Mr. George Schindler reports

CGI REPORTS STRONG FOURTH QUARTER AND FISCAL 2023 RESULTS

CGI Inc. has released its financial results for the fiscal year ended Sept. 30, 2023.

For the fourth quarter of fiscal 2023, the company reported revenue of $3.51-billion, representing a year-over-year increase of 8.0 per cent. When excluding foreign currency variations, revenue grew by 2.2 per cent year over year. The quarter includes the calendar impact of one less available day to bill.

Earnings before income taxes totalled $557.9-million, up 14.8 per cent year over year, for a margin of 15.9 per cent, up 90 basis points compared with the same period last year. Adjusted EBIT was $573.0-million, up 9.8 per cent year over year, for a margin of 16.3 per cent, up 20 basis points compared with the same period last year.

Net earnings totalled $414.5-million, up 14.4 per cent compared with the same period last year, for a margin of 11.8 per cent. Diluted earnings per share, as a result, totalled $1.76 compared with $1.51 last year, representing an increase of 16.6 per cent.

In Q4, the company initiated a cost optimization program to accelerate actions to right-size its real estate portfolio globally and improve operational efficiencies, including the increased use of automation and global delivery, focused on administrative activities. In the quarter, $9.0-million was expensed, and the company plans to incur approximately $65-million of additional expenses over the first half of fiscal 2024 related to this program.

"CGI's resilience and strong positioning -- strategically, operationally and financially -- underpinned our team's ability to deliver on our profitable growth plan for the fourth quarter and fiscal year 2023," said George D. Schindler, president and chief executive officer. "During Q4, clients prioritized cost savings and modernization initiatives, driving a 26-per-cent increase in new CGI managed services bookings compared to last year. As we look ahead, we are taking the actions necessary to further strengthen our capacity to continue delivering value for shareholders. This includes cost optimization and strategic investments to advance the next wave of innovation and growth, including the responsible use of AI [artificial intelligence], a key enabler for bringing the right mix of our end-to-end offerings to clients to help them generate the ROI [return on investment] necessary from their digitization initiatives."

When excluding the cost optimization program, net of tax, net earnings totalled $421.2-million. This represents an increase of 12.9 per cent year over year, and a margin of 12.0 per cent. On the same basis, diluted earnings per share increased by 14.7 per cent to $1.79, up from $1.56 for the same period last year.

As of Sept. 30, 2023, the number of CGI consultants and professionals worldwide stands at approximately 91,500, representing a year-over-year net increase of 1,500 people and stable on a sequential-quarter basis.

Cash provided by operating activities was $628.7-million, or 17.9 per cent of revenue, representing an increase of 28.6 per cent on a year-over-year basis.

Bookings were $4-billion, up $360-million on a year-over-year basis, representing a book-to-bill ratio of 113.9 per cent. As of Sept. 30, 2023, the company's backlog stood at $26.06-billion, or 1.8 times annual revenue.

During the fourth quarter of fiscal 2023, the company invested $107.0-million back into its business and $324.7-million under its current normal course issuer bid to purchase for cancellation 2,398,900 of its Class A subordinate voting shares.

Fiscal 2023 results

The company reported revenue of $14.30-billion, representing a year-over-year increase of 11.1 per cent. When excluding foreign currency impacts, revenue grew by 8.0 per cent year over year.

Earnings before income taxes totalled $2.20-billion, up 11.7 per cent year over year, for a margin of 15.4 per cent, up 10 basis points compared with the same period last year. Adjusted EBIT was $2.31-billion, up 10.8 per cent year over year, for a margin of 16.2 per cent, stable when compared with last year.

Net earnings totalled $1.63-billion, up 11.3 per cent compared with the same period last year, for a margin of 11.4 per cent. Diluted earnings per share, as a result, totalled $6.86 compared with $6.04 last year, representing an increase of 13.6 per cent. When excluding acquisition-related and integration costs and the cost optimization program, both net of tax, net earnings totalled $1.68-billion. This represents an increase of 12.9 per cent year over year, and a margin of 11.8 per cent. On the same basis, diluted earnings per share increased by 15.3 per cent to $7.07, up from $6.13 for the same period last year.

Bookings were $16.26-billion, up $2.29-billion on a year-over-year basis, representing a book-to-bill ratio of 113.7 per cent.

Cash provided by operating activities was $2.11-billion, or 14.8 per cent of revenue, representing an increase of 13.3 per cent on a year-over-year basis.

During fiscal 2023, the company invested $409.1-million back into its business and $788.0-million under its current normal course issuer bid to purchase for cancellation 6,234,096 of its Class A subordinate voting shares.

Return on invested capital was 16.0 per cent, an increase of 30 basis points, both on a year-over-year and sequential basis.

As at Sept. 30, 2023, long-term debt and lease liabilities, including both their current and long-term portions, totalled $3.74-billion, down from $3.98-billion at the same time last year. As of the same date, net debt stood at $2.13-billion, down from $2.95-billion at the same time last year. The net-debt-to-capitalization ratio stood at 20.4 per cent at the end of September, 2023, down 840 basis points when compared with the prior year.

At the end of September, 2023, with cash of $1.6-billion on hand, excluding funds held for clients, and a fully available revolving credit facility, the company had $3.1-billion in readily available liquidity to pursue its build-and-buy profitable growth strategy.

Fiscal 2023 results conference call

Management will host a conference call this morning at 9 a.m. ET to discuss results. Participants may access the call by dialling 1-888-396-8049 or 1-416-764-8646 (conference ID 92584974), 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 at the CGI website. Interested parties may also access a replay of the call by dialling 1-877-674-7070 (passcode 584974) until Dec. 8, 2023.

About CGI Inc.

Founded in 1976, CGI is among the largest independent IT (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's fiscal 2023 reported revenues totalled $14.29-billion.

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