions and strong North American client demand. The firm recorded a book-to-bill ratio of 104%, led by U.S. Federal at 122% and Germany at 114%.
2. Cash Flow and Capital Position
Free cash flow dipped in March, slowing share buybacks for the quarter. CGI retains $2.2 billion in capital resources with a net debt-to-EBITDA ratio just above one, supporting future growth and capital returns.
3. Regional Operational Trends
Manufacturing demand in France and Germany softened due to economic challenges, while decision-making delays persisted in Nordic markets. The U.S. Federal unit also experienced slower ramp-up of new contracts, impacting near-term growth.
4. AI Strategy and Tax Impact
Strategic partnerships with OpenAI and Google Cloud enhance CGI's AI-powered managed services, aiming to reduce project costs by up to 50%. The effective tax rate rose to 26.6% following a corporate surcharge in France, pressuring margins.