FAIRFAX, Va. - CGI Federal Inc., a subsidiary of CGI Inc. (NYSE: GIB) (TSX: GIB.A), announced on Wednesday two significant contract awards from the U.S. Patent and Trademark Office (USPTO) totaling approximately $119 million. These contracts are aimed at providing operational, maintenance, and security services to support the USPTO's global innovation community.
The first contract, an $84 million Blanket Purchase Agreement (BPA) spanning five years, tasks CGI with delivering secure financial management services through Momentum®, the company's financial management software tailored for federal agencies. This contract marks USPTO's inaugural use of the U.S. Department of Treasury's Financial Management Quality Service Management Office shared services marketplace for the Momentum IP solution.
Alisa Bearfield, CGI Senior Vice President, highlighted the software's role in supporting USPTO's clean audits and the collection of over $4 billion in annual fee revenue, emphasizing CGI's contribution to both technical and financial operations.
The second contract, a $36 million task order under CGI's Alliant 2 Indefinite-Delivery, Indefinite Quantity (IDIQ) contract, also spans five years. CGI will focus on modernizing the USPTO's Certified Copy Center (CCC) and Assignment Center (CC&A) products using cloud technology. This modernization is expected to enhance the efficiency, user-friendliness, and security of systems that manage certified copies and ownership transfers of patent and trademark documents.
Stephanie Mango, CGI President for the U.S. Federal Market, stated that these awards reinforce CGI's reputation as a reliable solutions provider, contributing to USPTO's digital transformation and the retirement of legacy systems.
CGI Federal Inc. is known for its solutions across various federal agency missions, while CGI Inc. is recognized as one of the largest independent IT and business consulting services firms globally. CGI Inc. reported CA$14.30 billion in revenue for Fiscal 2023 and is listed on both the NYSE and TSX.
The press release also contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from expectations. These include market conditions, competition, and other risks detailed in CGI Inc.'s public filings.
The contracts are expected to drive operational efficiency at the USPTO and support CGI's growth in the federal services market. This information is based on a press release statement from CGI Federal, Inc.
In other recent news, CGI Group (NYSE:GIB) Inc. reported a year-over-year revenue growth of 1.3%, reaching $3.7 billion, with a notable performance in the government sector and intellectual property (IP) services. The company's bookings were strong at $4.3 billion, indicating a healthy book-to-bill ratio of 117%. Additionally, the company announced the initiation of a quarterly dividend of 15 cents per share, set to commence in the first quarter of fiscal year 2025. Canaccord Genuity maintained a positive outlook on CGI Group shares, raising the price target to C$170 from the previous C$155. The company reported robust EBIT margins of 16.4%, indicating potential for consistent margin expansion, attributed to the growth in managed services and the increasing proportion of intellectual property in revenue streams. CGI Group also announced strategic acquisitions and the integration of generative AI into its offerings. These recent developments reflect CGI Group's commitment to its shareholders and its momentum in the IT services landscape.
InvestingPro Insights
CGI Inc. (NYSE: GIB) has recently demonstrated strong financial metrics and strategic activities that are worth noting. With a market capitalization of $25.07 billion, the company's stability is underpinned by a perfect Piotroski Score of 9, indicating a healthy financial state. Additionally, CGI Inc. has been proactive in enhancing shareholder value, evidenced by management's aggressive share buyback strategy.
From a valuation standpoint, CGI Inc. trades at a P/E ratio of 20.6, which is slightly elevated when considering near-term earnings growth. However, the company's prominence as a key player in the IT Services industry and its ability to maintain profitability over the last twelve months, as confirmed by its latest earnings per share (EPS) of $5.23, are factors that investors typically weigh alongside valuation metrics.
InvestingPro Tips also highlight that CGI Inc. operates with a moderate level of debt and its cash flows can sufficiently cover interest payments, providing a measure of financial resilience. It's also worth mentioning that analysts predict the company will remain profitable this year, which aligns with CGI's recent contract wins.
For those seeking additional insights, there are more InvestingPro Tips available that could provide a deeper understanding of CGI Inc.'s financial health and market position. These tips can be accessed through the dedicated InvestingPro product page for CGI Inc. at https://www.investing.com/pro/GIB, where users can find an array of tips to guide their investment decisions.
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