Capgemini Se Unsponsored ADR ((CGEMY)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Capgemini’s recent earnings call reflected a sentiment of resilience amidst a challenging market landscape. The company showcased positive growth in key sectors and regions, although it faced hurdles such as manufacturing challenges, currency impacts, and a decrease in net profit. The outlook remains cautious, influenced by geopolitical tensions and economic uncertainties.
Positive Constant Currency Growth in Q2
Capgemini reported a return to positive constant currency growth in Q2 2025, with a year-on-year increase of 0.7%. This growth highlights the company’s resilience in navigating a challenging environment, showcasing its ability to adapt and thrive despite external pressures.
Strong Bookings and Commercial Momentum
The company achieved strong bookings totaling EUR 11.993 billion in H1 2025, marking a 2.1% year-on-year growth. With a solid book-to-bill ratio of 1.08, Capgemini demonstrated robust commercial momentum, indicating a healthy pipeline and sustained client interest.
Strategic Wins in Cloud and AI
Capgemini secured significant contracts in the cloud and AI sectors, including a multiyear agreement with a public sector client in Europe and a strategic contract with a global aerospace company. These wins underscore Capgemini’s strategic focus on innovation and technology-driven solutions.
Growth in Financial Services and TMT Sectors
The financial services and TMT sectors experienced notable acceleration, each growing by 5.5% year-on-year at constant currency. This growth highlights Capgemini’s strong position in these sectors, driven by increasing demand for digital transformation and technology solutions.
Strong Performance in UK, Ireland, and Asia Pacific
Revenue growth in the UK and Ireland reached 6%, while Asia Pacific and Latin America enjoyed robust growth at 8.7%, fueled by the financial services and TMT sectors. This performance reflects Capgemini’s successful expansion and market penetration in these regions.
Decline in Manufacturing and Consumer Goods Sectors
The manufacturing sector remained weak in Q2 2025, with a year-on-year decline of 4%, and the consumer goods and retail sector experienced a slight contraction at minus 1.3%. These declines highlight the challenges faced by Capgemini in these sectors amidst broader market pressures.
Decreased Net Profit
Capgemini’s net profit group share decreased to EUR 724 million from EUR 835 million in H1 2024, with basic EPS down 13% year-on-year. This decline in profitability reflects the impact of external challenges and internal adjustments.
Stable Operating Margin Amid Costs
Despite increased restructuring costs, Capgemini maintained a stable operating margin at 12.4% of revenues. This stability indicates effective cost management and operational efficiency, even as the company adjusts its headcount in Europe.
Currency Headwinds
Currency movements, particularly the depreciation of the U.S. dollar, negatively impacted reported growth, with an expected impact of minus 1.5 to minus 2 points for the full year. This highlights the ongoing challenges posed by currency fluctuations.
Weakness in Continental Europe and France
Revenues in France declined by 5%, with growth in the public and TMT sectors offset by lower activity in manufacturing and consumer goods. This weakness reflects regional challenges and sector-specific pressures.
Forward-Looking Guidance
During the earnings call, Capgemini’s leadership provided cautious guidance amidst a challenging economic environment. The company expects constant currency growth between -1% and +1% for 2025, with an operating margin target of 13.3% to 13.5% and an organic free cash flow objective of around EUR 1.9 billion. A EUR 2 billion multiyear share buyback program was also announced, reflecting confidence in long-term value creation despite current uncertainties.
In summary, Capgemini’s earnings call highlighted a resilient performance in a challenging market, with positive growth in key sectors and regions. While facing challenges such as decreased net profit and currency impacts, the company remains cautiously optimistic about its future, focusing on strategic growth areas and maintaining operational stability. The forward-looking guidance underscores a balanced approach to navigating economic uncertainties while pursuing long-term growth opportunities.