Capgemini Reports First Quarter Revenue Growth Amid Outlook

Capgemini SE shows a slight revenue increase in Q1 2025. The IT company expects revenue growth between -2% to +2% for the fiscal year, with bookings up 2.8%. This outlook may affect stock performance in the near term.

Date: 29-04-2025

AI Rating: 6

Capgemini SE's announcement reveals key insights into the company's current financial health and future projections. The company reported Q1 2025 revenues of 5.55 billion euros, marking a slight increase of 0.5% at current exchange rates compared to the previous year. However, it's important to note that, at constant exchange rates, revenues showed a decline of 0.4%.

Regional Performance: The North American market, accounting for a significant 28% of Group revenues, posted a modest 0.8% growth year-over-year. Further contributing to revenue resilience, the UK and Ireland saw a strong 3.9% increase, indicative of regional demand. Moreover, the Asia-Pacific and Latin America regions experienced substantial growth at 7.6%, suggesting robust performance in those markets.

Bookings and Future Outlook: Notably, bookings, which are a forward-looking indicator of future revenue, rose by 2.8% to 5.88 billion euros, which is a positive sign of demand in the IT services sector. However, the reaffirmed outlook for fiscal 2025 includes revenue growth expectations ranging from -2.0% to +2.0% at constant currency, indicating some uncertainty in performance and market conditions ahead. Additionally, an operational margin forecasted between 13.3% and 13.5% suggests a stable but cautious management of costs and profitability.

The anticipation of organic free cash flow around 1.9 billion euros is promising as it indicates a healthy cash position to support operations and potential investments. However, the revenue growth outlook being centered around zero indicates potential headwinds that could pressure the stock price.

Stocks: CGEMY CAPP