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CGI's Q2 results (period ending 31st March 2025) show total revenue reaching CAN$4.02 billion, representing a robust 7.6% year-on-year increase (3.3% in constant currency). This growth was driven by recent acquisitions and organic growth within government and financial services vertical markets, partially offset by lower demand in the manufacturing, retail, and distribution (MRD), and communications sectors.
The UK & Australia segment stood out as the top performer, with revenue growing by 18.6% year-on-year to CAN$477.0 million (12.1% in constant currency). This impressive growth was significantly influenced by CGI's acquisition of Leeds-based BJSS, which completed on 25th February 2025 (see *UKHotViewsExtra* CGI to buy BJSS: UK headcount boost of 40% | TechMarketView).
With just over a month of BJSS revenue contribution in the quarter (estimated at around CAN$51 million based on BJSS's pre-acquisition annual revenue), we estimate that approximately 12.7 percentage points of the 18.6% growth came from the acquisition, suggesting an organic growth rate of approximately 5.9%.
This estimated organic growth represents an improvement from Q1 FY25's more modest 3.2% constant currency growth, though not quite matching the stronger 7.2% constant currency growth seen in Q4 FY24. Looking at the broader trend, UK & Australia growth has been on a recovery trajectory after a particularly weak period in the middle of FY24 (when constant currency growth was 0.0% and 0.4% in Q2 and Q3 respectively), with the BJSS acquisition now providing significant additional momentum (see CGI FY24: financial strength to be active consolidator | TechMarketView).
While the topline growth was strong, the UK & Australia segment's adjusted EBIT margin decreased to 14.5% from 16.0% in the same period last year, primarily due to "the dilutive impact of a recent business acquisition." This margin compression is typical following major acquisitions as integration activities progress. In Q1 (before the BJSS acquisition), the UK & Australia segment had maintained a stronger adjusted EBIT margin of 16.5%.
On a client geographic basis, government, alongside communications and utilities, were the top two vertical markets for UK & Australia, generating combined revenues of approximately CAN$378 million for the quarter. The addition of BJSS enhances CGI's capabilities across both public and private sectors, with BJSS having particular strength in health (approaching £100m in annual revenue) – see Public sector supplier prospects 2025 and beyond | TechMarketView.
The UK & Australia segment continues to show healthy demand, with bookings of CAN$536.4 million for the quarter and a book-to-bill ratio of 109.7% for the trailing twelve months. This positive ratio indicates continued momentum in securing new business, suggesting sustained growth potential beyond the immediate boost from the BJSS acquisition.
The March 2025 completion of a US$650 million senior unsecured notes offering (see CGI secures $650M in debt financing, signalling potential M&A activity | TechMarketView) provides financial flexibility, potentially signalling continued M&A activity in line with CEO François Boulanger's stated intention for CGI to act as "an active consolidator in the market.
Posted by: Georgina O'Toole at 20:30
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