CGI (GIB) Expands Clientele With FBI and Honolulu County
CGI GIB is making significant strides in the public sector by securing strategic partnerships aimed at modernizing and enhancing various governmental operations. CGI’s solutions have recently been selected by the likes of the Federal Bureau of Investigation (FBI) and the City and County of Honolulu.
Its wholly-owned U.S. subsidiary, CGI Federal (“CGI”), has been selected as a technology partner for the FBI, a role that underscores its capabilities in IT modernization. Through this partnership, CGI will contribute to the FBI's goal of lowering costs and increasing the success rate of projects and programs.
This collaboration falls under the FBI Information Technology Supplies and Support Services 2nd Generation (ITSSS-2) Blanket Purchase Agreement (BPA), which has a ceiling value of $8 billion. The BPA, awarded under the General Services Administration Multiple Award Schedule, allows CGI to bid on various task orders.
In Honolulu, CGI has successfully launched CGI Advantage, an enterprise resource planning (ERP) solution that integrates financial, personnel, and performance data on a unified platform. This platform automates budget processes and provides the flexibility to adopt new technologies. The project required significant technological upgrades and extensive engagement with local stakeholders.
The deployment of CGI Advantage in Honolulu has digitized manual processes, integrated ERP functions with other city and county systems, and utilized robotic process automation (RPA) to process Utility Billing Invoices. This transformational ERP solution is streamlining operations and enhancing efficiency across Honolulu's budgeting and financial systems.
CGI Rides on Expanding Federal Clientele
CGI’s expanding customer base and portfolio strength are expected to drive top-line growth. GIB’s strong partner base, which includes Alphabet, Microsoft and Amazon, has been a key catalyst.
CGI’s selection by Los Angeles County to modernize its core systems represents another significant milestone. The 10-year engagement focuses on upgrading the County's financial, budget, inventory, payroll and human resources systems through CGI Advantage.
The new ERP system will empower Los Angeles County’s workforce, enable data-driven decision-making and increase mobility for public service delivery. It supports the County’s extensive operations, including payroll for over 110,000 employees, compliance with more than 60 union agreements, and management of over $12 billion in disbursements.
In the second quarter of 2024, revenues increased 0.7% year over year to CAD 3.7 billion. Revenues from government business increased 5.7% year over year on a constant currency basis.
GIB’s expanding international footprint has been a key catalyst. In the reported quarter, overall bookings were CAD 3.8 billion for a book-to-bill ratio of 100% and 113% on a trailing 12-month basis. Booking ratios for the reported quarter were led by Finland, Poland and Baltics at 127%, Western and Southern Europe at 115%, and U.K. and Australia at 109%. Global backlog hit CAD 26.8 billion in the reported quarter.
However, cautionary spending and overall slow procurement decision-making hurt CGI’s near-term prospects. Shares have declined 6.5% year to date, underperforming the broader Zacks Computer & Technology sector’s return of 25.3%.
GIB YTD Performance
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Zacks Rank & Stocks to Consider
CGI currently carries a Zacks Rank #4 (Sell).
monday.com MNDY, NVIDIA NVDA, and Dropbox DBX are some better-ranked stocks in the broader sector, each flaunting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Year to date, shares of MNDY and NVDA have gained 22.2% and 155.3%, respectively. DBX shares have declined 25.8%.
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