Robert Young: Yes. Thanks there. Lot of color. That’s still great numbers. I’m curious if you could help me maybe summarize all the different drivers of margins that you’re looking at right now. Just based on the comments on the call, it sounds like the cost optimization maybe some utilization benefits, given there’s lower attrition and maybe slightly lower hiring the IP growth. Global Delivery still growing as a percentage, if I heard that right. Like are there any other pieces that you would highlight that would be supportive of margin expansion here in the near term?
George Schindler: That’s pretty good. It’s pretty good, Robert. If I think about it, I would say, for me, it would be managed services growth, particularly with the global delivery because you see the margins that drives. IP as a percentage of revenue, certainly, the cost optimization program for SG&A, including the real estate. One of the areas that maybe we didn’t talk about is continuous improvement in geographies. You saw Scandinavia improvement. We can see continued improvement there. That’s through a combination of SG&A revenue mix, but also growth. And then I did mention productivity from Generative AI. I think that’s — that will be a tailwind in the quarters to come as we leverage AI for our own operational efficiencies, including in leveraging it for some of our own IP development.
We’ve got — CGI has over 0.5 billion lines of code in our own ownership. And to the extent that we can turn AI lose on our own intellectual property, our own software. It’s not open to anybody else, we can maybe see some benefits there. So we’re looking at that as well. So all those are opportunities for us to continue to provide the incremental margin improvement as we continue to grow the business.
Robert Young: Alright. Thanks for taking the questions.
Operator: Thank you. Next question will be from Daniel Chan at TD Cowen. Please go ahead.
Daniel Chan: Hi, good morning. George, you mentioned interest rates may have affected the banking sector. Just wondering if there’s anything else to call out there that you think could be affecting it. And then as a follow-on, given the view that interest rates may decline later this year, do you think that would be a driver to growth back in that sector later this year?
George Schindler: Yes. I do think it’s a bit of wait and see. And I think just the uncertainty is what’s driving some of this. And so I think when there becomes a little more certainty of not if, but when that occurs, I do think you’ll see more loosening of those actions. Like I said, the interest is there, and what we’re doing is building the pipeline, making sure we’re part of the conversations, but I do think you’ll see some of that. In general, that’s the landscape that I see. It’s one, it’s really the interest rates, but it’s also dealing with the increase if you will, in regulatory elements. So there’s a lot of focus short term on making sure that the regulatory is dealt with. And I think that’s been a main focus, which kind of removes the focus from some of the other areas.
But I think you’ll see that loosening up like I said, I can’t call when, but I do think that — that’s on the rise. And you’re already seeing it stabilize. It’s not getting better yet, but it is…
Daniel Chan: That’s helpful. Thank you. And then you’ve been pretty optimistic on the M&A opportunities over the last couple of years. Anything to call out in the current environment that changes your level of optimism relative to last year?
George Schindler: No. Well, I would say it’s — I’m even more optimistic that there are opportunities. Of course, we’re going to continue have the focus that we have to make sure that we’re bringing the right companies in that can be that catalyst for growth that we talked about and provide the accretion to our shareholders. But I become more and more bullish on the opportunities just given kind of where the market is, where the valuations are and where we are as a company. You see our balance sheet. So — but we’re going to continue to be disciplined on that approach.
Daniel Chan: Great. Thanks George.
George Schindler: Yes.
Operator: Thank you. And at this time, Mr. Linder, we have no other questions. Please proceed.
Kevin Linder: Thank you, Sylvie, and thanks, everyone, for participating. As a reminder, a replay of the call will be available either via our website or by dialing 1-877-674-7070 and using the passcode 827836. As well, a podcast of this call will be available for download within a few hours. Follow-up questions can be directed to me at 1-905-973-8363. Thanks again, everyone, and look forward to speaking soon.
Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines. Enjoy the rest of your day.
