Interim Condensed Consolidated Financial Statements of
CGI INC.
For the three months ended December 31, 2025 and 2024
(unaudited)
Interim Consolidated Statements of Earnings
For the three months ended December 31 (in thousands of Canadian dollars, except per share data) (unaudited)
Notes
2025
2024
$
$
Revenue
10
4,078,355
3,785,245
Operating expenses
Costs of services, selling and administrative
3,422,704
3,174,150
Restructuring, acquisition and related integration costs
6
26,245
13,364
Net finance costs
7
29,076
6,612
Net foreign exchange loss (gain)
538
(627)
3,478,563
3,193,499
Earnings before income taxes
599,792
591,746
Income tax expense
157,796
153,166
Net earnings
441,996
438,580
Earnings per share
Basic earnings per share
5b
2.05
1.95
Diluted earnings per share
5b
2.03
1.92
See Notes to the Interim Condensed Consolidated Financial Statements.
CGI Inc. – Interim Condensed Consolidated Financial Statements for the three months ended December 31, 2025 and 2024 1
Interim Consolidated Statements of Comprehensive Income
For the three months ended December 31 (in thousands of Canadian dollars) (unaudited)
2025
2024
$
$
Net earnings
441,996
438,580
Items that will be reclassified subsequently to net earnings (net of income taxes):
Net unrealized (losses) gains on translating financial statements of foreign operations
(190,250)
229,342
Net gains (losses) on cross-currency swaps and on translating long-term debt designated as hedges
of net investments in foreign operations
42,028
(75,228)
Deferred (costs) gains of hedging on cross-currency swaps
(2,618)
2,561
Net unrealized (losses) gains on cash flow hedges
(8,508)
22,023
Net unrealized losses on financial assets at fair value through other comprehensive income
(934)
(383)
Items that will not be reclassified subsequently to net earnings (net of income taxes):
Net remeasurement gains (losses) on defined benefit plans
744
(5,871)
Other comprehensive (loss) income
(159,538)
172,444
Comprehensive income
282,458
611,024
See Notes to the Interim Condensed Consolidated Financial Statements.
CGI Inc. – Interim Condensed Consolidated Financial Statements for the three months ended December 31, 2025 and 2024 2
Interim Consolidated Balance Sheets
(in thousands of Canadian dollars) (unaudited)
Notes
As at December 31, 2025
As at September 30, 2025
$
$
Assets
Current assets
Cash and cash equivalents
9c and 11
836,369
864,209
Accounts receivable
1,553,570
1,613,777
Work in progress
1,182,524
1,367,989
Current financial assets
11
5,218
6,167
Prepaid expenses and other current assets
184,852
193,896
Income taxes
19,290
28,705
Total current assets before funds held for clients
3,781,823
4,074,743
Funds held for clients
792,220
978,436
Total current assets
4,574,043
5,053,179
Property, plant and equipment
364,686
377,900
Right-of-use assets
555,530
541,987
Contract costs
371,377
370,932
Intangible assets
879,727
888,006
Other long-term assets
136,414
143,320
Long-term financial assets
163,880
162,438
Deferred tax assets
209,675
239,284
Goodwill
11,658,020
11,744,782
18,913,352
19,521,828
Liabilities
Current liabilities
Accounts payable and accrued liabilities
1,004,069
1,014,834
Accrued compensation and employee-related liabilities
1,172,965
1,269,767
Deferred revenue
639,219
577,286
Income taxes
99,978
79,333
Current portion of long-term debt
822,040
845,253
Current portion of lease liabilities
176,728
173,071
Provisions
133,216
144,331
Current derivative financial instruments
11
31,057
24,622
Total current liabilities before clients’ funds obligations
4,079,272
4,128,497
Clients’ funds obligations
788,523
973,673
Total current liabilities
4,867,795
5,102,170
Long-term debt
2,771,219
2,792,582
Long-term lease liabilities
521,054
520,413
Long-term provisions
31,701
39,665
Other long-term liabilities
336,171
341,173
Long-term derivative financial instruments
11
179,164
173,105
Deferred tax liabilities
64,833
71,673
Retirement benefits obligations
194,729
198,715
8,966,666
9,239,496
Equity
Retained earnings
7,297,175
7,428,172
Accumulated other comprehensive income
4
842,806
1,002,344
Capital stock
5a
1,493,280
1,499,917
Contributed surplus
313,425
351,899
9,946,686
10,282,332
18,913,352
19,521,828
See Notes to the Interim Condensed Consolidated Financial Statements.
CGI Inc. – Interim Condensed Consolidated Financial Statements for the three months ended December 31, 2025 and 2024 3
Interim Consolidated Statements of Changes in Equity
For the three months ended December 31 (in thousands of Canadian dollars) (unaudited)
Notes
Retained earnings
Accumulated other comprehensive income
Capital stock
Contributed surplus
Total equity
$
$
$
$
$
Balance as at September 30, 2025
7,428,172
1,002,344
1,499,917
351,899
10,282,332
Net earnings
441,996
—
—
—
441,996
Other comprehensive loss
—
(159,538)
—
—
(159,538)
Comprehensive income
441,996
(159,538)
—
—
282,458
Share-based payment costs
—
—
—
18,109
18,109
Income tax impact associated with share-based payments
—
—
—
210
210
Exercise of stock options
5a
—
—
17,882
(2,965)
14,917
Settlement of performance share units
5a
952
—
35,390
(53,828)
(17,486)
Purchase for cancellation of Class A subordinate voting shares and related tax
5a
(536,945)
—
(40,746)
—
(577,691)
Purchase of Class A subordinate voting shares held in trusts
5a
—
—
(19,163)
—
(19,163)
Cash dividends declared
5a
(37,000)
—
—
—
(37,000)
Balance as at December 31, 2025
7,297,175
842,806
1,493,280
313,425
9,946,686
Notes
Retained earnings
Accumulated other comprehensive income
Capital stock
Contributed surplus
Total equity
$
$
$
$
$
Balance as at September 30, 2024
7,129,370
451,253
1,470,333
377,034
9,427,990
Net earnings
438,580
—
—
—
438,580
Other comprehensive income
—
172,444
—
—
172,444
Comprehensive income
438,580
172,444
—
—
611,024
Share-based payment costs
—
—
—
24,278
24,278
Income tax impact associated with share-based payments
—
—
—
1,176
1,176
Exercise of stock options
5a
—
—
19,451
(3,179)
16,272
Settlement of performance share units
5a
(15,193)
—
31,621
(46,587)
(30,159)
Purchase for cancellation of Class A subordinate voting shares and related tax
5a
(137,341)
—
(7,939)
—
(145,280)
Purchase of Class A subordinate voting shares held in trusts
5a
—
—
(13,323)
—
(13,323)
Cash dividends declared
5a
(34,133)
—
—
—
(34,133)
Balance as at December 31, 2024
7,381,283
623,697
1,500,143
352,722
9,857,845
See Notes to the Interim Condensed Consolidated Financial Statements.
CGI Inc. – Interim Condensed Consolidated Financial Statements for the three months ended December 31, 2025 and 2024 4
Interim Consolidated Statements of Cash Flows
For the three months ended December 31 (in thousands of Canadian dollars) (unaudited)
Notes
2025
2024
$
$
Operating activities
Net earnings
441,996
438,580
Adjustments for:
Amortization and depreciation
148,752
141,518
Deferred income tax expense
23,525
2,994
Net foreign exchange gain
(1,495)
(8,584)
Share-based payment costs
18,109
24,278
Loss on sale of property, plant and equipment and on lease terminations
104
52
Net change in non-cash working capital items and others
9a
240,934
47,585
Cash provided by operating activities
871,925
646,423
Investing activities
Net change in short-term investments
(1,057)
1,489
Business acquisitions (net of cash acquired)
8
(105,711)
(30,041)
Loan receivable
—
1,358
Purchase of property, plant and equipment
(24,729)
(25,998)
Proceeds from sale of property, plant and equipment
—
1,295
Additions to contract costs
(22,846)
(22,253)
Additions to intangible assets
(38,926)
(34,913)
Purchase of long-term investments
(32,027)
(16,866)
Proceeds from sale of long-term investments
26,238
11,559
Cash used in investing activities
(199,058)
(114,370)
Financing activities
Payment of lease liabilities
(47,099)
(41,618)
Repayment of debt assumed from business acquisitions
11
(13,899)
—
Purchase for cancellation of Class A subordinate voting shares and related tax
5a
(576,613)
(152,949)
Issuance of Class A subordinate voting shares
5a
14,917
16,284
Purchase of Class A subordinate voting shares held in trusts
5a
(19,163)
(13,323)
Withholding taxes remitted on the net settlement of performance share units
5a
(17,486)
(30,159)
Cash dividends paid
5a
(37,000)
(34,133)
Net change in clients' funds obligations
(185,002)
438,130
Cash (used in) provided by financing activities
(881,345)
182,232
Effect of foreign exchange rate changes on cash, cash equivalents and cash included in funds held for clients
(11,280)
60,102
Net (decrease) increase in cash, cash equivalents and cash included in funds held for clients
(219,758)
774,387
Cash, cash equivalents and cash included in funds held for clients, beginning of period
1,568,712
1,694,729
Cash, cash equivalents and cash included in funds held for clients, end of period
1,348,954
2,469,116
Cash composition:
Cash and cash equivalents
836,369
1,801,250
Cash included in funds held for clients
512,585
667,866
See Notes to the Interim Condensed Consolidated Financial Statements.
CGI Inc. – Interim Condensed Consolidated Financial Statements for the three months ended December 31, 2025 and 2024 5
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended December 31, 2025 and 2024 (tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)
1.Description of business
CGI Inc. (the Company), directly or through its subsidiaries, provides managed information technology (IT) and business process services, business and strategic IT consulting and systems integration services, and intellectual property (IP) business solutions to help clients effectively realize their strategies and create added value. The Company was incorporated under Part IA of the Companies Act (Québec), predecessor to the Business Corporations Act (Québec) which came into force on February 14, 2011 and its Class A subordinate voting shares are publicly traded. The executive and registered office of the Company is situated at 1350 René-Lévesque Blvd. West, Montréal, Québec, Canada, H3G 1T4.
2.Basis of preparation
These interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB). In addition, the interim condensed consolidated financial statements have been prepared in accordance with the accounting policies set out in Note 3, Summary of material accounting policies, of the Company’s consolidated financial statements for the years ended September 30, 2025 and 2024 which were consistently applied to all periods presented.
These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the years ended September 30, 2025 and 2024.
The Company’s interim condensed consolidated financial statements for the three months ended December 31, 2025 and 2024 were authorized for issue by the Board of Directors on January 27, 2026.
3.Accounting policies
FUTURE ACCOUNTING STANDARD CHANGES
The following standard amendments have been issued and will be effective as of October 1, 2026 for the Company, with earlier application permitted. The Company is in the process of evaluating the impact that these standard amendments may have on its interim condensed consolidated financial statements.
Classification and measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7
In May 2024, the IASB issued Amendments to the Classification and Measurement of Financial Instruments, which amend IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures. The standard amendments clarify that a financial liability is derecognized on the settlement date, specifically when the related obligation is discharged or cancelled or expires or the liability otherwise qualified for derecognition. Furthermore, they clarify the treatment of non-recourse assets and contractually linked instruments and they introduce additional disclosures for financial assets and liabilities with contractual terms that reference a contingent event, and equity instruments classified at fair value through other comprehensive income. The new requirements will be applied retrospectively. An entity is required to disclose information about financial assets that change their measurement category due to the standard amendments.
The following standard has been issued by the IASB and will be effective as of October 1, 2027 for the Company, with earlier application permitted. The Company is in the process of evaluating the impact of this standard on its interim condensed consolidated financial statements.
IFRS 18 - Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements which is set to replace IAS 1 Presentation of Financial Statements. The new IFRS accounting standard is aimed to improve comparability and transparency of communication in financial statements. While a number of sections from IAS 1 have been brought forward to IFRS 18, the standard introduces new requirements on presentation within the statement of profit or loss, including specified totals and subtotals. It also requires disclosure of management-defined financial performance measures used in public communications outside financial statements and includes new requirements for aggregation and disaggregation of financial information based on the identified roles of the primary financial statements and the notes. Retrospective application is required in both annual and interim financial statements.
CGI Inc. – Interim Condensed Consolidated Financial Statements for the three months ended December 31, 2025 and 2024 6
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended December 31, 2025 and 2024 (tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)
4. Accumulated other comprehensive income
As at December 31, 2025
As at September 30, 2025
$
$
Items that will be reclassified subsequently to net earnings:
Net unrealized gains on translating financial statements of foreign operations, net of accumulated income tax expense of $59,088 ($59,141 as at September 30, 2025)
1,398,730
1,588,980
Net losses on cross-currency swaps and on translating long-term debt designated as hedges of net investments in foreign operations, net of accumulated income tax recovery of $53,291 ($46,173 as at September 30, 2025)
(500,281)
(542,309)
Deferred gains of hedging on cross-currency swaps, net of accumulated income tax expense of $2,079 ($2,538 as at September 30, 2025)
14,512
17,130
Net unrealized losses on cash flow hedges, net of accumulated income tax recovery of $12,798 ($10,042 as at September 30, 2025)
(42,867)
(34,359)
Net unrealized gains on financial assets at fair value through other comprehensive income, net of accumulated income tax expense of $1,021 ($1,361 as at September 30, 2025)
3,394
4,328
Items that will not be reclassified subsequently to net earnings:
Net remeasurement losses on defined benefit plans, net of accumulated income tax recovery of $11,104 ($11,755 as at September 30, 2025)
(30,682)
(31,426)
842,806
1,002,344
For the three months ended December 31, 2025, $470,000 of the net unrealized losses on cash flow hedges, net of income tax recovery of $74,000, previously recognized in other comprehensive income were reclassified in the consolidated statements of earnings ($2,838,000 of the net unrealized gains on cash flow hedges, net of income tax expense of $940,000, were reclassified for the three months ended December 31, 2024).
For the three months ended December 31, 2025, $2,898,000 of the deferred gains of hedging on cross-currency swaps, net of income tax expense of $443,000, were also reclassified in the consolidated statements of earnings ($3,274,000 net of income tax expense of $500,000, were reclassified for the three months ended December 31, 2024).
5. Capital stock, share-based payments and earnings per share
a)Capital stock and share-based payments
Class A subordinate voting shares
Class B shares (multiple voting)
Total
Number
Carrying value
Number
Carrying value
Number
Carrying value
$
$
$
As at September 30, 2025
195,939,991
1,466,264
24,122,758
33,653
220,062,749
1,499,917
Release of Class A subordinate voting
shares held in trusts
—
35,390
—
—
—
35,390
Purchased and held in trusts
—
(19,163)
—
—
—
(19,163)
Issued upon exercise of stock options
216,747
17,882
—
—
216,747
17,882
Purchased and cancelled
(4,576,353)
(40,046)
—
—
(4,576,353)
(40,046)
Purchased and not cancelled
—
(700)
—
—
—
(700)
As at December 31, 2025
191,580,385
1,459,627
24,122,758
33,653
215,703,143
1,493,280
CGI Inc. – Interim Condensed Consolidated Financial Statements for the three months ended December 31, 2025 and 2024 7
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended December 31, 2025 and 2024 (tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)
5. Capital stock, share-based payments and earnings per share (continued)
a)Capital stock and share-based payments (continued)
i)Performance share units and shares held in trusts
During the three months ended December 31, 2025, 875,195 performance share units (PSUs) were granted, 491,080 were settled and 168,672 were forfeited (667,657 were granted, 490,693 were settled and 352,142 were forfeited during the three months ended December 31, 2024). The PSUs granted in the period had a weighted average grant date fair value of $125.13 per unit ($159.41 per unit during the three months ended December 31, 2024).
During the three months ended December 31, 2025, 347,261 Class A subordinate voting shares held in trust were released (296,765 during the three months ended December 31, 2024) with a recorded value of $35,390,000 ($31,621,000 during the three months ended December 31, 2024) that was removed from contributed surplus.
During the three months ended December 31, 2025, the Company remitted $17,486,000 in cash to tax authorities on behalf of employees, representing withholding taxes deducted from employees under the Share Unit Plan ($30,159,000 during the three months ended December 31, 2024).
During the three months ended December 31, 2025, the trustees, in accordance with the terms of the Share Unit Plan and Trust Agreements, purchased 153,783 Class A subordinate voting shares of the Company on the open market (84,456 during the three months ended December 31, 2024) for a total cash consideration of $19,163,000 ($13,323,000 during the three months ended December 31, 2024).
As at December 31, 2025, 2,053,876 Class A subordinate voting shares were held in trusts under the Share Unit Plan (2,389,047 as at December 31, 2024 and 2,247,354 as at September 30, 2025).
ii)Exercises of stock options
During the three months ended December 31, 2025, 216,747 stock options were exercised and nil were forfeited (233,682 were exercised and nil were forfeited during the three months ended December 31, 2024).
The carrying value of Class A subordinate voting shares includes $2,965,000 which corresponds to a reduction in contributed surplus representing the value of accumulated compensation costs associated with the stock options exercised during the three months ended December 31, 2025 ($3,179,000 during the three months ended December 31, 2024).
iii)Shares purchased and cancelled
On January 27, 2026, the Company’s Board of Directors authorized, subject to regulatory approval from the Toronto Stock Exchange (TSX), the renewal of its Normal Course Issuer Bid (NCIB), which allows for the purchase for cancellation of up to 18,975,360 Class A subordinate voting shares on the open market through the TSX, the New York Stock Exchange (NYSE) and/or alternative trading systems or otherwise pursuant to exemption orders issued by securities regulators. The Class A subordinate voting shares will be available for purchase for cancellation commencing on February 6, 2026, until no later than February 5, 2027, or on such earlier date when the Company has either acquired the maximum number of Class A subordinate voting shares allowable under the NCIB or elects to terminate the bid.
During the three months ended December 31, 2025, the Company purchased for cancellation 4,574,753 Class A subordinate voting shares under its current NCIB for a total cash consideration of $566,887,000 and the excess of the purchase price over the carrying value in the amount of $526,141,000 was charged to retained earnings.
Of the purchased Class A subordinate voting shares, 78,700 Class A subordinate voting shares with a carrying value of $701,000 and a purchase value of $9,994,000 were neither paid or cancelled as at December 31, 2025. Furthermore, during the three months ended December 31, 2025, the Company paid for and cancelled 80,300 Class A subordinate voting shares under its current NCIB, with a carrying value of $708,000 and for a total cash consideration of $9,935,000, which were purchased but were neither paid nor cancelled as at September 30, 2025.
During the three months ended December 31, 2025, the Company recorded $10,804,000 related to a 2.0% tax on the value of Class A subordinate voting shares repurchased, net of the value of new equity issued through stock options exercised, as part of accrued liabilities and with a corresponding reduction in retained earnings ($2,129,000 during the three months ended December 31, 2024). In addition, during the three months ended December 31, 2025, the Company paid $9,785,000 in relation to such tax ($13,565,000 during the three months ended December 31, 2024).
CGI Inc. – Interim Condensed Consolidated Financial Statements for the three months ended December 31, 2025 and 2024 8
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended December 31, 2025 and 2024 (tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)
5. Capital stock, share-based payments and earnings per share (continued)
a)Capital stock and share-based payments (continued)
iv) Dividends
During the three months ended December 31, 2025, the Company declared and paid the following quarterly cash dividend to holders of Class A subordinate voting shares and Class B shares (multiple voting):
2025
2024
Dividend Payment Month
Dividend per Share
Value
Dividend per Share
Value
$
$
December
0.17
37,000
0.15
34,133
37,000
34,133
On January 27, 2026, the Company’s Board of Directors approved a quarterly cash dividend for holders of Class A subordinate voting shares and Class B shares (multiple voting) of $0.17 per share. This dividend is payable on March 20, 2026 to shareholders of record as of the close of business on February 18, 2026.
b) Earnings per share
The following table sets forth the computation of basic and diluted earnings per share for the three months ended December 31:
2025
2024
Net earnings
Weighted average number of shares outstanding1
Earnings per share
Net earnings
Weighted average
number of shares outstanding1
Earnings per share
$
$
$
$
Basic
441,996
215,952,333
2.05
438,580
225,191,270
1.95
Net effect of dilutive stock
options and PSUs2
1,711,738
3,050,206
Diluted
441,996
217,664,071
2.03
438,580
228,241,476
1.92
1 During the three months ended December 31, 2025, 4,574,753 Class A subordinate voting shares purchased for cancellation and 2,053,876 Class A subordinate voting shares held in trust were excluded from the calculation of the weighted average number of shares outstanding as of the date of transaction (927,599 and 2,389,047, respectively during the three months ended December 31, 2024).
2 For the three months ended December 31, 2025 and 2024, no stock options were excluded from the calculation of the diluted earnings per share as all stock options were dilutive.
6. Restructuring, acquisition and related integration costs
Three months ended December 31
2025
2024
$
$
Restructuring
—
8,300
Acquisition and related integration costs
26,245
5,064
26,245
13,364
During the three months ended December 31, 2024, the Company initiated a restructuring program which was targeted within its Continental European operations to realign its cost structure with current market conditions. As at September 30, 2025, the Company completed its restructuring program for a total cost of $196,796,000. During the three months ended December 31, 2024, the Company recorded costs for terminations of employment of $8,300,000 under this initiative.
CGI Inc. – Interim Condensed Consolidated Financial Statements for the three months ended December 31, 2025 and 2024 9
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended December 31, 2025 and 2024 (tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)
6. Restructuring, acquisition and related integration costs (continued)
During the three months ended December 31, 2025, the Company incurred $26,245,000, of acquisition and related integration costs ($5,064,000 for the three months ended December 31, 2024). These costs were related to redundancy of employment of $20,068,000 ($1,019,000 during the three months ended December 31, 2024), integration costs towards the CGI operating model of $5,012,000 ($1,356,000 during the three months ended December 31, 2024), legal and professional fees of $1,019,000 ($1,488,000 during the three months ended December 31, 2024), as well as costs of vacating leased premises of $146,000 ($1,201,000 during the three months ended December 31, 2024).
7. Net finance costs
Three months ended December 31
2025
2024
$
$
Interest on long-term debt
23,949
14,909
Interest on lease liabilities
8,119
7,094
Net interest costs on net defined benefit pension plans
633
1,621
Other finance costs
—
86
Finance costs
32,701
23,710
Finance income
(3,625)
(17,098)
29,076
6,612
8. Investments in subsidiaries
a) Acquisitions and disposals
The Company made the following acquisitions during the three months ended December 31, 2025:
–On December 2, 2025, the Company acquired all of the issued and outstanding shares of Online Business Systems (OBS), an IT consulting firm, based in Canada with operations in the U.S. More than 350 professionals joined CGI from OBS. The acquisition is reported under the Canada and U.S. Commercial and State Government operating segments.
–On December 22, 2025, the Company acquired all of the issued and outstanding shares Comarch Polska SA (Comarch Polska), a subsidiary of Comarch SA, specializing in IT solutions, based in Poland. More than 460 professionals joined CGI from Comarch Polska. The acquisition is reported under the Finland, Poland and Baltics operating segment.
These acquisitions were made to further expand CGI's footprint in their respective regions and to complement CGI's proximity model.
The purchase prices for the above acquisitions are mainly allocated to goodwill, which is not deductible for tax purposes, and mostly represents the future economic value associated with acquired work force and synergies with the Company’s operations. The estimated fair value of all assets acquired and liabilities assumed for these acquisitions is preliminary and will be completed as soon as management will have gathered all the significant information available and considered necessary in order to finalize this allocation.
There were no material disposals for the three months ended December 31, 2025.
b) Business acquisitions realized in the prior fiscal year
During the three months ended December 31, 2025, the Company finalized the fair value assessment of assets acquired and liabilities assumed for Daugherty Systems, Inc. with no adjustment.
During the three months ended December 31, 2025, the Company paid $4,525,000 related to acquisitions realized in the prior fiscal year.
CGI Inc. – Interim Condensed Consolidated Financial Statements for the three months ended December 31, 2025 and 2024 10
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended December 31, 2025 and 2024 (tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)
9. Supplementary cash flow information
a) Net change in non-cash working capital items and others is as follows for the three months ended December 31:
2025
2024
$
$
Accounts receivable
88,422
7,969
Work in progress
178,319
99,135
Prepaid expenses and other assets
12,676
32,166
Long-term financial assets
(5,809)
(2,945)
Accounts payable and accrued liabilities
(6,165)
(79,999)
Accrued compensation and employee-related liabilities
(98,927)
(69,139)
Deferred revenue
56,288
19,902
Income taxes
15,714
22,237
Provisions
(16,700)
(347)
Long-term liabilities
13,620
20,442
Derivative financial instruments
(36)
(16)
Retirement benefits obligations
3,532
(1,820)
240,934
47,585
b) Interest paid and received and income taxes paid are classified within operating activities and are as follows for the three months ended December 31:
2025
2024
$
$
Interest paid
10,902
7,780
Interest received
5,690
17,249
Income taxes paid
98,406
108,054
c) Cash and cash equivalents consisted of unrestricted cash as at December 31, 2025 and September 30, 2025.
CGI Inc. – Interim Condensed Consolidated Financial Statements for the three months ended December 31, 2025 and 2024 11
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended December 31, 2025 and 2024 (tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)
10. Segmented information
The following tables present information on the Company's operations which are managed through the following nine operating segments: Western and Southern Europe (primarily France, Portugal and Spain); United States (U.S.) Commercial and State Government; United Kingdom (U.K.) and Australia; Canada; U.S. Federal; Scandinavia, Northwest and Central-East Europe (primarily Sweden, Netherlands, Norway, Denmark and Czech Republic); Finland, Poland and Baltics; Germany; and Asia Pacific Global Delivery Centers of Excellence (mainly India and Philippines) (Asia Pacific).
Effective October 1, 2025, the Company realigned its management structure, resulting in the transfer of its Luxembourg operations from the Western and Southern Europe operating segment to the Scandinavia, Northwest, and Central-East Europe operating segment.
The operating segments reflect the revised management structure and the way that the Chief Operating Decision-Maker (CODM), who is the President and Chief Executive Officer of the Company, evaluates the business. The Company has restated the segmented information for the comparative period to conform to the new segmented information structure.
For the three months ended December 31, 2025
Western and Southern Europe
U.S. Commercial and State Government
U.K. and Australia
Canada
U.S. Federal
Scandinavia, Northwest and Central-East Europe
Finland, Poland and Baltics
Germany
Asia Pacific
Eliminations
Total
$
$
$
$
$
$
$
$
$
$
$
Segment revenue
763,883
605,851
551,209
508,911
494,931
469,611
239,173
227,390
250,918
(33,522)
4,078,355
Segment earnings before
restructuring, acquisition and
related integration costs, net
finance costs and income tax
expense
107,938
81,289
88,018
121,768
58,059
64,693
36,526
25,379
71,443
—
655,113
Restructuring, acquisition and
related integration costs
(Note 6)
(26,245)
Net finance costs (Note 7)
(29,076)
Earnings before income
taxes
599,792
Additional information:
Salaries, other employee
costs and contracted labour
costs
592,419
438,028
366,729
301,141
377,425
313,578
155,080
173,125
156,768
—
2,874,293
Amortization and depreciation
23,452
25,412
17,788
17,108
11,457
22,676
9,925
11,289
9,393
—
148,500
For the three months ended December 31, 2024
Western and Southern Europe
U.S. Commercial and State Government
U.K. and Australia
Canada
U.S. Federal
Scandinavia, Northwest and Central-East Europe
Finland, Poland and Baltics
Germany
Asia Pacific
Eliminations
Total
$
$
$
$
$
$
$
$
$
$
$
Segment revenue
645,218
578,233
406,186
528,646
566,040
415,093
224,062
213,972
248,717
(40,922)
3,785,245
Segment earnings before
restructuring, acquisition and
related integration costs, net
finance costs and income tax
expense
83,000
78,001
66,956
127,231
73,233
47,960
29,091
25,439
80,811
—
611,722
Restructuring, acquisition and
related integration costs
(Note 6)
(13,364)
Net finance costs (Note 7)
(6,612)
Earnings before income
taxes
591,746
Additional information:
Salaries, other employee
costs and contracted labour
costs
506,641
420,320
259,941
309,342
419,752
290,366
147,862
164,385
148,250
—
2,666,859
Amortization and depreciation
18,440
25,900
10,448
16,581
21,115
20,628
9,574
9,817
7,749
—
140,252
CGI Inc. – Interim Condensed Consolidated Financial Statements for the three months ended December 31, 2025 and 2024 12
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended December 31, 2025 and 2024 (tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)
10. Segmented information (continued)
The accounting policies of each operating segment are the same as those described in Note 3, Summary of material accounting policies, of the Company’s consolidated financial statements for the years ended September 30, 2025 and 2024. Intersegment revenue is priced as if the revenue was from third parties.
GEOGRAPHIC INFORMATION
The following table provides external revenue information based on the client’s location which is different from the revenue presented under operating segments, due to the intersegment revenue, for the three months ended December 31:
2025
2024
$
$
Western and Southern Europe
France
665,931
560,322
Portugal
34,740
32,157
Spain
33,386
31,692
Others
13,137
8,318
747,194
632,489
U.S.1
1,176,494
1,211,767
U.K. and Australia
U.K.
579,077
437,832
Australia
19,680
20,808
598,757
458,640
Canada
566,547
578,856
Scandinavia, Northwest and Central-East Europe
Sweden
203,689
172,697
Netherlands
176,295
165,832
Norway
28,422
27,083
Denmark
25,823
23,059
Czech Republic
23,508
18,583
Others
28,353
25,085
486,090
432,339
Finland, Poland and Baltics
Finland
229,678
220,950
Others
22,909
18,252
252,587
239,202
Germany
249,836
230,719
Asia Pacific
Others
850
1,233
850
1,233
4,078,355
3,785,245
1 External revenue included in the U.S Commercial and State Government and U.S. Federal operating segments was $681,371,000 and $495,123,000, respectively, for the three months ended December 31, 2025 ($644,075,000 and $567,692,000, respectively, for the three months ended December 31, 2024).
CGI Inc. – Interim Condensed Consolidated Financial Statements for the three months ended December 31, 2025 and 2024 13
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended December 31, 2025 and 2024 (tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)
10. Segmented information (continued)
INFORMATION ABOUT SERVICES
The following table provides revenue information based on services provided by the Company for the three months ended December 31:
2025
2024
$
$
Managed IT and business process services
2,214,713
2,166,306
Business and strategic IT consulting and systems integration services
1,863,642
1,618,939
4,078,355
3,785,245
MAJOR CLIENT INFORMATION
Contracts with the U.S. federal government and its various agencies, included within the U.S. Federal operating segment, accounted for $494,277,000 and 12.1% of revenues for the three months ended December 31, 2025 ($564,957,000 and 14.9% for the three months ended December 31, 2024).
11. Financial instruments
All financial instruments are initially measured at their fair value and are subsequently classified either at amortized cost, at fair value through earnings (FVTE) or at fair value through other comprehensive income (FVOCI).
There were no changes in valuation techniques used for fair value measurements during the three months ended December 31, 2025.
The following table presents the financial liabilities included in the long-term debt measured at amortized cost categorized using the fair value hierarchy.
As at December 31, 2025
As at September 30, 2025
Level
Carrying amount
Fair value
Carrying amount
Fair value
$
$
$
$
2021 U.S. Senior Notes
Level 2
1,365,613
1,297,670
1,386,564
1,310,044
2021 CAD Senior Notes
Level 2
598,080
580,084
597,892
580,561
2024 CAD Senior Notes
Level 2
747,244
762,347
747,001
766,844
2025 U.S. Senior Notes
Level 2
881,132
915,760
894,509
930,366
Other long-term debt
Level 2
1,190
1,209
11,869
11,892
3,593,259
3,557,070
3,637,835
3,599,707
For the remaining financial assets and liabilities measured at amortized cost, the carrying values approximate the fair values of the financial instruments given their short-term maturity.
On December 18, 2025, the Company launched an offer to exchange all of its outstanding U.S. $650,000,000 in aggregate principal amount of senior unsecured notes, originally issued on March 14, 2025, for an equivalent amount of notes registered with the U.S. Securities and Exchange Commission. The exchange offer was completed on January 26, 2026.
CGI Inc. – Interim Condensed Consolidated Financial Statements for the three months ended December 31, 2025 and 2024 14
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended December 31, 2025 and 2024 (tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)
11. Financial instruments (continued)
The following table presents financial assets and liabilities measured at fair value categorized using the fair value hierarchy:
Level
As at December 31, 2025
As at September 30, 2025
$
$
Financial assets
FVTE
Cash and cash equivalents
Level 2
836,369
864,209
Cash included in funds held for clients
Level 2
512,585
704,503
Deferred compensation plan assets
Level 1
129,161
125,388
1,478,115
1,694,100
Derivative financial instruments designated as hedging instruments
Current derivative financial instruments included in current financial assets
Level 2
Cross-currency swaps
32
1,011
Foreign currency forward contracts
454
1,481
Long-term derivative financial instruments
Level 2
Cross-currency swaps
185
395
Foreign currency forward contracts
782
459
1,453
3,346
FVOCI
Short-term investments included in current financial assets
Level 2
4,732
3,675
Long-term bonds included in funds held for clients
Level 2
246,635
240,932
Long-term investments
Level 2
26,755
27,687
278,122
272,294
Financial liabilities
Derivative financial instruments designated as hedging instruments
Current derivative financial instruments
Level 2
Cross-currency swaps
3,362
3,036
Foreign currency forward contracts
27,695
21,586
Long-term derivative financial instruments
Level 2
Cross-currency swaps
132,834
136,155
Foreign currency forward contracts
46,330
36,950
210,221
197,727
There have been no transfers between Level 1 and Level 2 during the three months ended December 31, 2025.
CGI Inc. – Interim Condensed Consolidated Financial Statements for the three months ended December 31, 2025 and 2024 15