Monitor the securities class action for potential settlement or dismissal developments, as it introduces legal overhang. The Germany segment's continued weakness (revenue -6.3% cc, EBIT -50.6%) bears watching for signs of stabilization or further deterioration. The strong 12-month trailing book-to-bill (108.1%) supports forward revenue, but the deceleration in organic growth (1.3% cc) suggests limited near-term catalysts for the common stock. For preferred holders, the credit profile remains stable with robust cash generation and an upsized $2.5B credit facility.
Price Chart
Executive Summary
CGI reported Q3 FY2026 revenue of $4.19 billion, up 2.5% YoY (1.3% constant currency), and diluted EPS of $2.23, up 22.5% YoY. Adjusted EBIT margin held steady at 16.3%, while operating cash flow improved to $604.5 million (14.4% of revenue). The quarter showed mixed signals: strong EPS growth driven by aggressive share buybacks and margin discipline, but organic revenue growth remained tepid at 1.3% constant currency, with notable weakness in the Germany segment (revenue -6.3% cc, adjusted EBIT -50.6%) and U.S. Commercial & State Government (-3.9% cc). A new securities class action was disclosed post-quarter, adding legal overhang. The 12-month trailing book-to-bill of 108.1% and backlog of $31.8 billion provide forward revenue visibility, but the deceleration in organic growth and segment-level pressures warrant a neutral-to-cautious read-through for the common stock. For the preferred stock (GIB-P), the credit story is stable: leverage ticked up to 26.6% (from 23.4%) due to buybacks and acquisitions, but operating cash flow remains robust and the credit facility was upsized to $2.5B, supporting the dividend.
Key Facts
- Revenue of $4,193.0M, +2.5% YoY (+1.3% constant currency)
- Diluted EPS of $2.23, +22.5% YoY; adjusted diluted EPS of $2.29, +9.0% YoY
- Adjusted EBIT margin stable at 16.3%; earnings before income taxes margin improved to 15.1% from 13.5%
- Operating cash flow of $604.5M (14.4% of revenue), up from $486.6M (11.9%) YoY
- Book-to-bill of 100.1% for Q3, 108.1% trailing twelve months; backlog of $31.79B (1.9x annual revenue)
- Germany segment revenue -6.3% constant currency; adjusted EBIT -50.6% to $13.5M
- U.S. Commercial & State Government revenue -3.9% constant currency
- Net debt-to-capitalization ratio increased to 26.6% from 23.4% YoY, driven by $1.37B in share buybacks YTD
- New securities class action filed on July 20, 2026, alleging misrepresentations in public disclosures; seeks unspecified damages
- Quarterly dividend maintained at $0.17 per share
Financial Impact
Revenue +$102.8M YoY; diluted EPS +$0.41 YoY; operating cash flow +$117.9M YoY
Risk Factors
- Securities class action filed July 20, 2026, alleging misrepresentations; outcome uncertain and could result in material damages
- Germany segment revenue declining 6.3% constant currency with adjusted EBIT margin halved to 6.2%
- U.S. Commercial & State Government revenue down 3.9% constant currency, signaling demand weakness in key verticals
- Net debt-to-capitalization ratio rising to 26.6% from 23.4% YoY due to aggressive share buybacks and acquisitions
- U.S. Federal revenue down 7.1% YoY for the nine-month period due to government efficiency initiatives and shutdown
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 6-K Filing (Primary) | 0001061574-26-000017 |
| Document: skeletonfsq3fy26.htm | 0001061574-26-000017 |
| Document: cgi-fy26_q3xpressrelease.htm | 0001061574-26-000017 |
| Document: cgi_form-6xkxq3fy2026xmdaf.htm | 0001061574-26-000017 |
| Document: 0001061574-26-000017-index-headers.html | 0001061574-26-000017 |
| Document: 0001061574-26-000017-index.html | 0001061574-26-000017 |
| Document: 0001061574-26-000017.txt | 0001061574-26-000017 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Aug 31, 2026 4w ago | GOVT-CONTRACT | $75.25 $67.62 | ▼ −10.14% | ▼ −9.95% | $70.19 (−6.72%) |
Jul 29, 2026 9w ago | 6-K | $74.50 $73.24 | ▼ −1.69% | ▼ −6.71% | $70.19 (−5.79%) |
Jul 27, 2026 9w ago | Court Ruling | $69.47 $74.82 | ▲ +7.70% | ▲ +4.40% | $70.19 (+1.04%) |
May 12, 2026 20w ago | 6-K | $63.19 $66.85 | ▲ +5.79% | ▲ +7.52% | $70.19 (+11.08%) |
Apr 29, 2026 22w ago | 6-K | $65.46 $67.63 | ▲ +3.32% | ▼ −2.73% | $70.19 (+7.23%) |
US Market Status
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