Revenue Growth
Total revenue of CAD 4.1 billion, up 7.7% year-over-year (up 3.4% ex-foreign exchange). Growth was driven by acquisitions and continued demand in APAC.
January 28th, 2026
Summary
- Earnings Call Date:
- 2026-01-28
- Change Since:
- -26.67%
- Next Earnings Date:
- 2026-07-29
Earnings Call Sentiment
PositiveThe call conveyed a broadly positive operational and financial picture: revenue, bookings, backlog, cash generation, EPS and capital returns all showed solid gains while the company advanced its AI strategy and talent base. Challenges were largely intermittent and structural transition issues—notably the U.S. federal shutdown, some one-time charges, SI&C trailing conversion below 100% and slower enterprise infrastructure modernization for AI. Management expects sequential improvement through the year but flagged near-term geopolitical and federal funding lumpiness as risks.
Company Guidance
The company guided to sequential improvement next quarter and “continuing improvement for the rest of the year” (with the caveat of U.S. federal shutdown risk), targeting improved organic constant‑currency growth and margin pickup versus the Q1 adjusted EBIT of $655M (16.1% margin, down 10 bps) and adjusted diluted EPS of $2.12 (+8% y/y); tax rate guidance is 26–27% (Q1 effective rate 26.3%), the Board approved an NCIB to repurchase up to 19 million shares through Feb 2027 and declared a quarterly cash dividend of $0.17/share (record Feb 18, payable Mar 20), and management reiterated it expects to remain very active in buybacks given $2.4B in available capital resources and a net debt leverage ratio of 1x—backed by strong bookings ($4.5B in Q1; book‑to‑bill 110%; trailing‑12‑month bookings ≈$18B, +12% y/y) and a $31.3B contracted backlog (1.9x revenue).
Strong Bookings and Backlog
Quarterly bookings of CAD 4.5 billion with a book-to-bill of 110%. Trailing 12-month bookings rose 12% to nearly CAD 18 billion. Contracted backlog reached CAD 31.3 billion (1.9x revenue).
Profitability and EPS Improvement
Adjusted EBIT of CAD 655 million, up 7.1% year-over-year, with an adjusted EBIT margin of 16.1% (down 10 bps). Adjusted net earnings were CAD 461 million (11.3% margin). Diluted adjusted EPS was CAD 2.12, up 8% year-over-year; reported EPS CAD 2.03, up 6%.
Robust Cash Generation and Balance Sheet
Operating cash flow of CAD 872 million (21.4% of revenue). DSO improved to 37 days (8-day sequential improvement). CAD 2.4 billion in readily available capital and a net debt leverage ratio of 1 provide capacity for growth and M&A.
Active Capital Allocation and Shareholder Returns
Invested CAD 87 million into the business (including AI), CAD 106 million on acquisitions, repurchased CAD 577 million of stock, and returned CAD 37 million in dividends. Board renewed NCIB authorizing up to 19 million shares and approved a CAD 0.17 quarterly dividend.
Managed Services and SI&C Momentum
Managed Services increased by more than CAD 600 million (≈8%) over the past 12 months. Managed Services book-to-bill was 117% (trailing 12-month 122%). SI&C revenue grew 9.8% year-over-year in constant currency and SI&C book-to-bill reached 100% for the quarter.
Geographic / Acquisition-Led Growth
APAC delivery center growth of 5.8% driven by managed services; UK & Australia segment grew 31% following BJSS acquisition; Western & Southern Europe grew 9% led by the Apside acquisition. Closed mergers with a Comarch division (Poland/Baltics) and Online Business Systems (Canada), adding >800 consultants.
Advances in AI Strategy and Talent
Approximately 40% of consultants now have advanced AI/data expertise (more than double year-over-year). 65% of CGI IT solutions incorporate AI-enabled intelligent automation. New alliances with Google Cloud and OpenAI, internal AI exchange launched, and notable AI-enabled client wins and use-cases driving enterprise adoption.
""\\"Operator
Good morning, ladies and gentlemen. Welcome to CGI's First Quarter Fiscal 2026 Conference Call. I would now like to turn the meeting over to Mr. Kevin Linder, SVP of Investor Relations. Please go ahead, Mr. Linder.\\\
Kevin Linder
Thank you, Julie, and good morning. With me to discuss CGI's first quarter fiscal 2026 results are Francois Boulanger, our President and CEO; and Steve Perron, Executive Vice President and CFO. This call is being broadcast on cgi.com and recorded live at 9:00 a.m. Eastern Time on Wednesday, January 28, 2026. Supplemental slides as well as the press release we issued earlier this morning are available for download, along with our MD&A, financial statements and accompanying notes, all of which have been filed with both SEDAR+ and EDGAR. Please note that some statements made on the call may be forward-looking. Actual events or results may differ materially from those that are expressed or implied, and CGI disclaims any intent or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The complete safe harbor statement is available in both our MD&A and press release as well as on cgi.com.
We recommend our investors read it in its entirety. We are reporting our financial results in accordance with International Financial Reporting Standards or IFRS. As always, we will also discuss non-GAAP performance measures, which should be viewed as supplemental. The MD&A contains definitions of each one used in our reporting. All of the dollar figures expressed on this call are Canadian, unless otherwis...
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