CGI Group (NYSE:GIB) Posts Earnings Results, Beats Expectations By $0.05 EPS

CGI Group (NYSE:GIB) (TSE:GIB.A) posted its quarterly earnings data on Wednesday. The technology company reported $1.66 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.61 by $0.05, Zacks reports. CGI Group had a net margin of 10.26% and a return on equity of 18.72%. The business had revenue of $2.95 billion during the quarter, compared to analysts’ expectations of $2.94 billion. During the same period last year, the firm posted $2.10 earnings per share. The business’s revenue was up 2.5% on a year-over-year basis.

Here are the key takeaways from CGI Group’s conference call:

• Q3 earnings and cash generation were strong: Revenue rose 2.5% year over year to CAD 4.2 billion, adjusted EPS increased 9% to CAD 2.29, and cash from operations reached CAD 605 million.
• Backlog and demand indicators remain healthy. Trailing-12-month bookings were CAD 17.8 billion with a 108% book-to-bill ratio, while contracted backlog totaled CAD 31.8 billion, or 1.9 times annual revenue.
• AI-related opportunities are expanding. CGI said its overall 12-month pipeline grew more than 10% year over year, with AI-embedded opportunities nearly doubling to approximately CAD 10 billion and managed-services and SI&C pipelines up 20% and more than 30%, respectively.
• Organic growth remained modest at 1.3% excluding foreign exchange, although U.S. Federal performance improved and APAC and European growth benefited from acquisitions and delivery-center demand. Management also acknowledged some delayed decision-making in Europe and expects future tax rates of 26% to 27%.
• CGI plans to continue investing in AI capabilities, acquisitions, and sovereign infrastructure while returning capital through buybacks and dividends; its low leverage and CAD 3.2 billion in available capital resources leave room for larger M&A.

CGI Group Price Performance

Shares of NYSE:GIB traded down $1.22 on Thursday, reaching $73.28. 712,475 shares of the company traded hands, compared to its average volume of 497,235. The stock has a market capitalization of $15.50 billion, a PE ratio of 13.23 and a beta of 0.48. The company has a debt-to-equity ratio of 0.28, a current ratio of 0.95 and a quick ratio of 0.68. The company’s 50 day moving average is $66.65 and its 200-day moving average is $72.32. CGI Group has a fifty-two week low of $59.63 and a fifty-two week high of $98.19.

CGI Group Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Friday, September 18th. Shareholders of record on Friday, August 14th will be issued a $0.17 dividend. The ex-dividend date of this dividend is Friday, August 14th. This represents a $0.68 annualized dividend and a dividend yield of 0.9%. CGI Group’s dividend payout ratio is currently 9.03%.

Key Stories Impacting CGI Group

Here are the key news stories impacting CGI Group this week:

• Positive Sentiment: Quarterly earnings exceeded expectations. CGI reported adjusted earnings of $1.66 per U.S. share, above the $1.61 consensus estimate, while revenue reached approximately $2.95 billion versus expectations of $2.94 billion. Earnings also improved from the prior-year quarter on a comparable basis. CGI Group quarterly earnings report
• Positive Sentiment: Official results highlighted significant EPS and profit growth. In Canadian-dollar terms, fiscal Q3 revenue rose 2.5% year over year to C$4.19 billion, while diluted EPS increased 22.5% to C$2.23. Net earnings grew 13.8%, and earnings before income taxes rose 14.9%, indicating improved profitability and margins. CGI reports third quarter fiscal 2026 results
• Positive Sentiment: Bookings and backlog support future revenue visibility. CGI generated C$4.20 billion in bookings, producing a 100.1% book-to-bill ratio, or 108.1% on a trailing 12-month basis. Its C$31.79 billion backlog equates to roughly 1.9 times annual revenue.
• Positive Sentiment: Investor ratings remain supportive. A GuruFocus assessment gave CGI a GF Score of 77, reflecting favorable evaluations of the company’s profitability, growth, financial strength and valuation. CGI shares and GF Score analysis
• Neutral Sentiment: CGI declared a quarterly dividend of $0.17 per share. The payment is scheduled for September 18 for shareholders of record on August 14. The roughly 0.9% annualized yield provides modest shareholder income but is unlikely to be a major stock catalyst.
• Negative Sentiment: Revenue growth remained relatively subdued. Although sales increased 2.5% year over year, constant-currency growth was only 1.3%, suggesting currency effects and a slower top-line expansion could limit near-term upside.

Institutional Investors Weigh In On CGI Group

Hedge funds have recently modified their holdings of the stock. Strive Financial Group LLC acquired a new stake in CGI Group during the 4th quarter worth about $37,000. EverSource Wealth Advisors LLC increased its position in shares of CGI Group by 53.3% in the second quarter. EverSource Wealth Advisors LLC now owns 1,452 shares of the technology company’s stock worth $152,000 after acquiring an additional 505 shares in the last quarter. Entropy Technologies LP purchased a new position in shares of CGI Group in the third quarter worth approximately $236,000. AQR Capital Management LLC acquired a new stake in shares of CGI Group during the first quarter valued at approximately $347,000. Finally, Danske Bank A S purchased a new stake in shares of CGI Group in the 3rd quarter valued at approximately $768,000. 66.68% of the stock is owned by hedge funds and other institutional investors.

Wall Street Analyst Weigh In

A number of equities research analysts have weighed in on GIB shares. Weiss Ratings restated a “sell (d+)” rating on shares of CGI Group in a research report on Wednesday, June 24th. UBS Group lowered their price target on CGI Group from $79.00 to $70.00 and set a “neutral” rating on the stock in a research report on Thursday, April 30th. Royal Bank Of Canada cut CGI Group from an “outperform” rating to a “sector perform” rating and lowered their price target for the company from $150.00 to $100.00 in a research report on Thursday, April 30th. Finally, TD Securities lowered CGI Group from a “buy” rating to a “hold” rating in a report on Thursday, July 23rd. Six investment analysts have rated the stock with a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, the stock currently has an average rating of “Reduce” and an average price target of $83.67.

About CGI Group

CGI Group Inc is a global information technology and business consulting firm that delivers a broad range of services including IT consulting, systems integration, application development and maintenance, infrastructure and network services, managed IT and business process outsourcing. The company works with clients to design, build and operate IT systems and business solutions, with capabilities spanning cloud and hybrid IT environments, cybersecurity, data analytics and artificial intelligence, digital transformation and enterprise resource planning implementations.

Founded in 1976 in Quebec by Serge Godin and André Imbeau, CGI has grown from a regional systems integrator into a multinational professional services organization.