Mr. George Schindler reports

CGI REPORTS STRONG THIRD QUARTER FISCAL 2023 RESULTS

CGI Inc. has released its financial results for the third quarter of fiscal 2023.

Q3 fiscal 2023 results

"In the third quarter of fiscal 2023, our team again delivered double-digit EPS [earnings per share] accretion and sustained margin expansion on a year-over-year basis," said George D. Schindler, president and chief executive officer. "Our results were supported by the combination of our profitable growth strategy, proven operational discipline and clients' continued trust in CGI as their partner of choice for delivering ROI-led digitization. Strong quarterly bookings were driven by managed services and intellectual property solutions across geographies, highest in government and financial services sectors. Given the current macroeconomic environment, CGI's diverse portfolio of geographies, industries and services serve as a resilient foundation for profitable growth."

For the third quarter of fiscal 2023, the company reported revenue of $3.62-billion, representing a year-over-year increase of 11.2 per cent. When excluding foreign currency impacts, revenue grew by 6.3 per cent year-over-year.

Earnings before income taxes were $559-million, up 14.3 per cent year-over-year, for a margin of 15.4 per cent, up 40 basis points compared with the same period last year. Adjusted EBIT was $584.8-million, up 12.5 per cent year-over-year, for a margin of 16.1 per cent, up 10 basis points compared with the same period last year.

Net earnings were $415-million, up 13.9 per cent compared with the same period last year, for a margin of 11.5 per cent. Diluted earnings per share, as a result, were $1.75 compared with $1.51 last year, representing an increase of 15.9 per cent. When excluding acquisition-related and integration costs, net of tax, net earnings were $425.7-million. This represents an increase of 14.7 per cent year-over-year, and a margin of 11.7 per cent. On the same basis, diluted earnings per share increased by 16.9 per cent to $1.80, up from $1.54 for the same period last year.

The number of CGI consultants and professionals worldwide currently stands at approximately 91,500, representing a year-over-year net increase of 3,000 people.

Cash provided by operating activities was $409.1-million, or 11.3 per cent of revenue, representing a decrease of 2.4 per cent on a year-over-year basis. On a fiscal 2023 year-to-date basis, cash provided by operating activities was $1.48-billion, or 13.8 per cent of revenue, representing an increase of 7.8 per cent on a year-over-year basis.

Bookings were $4.39-billion, up $978-million on a year-over-year basis, representing a book-to-bill ratio of 121.1 per cent. As of June 30, 2023, the company's backlog stood at $25.63-billion or 1.8 times annual revenue.

During the third quarter of fiscal 2023, the company invested $101.5-million back into its business and $53.1-million under its current normal course issuer bid to purchase for cancellation 390,100 of its Class A subordinate voting shares, at a weighted average price of $136.02.

Return on invested capital (ROIC) was 15.7 per cent, a decrease of 10 basis points when compared with the prior year, and up 10 basis points sequentially.

As at June 30, 2023, long-term debt and lease liabilities, including both their current and long-term portions, were $3.77-billion, down from $3.84-billion at the same time last year. As of the same date, net debt stood at $2.28-billion, down from $3.07-billion at the same time last year. The net debt-to-capitalization ratio stood at 21.7 per cent at the end of June, 2023, down 890 basis points when compared with the prior year.

At the end of June, 2023, with cash of $1.5-billion on hand, excluding funds held for clients, and a fully available revolving credit facility, the company had $3-billion in readily available liquidity to pursue its build and buy profitable growth strategy.

Q3 fiscal 2023 results conference call

Management will host a conference call this morning at 9 a.m. (EDT) to discuss results. Participants may access the call by dialling 1-888-396-8049 or 1-416-764-8646, conference ID: 22098618, or via the CGI website. For those unable to participate on the live call, a podcast and copy of the slides will be archived for download on the CGI website. Interested parties may also access a replay of the call by dialling 1-877-674-7070, passcode: 098618, until Aug. 26, 2023.

About CGI Inc.

Founded in 1976, CGI is among the largest independent information technology and business consulting services firms in the world. With 91,500 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 2022 reported revenue is $12.87-billion and CGI shares are listed on the Toronto Stock Exchange (GIB.A) and the New York Stock Exchange (GIB).

An anonymous director reports