Robert Young: Okay. And just last one for me is I think you said that large project awards were bigger-than-normal contribution to SI&C bookings? And what is that what exactly does that mean? Is that a long-term composition change or maybe just unpack that. And then, I’ll pass the line.
George Schindler: Yeah. It’s more just a phenomenon in the quarter. And I mentioned it, because it did drive kind of a change. When you look at our managed services bookings were down versus what I’m talking about in the pipeline and the sentiment. And it just was a function of some higher concentration of SI&C bookings that were large essentially what I would call recurring T&M project renewals. So, they show up in the SI&C but they’re really large project T&M recurring revenue. And then we had some timing delays on several larger managed services deals that I mentioned. So, I think it’s more of a phenomenon just a quarter. It’s why we always look at bookings on a trailing 12-month basis why I highlighted the strong trailing 12-month bookings in managed services is just a function of where we are right now.
Robert Young: Okay. Thanks.
George Schindler: Yes.
Operator: Your next question comes from Jerome Dubreuil with Desjardin. Your line is now open.
Jerome Dubreuil: Hi, thanks for taking my questions. Trying to reconcile what we are hearing from some other companies in the ecosystem. We heard from Microsoft just last week that they are boosting their Azure CapEx as a result of strong demand not exactly what we’re seeing in IT services. Do you think there’s a chance that maybe enterprises are directing a bigger portion of their budget through maybe the data center cloud power that you might not benefit as much from right now but that may eventually come back to boost demand?
George Schindler: I think it’s a good question. I do think that some of what we see our clients doing is preparing for the future. And so they’re back to setting up their data strategies their architectures and ultimately their infrastructure to allow for that next wave of digital spending. So, maybe in this case we’re on the tail end of that. I think you saw that even on the slowdown on the other direction. So, I think that’s what we’re seeing. So, time will tell. Like I said we’re not seeing anything uniform or consistent yet. But I think that’s it matches some of the sentiment you hear from you heard from me on our Voice of the Clients’ feedback that we just–
Jerome Dubreuil: Great. Second question for me. You provided at the beginning of the year guidance in terms of double-digit EPS growth, not that consensus is there right now, but can we agree that double-digit EPS growth would be at the higher end of your updated expectations?
George Schindler: Yes. Well, obviously, we don’t give guidance, but double-digit EPS accretion does remain a target for us. We do have the tailwind on the cost optimization improved business mix. But I think what we’re looking for is some return to improvement in the market conditions which would then allow us to see that be able to reach that.
Jerome Dubreuil: Great. And then last for me maybe one for Steve. Can you remind us of the CAD-USD impact in terms of your reporting? Obviously, offsets because of the costs that are in USD as well. But maybe a bit of a tailwind in the coming quarters with the weaker Canadian currency?
Steve Perron: Yes, in the next quarter because if you look at it last quarter in fact the U.S. dollar versus the previous year it was not positive. But currently yes, with the current exchange rate, you would see a positive sign coming from the FX in Q3.
Jerome Dubreuil: Great. Thank you.
Operator: next question comes from Thanos Moschopoulos with BMO Capital Markets. Your line is now open.
Thanos Moschopoulos: Hi, good morning.
George Schindler: Hi Thanos.
Thanos Moschopoulos: Hey George. You referenced the growth in IP, maybe just to clarify what’s driving that? Is a lot of that weighted to government given where we are in the cycle or is it from some other sectors as well?
George Schindler: Yes, Thanos, you hit that one right. There certainly is highest growth was in government, both in North America, but increasingly in Europe. We had some nice growth in Europe as well both in the bookings and the revenue operations focused. That’s where a lot of our IP plays. So, HR payroll, secure data, document handling, data intelligence solutions. We also had some growth in banking as well Trade360 Wealth360. So, — but I think really more focused on those operational systems just given where we are. So, that’s what’s continuing to generate the growth.
Thanos Moschopoulos: Great. And it seems like your R&D investments on IP is up a good amount year-over-year. Is a lot of that focused on AI or other areas of investments as well?
George Schindler: Yes. Well, we actually had a 30-plus percent increase in the CGI funded investments to enable IP within our AI. So, everything from momentum to the customer advance and other elements. And again just to remind you, some of that is just a reallocation reprioritization of the spend as we go through that. But yes, AI is — will continue to be a driver as I mentioned.
Thanos Moschopoulos: Great. I’ll pass it on, Thanks, George.
Operator: Your next question comes from Divya Goyal with Scotiabank. Your line is now open.
Q – Divya Goyal: Good morning, everyone. Hey, George, I actually wanted to get a little bit more color on this H2 optimization. I know when — at the time of the last quarter, we were talking about it. It looked like there could be more upside coming out of H2. But considering where the rate environment is right now, do you think it’s fair to build in any sizable optimization whatsoever or should we expect a flattish growth for this — remaining quarters ahead?
George Schindler: Yes. Well, as you know Divya, we don’t give guidance, but just again, what I see I just don’t see the clarity right now. The pipeline looks strong. The interest is there. We’re getting in front of our clients, which is extremely important but — and there are green shoots. It’s just they’re not very consistent even across industries or geographies. So right now, I can’t really call that. Maybe it shifts to the second half of the calendar year versus our fiscal year, I don’t know. But that’s what I see right now. I’m just sharing. That’s why I share the metrics that we have, where the pipeline is, where the bookings are. And then of course, what we’re hearing on the Voice of the Client so — which is positive on a go-forward basis. I just don’t know, when some of that’s going to show up.
