Chapter 4

Figures converted from Canadian dollars at historical FX rates — see data/company.json.fx_rates. Ratios, margins, and multiples are unitless and unchanged.

Order Book

CGI's order book is where the durability of its compounding is tested. Contracted backlog stands at $23.0 billion — about two years of revenue — and has grown every year since FY2021, with a book-to-bill ratio above 100% throughout [1]. The durability is narrower than the headline. A recurring managed-services base books at 117–122% of revenue, while consulting sits at or below 100% [2]. The main vulnerability is concentration: government is 38% of revenue, the U.S. federal government alone 14.1% [3].

The size and shape of the order book

Backlog is the single most useful number for judging whether CGI's revenue base is durable. At $23.0 billion against FY2025 revenue of $11.6 billion, the order book is roughly two times annual sales, and it has risen from $16.9 billion in FY2021 — a compound rate near 8% a year, slightly ahead of revenue [4] [5].

Source: FY2025 Annual Report, MD&A 2.1 Selected Yearly Information & Key Performance Measures [6].

Sources: FY2025 Annual Report, MD&A 2.1 (FY2023–FY2025) [7]; FY2023 Annual Report, MD&A 2.1 (FY2021–FY2022) [8].

The order book is also long-dated, which matters more than the size. CGI discloses when its backlog is expected to convert into revenue: about $8.8 billion within twelve months, $7.7 billion in one to three years, $3.4 billion in three to five years, and $3.2 billion beyond five years [9]. Roughly 62% of the book is contracted to convert after the next twelve months, and $6.6 billion — close to 30% — sits beyond three years. That is a revenue base with visibility few consulting-led peers can match.

Source: FY2025 Annual Report, MD&A 2.1 Selected Yearly Information & Key Performance Measures [10].

Two caveats belong next to that visibility. First, CGI's own definition of backlog includes commitments "acquired through business acquisitions" and management estimates of demand-driven usage, and it is reduced when clients cancel or scale back — so it is an estimate of contracted revenue, not a firm receivable [11]. Second, part of the backlog's growth was bought rather than won: acquired backlog enters the balance directly and does not pass through the bookings figure, as management confirmed on the FY2025 year-end call [12]. The consequence is useful: because bookings exclude acquired backlog, the book-to-bill ratio is a cleaner organic signal than the backlog balance, which — like reported revenue (Build and Buy) — is flattered by acquisitions.

Where the durability comes from

The book-to-bill ratio held above 100% in each of the last three years — 113.7%, 109.3% and 110.4% — meaning new bookings outpaced revenue burned, so the order book kept filling faster than it emptied [13]. That headline conceals two very different businesses underneath it.

Split by service line, the recurring half carries the order book. On a trailing-twelve-month basis, managed IT and business-process services booked at 117% of revenue in FY2024, 120% in FY2025 and 122% by the first quarter of FY2026. Consulting and systems integration booked at 100%, then 99%, then 96% over the same span [14] [15] [16]. In plain terms, the managed-services base is adding net new recurring revenue each year, while consulting is barely replacing what it delivers.

Source: Q4 FY2024, Q4 FY2025 and Q1 FY2026 earnings-call transcripts; 100% marks bookings equal to revenue [17] [18] [19].

This is the location of CGI's moat, and it is a specific one. Managed services is roughly 55% of revenue, and these are multi-year outsourcing engagements — running a client's systems, applications or business processes — with real switching costs: the incumbent holds the operational knowledge, the transition risk of moving is high, and CGI's local-delivery "proximity" model keeps decision-makers close to the client [20]. The retention shows in the composition of bookings: roughly 60% of the year's new bookings were extensions, renewals and add-ons rather than new business, with new business the remaining 40% [21]. A book weighted toward renewals is a book that clients keep choosing to re-sign.

That switching-cost base is also what makes the outcome-based pricing described in AI and the Labor Model credible: a client locked into a multi-year managed-services contract is buying an outcome, not hours, which is why CGI can keep AI-driven productivity gains as margin rather than passing them back as lower billings. The consulting and systems-integration half, by contrast, has neither the switching costs nor the recurring revenue — its sub-100% book-to-bill is the discretionary, cyclical part of the story, and the softest link in the order book.

A pattern the sector leader shares

The shape of CGI's order book is not unique; it mirrors the industry's largest player, which is a useful check that the split is structural rather than a CGI quirk. In its most recent quarter Accenture booked new work at an overall 1.2 times revenue, with consulting at 1.0 and managed services at 1.4 [22]. The same division holds: managed services carries the order book, consulting merely holds its own.

Sources: CGI trailing-twelve-month figures, Q4 FY2025 call [23]; Accenture Q4 FY2025 call [24]. Accenture's figures are single-quarter bookings; CGI's are trailing twelve months, so levels are indicative rather than exactly comparable.

The comparison also frames a limit. CGI's total book-to-bill of 110% trails Accenture's 120%, and its managed-services 120% trails Accenture's 140%. CGI's order book is durable, but it compounds more slowly than the leader's — consistent with the organic-growth stall that opened this report. The moat protects the base; it does not, on this evidence, restore the pace of growth.

Where the order book is exposed

The clearest risk in the order book is concentration. Government is CGI's largest end-market at 38% of revenue, and under the accounting definition of a single customer, the U.S. federal government and its agencies alone were 14.1% of FY2025 revenue — up from 13.6% a year earlier [25]. Government work cuts both ways: it is sticky and defensive in a downturn, but it is exposed to budget cycles, procurement freezes and shutdowns in a way commercial work is not.

Source: FY2025 Annual Report, MD&A 3.3 Revenue Distribution [26].

That exposure is not theoretical. CGI's own risk disclosure names "government shutdowns or the threat of government shutdowns," curtailed use of consulting firms, and budget cuts as factors that could cause agencies to reduce, terminate or decline to renew contracts [27]. The U.S. federal segment is also the lumpiest part of the book: its full-year FY2025 book-to-bill was 92.5%, below replacement, even though the fourth quarter spiked to 185% on contract timing [28]. By the first quarter of FY2026 management confirmed U.S. operations had been hit by the federal shutdown, with a sequential recovery expected but the segment still "operating in a very dynamic environment" [29].

A second, quieter erosion sits inside the sticky base itself. Many managed-services contracts carry benchmarking provisions — clauses that let a client force pricing back toward market rates during the contract term. CGI flags that a downturn, by pushing competitors to cut rates, "may trigger pricing adjustments related to the benchmarking obligations within our contracts" [30]. Switching costs keep the client; they do not fully protect the price. A backlog that renews at lower margins is durable in revenue but not in profit.

What the order book says

On the evidence, CGI's moat is real but narrow. It rests on a recurring managed-services base that books at 117–122% of revenue, renews rather than churns, and gives two years of contracted visibility — a genuine switching-cost franchise, and the reason the outcome-based pricing model holds. It does not extend to the consulting and systems-integration half, whose sub-100% book-to-bill is the discretionary drag on the whole, nor does it neutralize a government concentration — 38% of revenue, 14.1% in one federal client — that is exposed to shutdowns and benchmarking repricing.

The read that fits the numbers: the order book is durable enough to defend the base but not to restore the pace of compounding, which keeps the burden on acquisitions (Acquisition Math) to supply growth. The single figure that would change it is the managed-services book-to-bill: as long as it holds above roughly 110%, the recurring engine is still net-adding; a sustained fall toward 100%, or a step-down in U.S. federal work, would signal the moat is eroding faster than consulting can recover.