Tyler DuPont: Great. Thank you. I appreciate the color.
Operator: Thank you. Next question will be from Divya Goyal at Scotiabank. Please go ahead.
Divya Goyal: Good morning everyone. George, I wanted to get some color on the variance between Europe versus the North American growth that we’ve been seeing. And I know the peers have been commenting on it. We have an outlook on it. But it’s — I’m just curious, is that — is the variance because Europe is doing better than North America? Or is it because North America undertook those business transformations sooner than Europe did? And — it is because of that macroeconomic conditions that is driving this variance at this time?
George Schindler: Yes. I got to tell you, I mean we mentioned our growth was pretty balanced between the two. And in general, I see it less being about the geographies and far more being about the industries and the services that you’re offering. And of course, we talked about SI&C versus managed services and IP and even in IP, it depends on what solutions you’re offering in your business solutions, right? And then from an industry’s perspective, clearly, banking has been hit by this interest rise. And so that’s certainly pretty dominant factor, particularly in North America. So I think that’s where you might see some of that with some of the comparisons. But of course, given our strength in government and national critical infrastructure industries, including utilities, that’s strong in all geographies, both North America and Europe.
And so I think that’s why we have a little more of a balance. To your specific question, no, I don’t think it’s that necessarily one is ahead the other. I think and especially when you look at some of the newer technologies and the new opportunities, I think you’re going to see a little more of similarities than you see differences.
Divya Goyal: That’s helpful. Just from your M&A pipeline standpoint, you did mention that some of the government-led businesses are in the pipeline, do you see any alleviations to certain geographies as well, again, going back to this Europe versus North America growth trajectory that have been — that we’ve been noticing over the recent quarters.
George Schindler: Yes. What I would say is that we’re always looking in all locations as I meant to, as I mentioned already, to gradually grow in each of those metro markets. But certainly, the U.S., France, Germany and the U.K. are areas that if you look at our active funnel, they’re probably more opportunities in those areas. And like I said, both government and commercial in each of those geographies.
Divya Goyal: That’s helpful. And I’ll ask one last question here on the cash flow from operations. So over the past two quarters, the CFO has been trending higher than the historical norms here. And obviously, you’re undertaking now these cash optimization initiatives as well, could you help us understand the go-forward trajectory for the CFO?
George Schindler: Steve, you want to reply?
Steve Perron: Look, the cash flow, I would say the best thing is to look at it from a last 12-month point of view. That’s really how we look at it also internally. But obviously, when the margins are improving, the cash flow will improve. We are investing in the business right now and with the objective to improve, right, the future earnings and also future cash flows.
Divya Goyal: That’s helpful. Thanks George, thanks Steve.
Steve Perron: Thanks, Divya.
Operator: Next question will be from Robert Young at Canaccord Genuity. Please go ahead.
Robert Young: Hi, good morning. I wanted to put that $200 million in incremental bookings related to AI into context. It seems like a good number. Thanks for sharing that. But I think of that as a relative percentage of the SI&C bookings, that’s over 10%, if I just think of it as a percentage of the new bookings from new business. It’s a larger percent. And trying to put that into context with the comment you gave on an earlier question around how some of that is embedded into IP delivery. Like I’m trying to get a sense of how much of this is new business is completely driven by AI? And how much of it is embedded into other parts of existing delivery?
George Schindler: Yes, and thanks for the question. And you’re right, and you heard correctly. It’s not all brand new business it’s — some of that is embedded. Of course, it helps us continue to grow our relationship with our clients and be part of where the business is heading. And that’s why I highlighted that, but it’s — some of that is part of existing deals or would be part of existing deals. I don’t know if I’d say, roughly maybe 60% within deals, 40% new, but that’s just a rough estimate. We could go back and give you some of that. But again, given what we see lots of deals with AI, but not necessarily big large-scale implementations yet. We’re starting to see that, again, focused on the operations efficiencies, we’re starting to see that in some of the larger engagements that we have with the largest of customers, but most are still smaller point solutions proving this out.
Most of our clients are being very cautious, I think we would agree with them being very cautious in how they use this, how they keep humans in the loop and doing this in a modified way. That’s why I say it’s still the early days of this.
