Q – Divya Goyal: Yes. No, that’s a fair comment. And I wanted to get a little bit — I know you talked about the margin sustainability and you gave some commentary here on margins. What is a fair run rate for margins, now that the cost optimization program is predominantly behind us.
George Schindler: Steve?
Steve Perron: Look from — it’s a good question. But ultimately, as George mentioned, yes, we will have an uptick in the margin, with the cost optimization probably not to the level that you saw this quarter, because as George mentioned, we continue to invest. We want to invest in AI. We want to train our folks. And so we are spending at the right place, to continue to ultimately grow the EPS. That’s the ultimate goal, but something like 20 bps would make sense.
Q – Divya Goyal: Yes, no. That’s, helpful. One question on the BFSI weakness. So George, you did mention that the BFSI segment saw some weakness. We have been hearing commentary from some of the global banks indicating increased investments in IT, are you seeing that show up in your bookings given the stronger SI&C bookings? Are you seeing more momentum on the AI side or is it broadly digital core modernization where you see more of that spend coming out?
George Schindler: We’re still seeing a lot more in the digital and general modernization projects. That’s what we’re seeing. Again, we’re seeing some elements of kind of some of that spending, but it’s still early days. And so I’d say, more it’s on the modernization. I think people are still setting up for what that next wave of digital spending is going to be.
Q – Divya Goyal: That’s helpful. And my very last question here is, considering where the stock price is today as compared to where it was a few weeks ago. Do you think there are any plans to expedite the share buyback.
George Schindler: Yes. Well, as we’ve always discussed, our capital allocation priorities don’t change. So investing in the business is number one; accretive acquisitions is, number two. But to the extent that we have the capital available and I believe we do Steve, yes, we would be looking to return that through share buybacks. And we don’t base it primarily on price, because we’re basing on where we’re going as a company. But certainly, we’ll be — you should expect us to continue to be aggressive on all fronts.
Q – Divya Goyal: That’s very helpful. Thank you.
Operator: Your next question comes from Stephanie Price with CIBC. Your line is now open.
Stephanie Price: Hi, good morning.
George Schindler: Hi, Stephanie.
Stephanie Price: Hey. I was wondering if you could comment on bookings converting into revenue. I think you made a comment to an earlier question just talking about slow project start-ups. What are you seeing in terms of that managed services pipeline converting over?
George Schindler: Yeah. Well we are seeing a lot of decent growth. If you look at some of the geographies and some of the industries where we’re seeing growth, a lot of that is now being driven by the managed services. It’s just being offset by some of that slower SI&C spending. And as that returns, I think it’s going to be an accelerator because we are starting to see good growth on the managed services side.
Stephanie Price: Okay. Great. And then just in terms of IP revenue there was a comment that 60% of IP is now SaaS based. Curious, if you could talk a little bit about the evolution of those IP solutions. I know a lot of them might have been considered mature or you’ve had them for a long time interesting that they are not SaaS-based?
George Schindler: Yeah, yeah. No, I think there’s a bit of a resurgence from both the introducing some of the new technologies including AI into some of these operational intellectual property elements and then offering them as a Software-as-a-Service has given some of them a new life. And we’ve also spent some time combining some of our independent IPs and then offering that as a Software-as-a-Service that has increased opportunity and demand for the IP. So and we’ve been pretty rigorous of going through an architecture review and continuing to invest only in those IPs that we think do have that feature. And you’re seeing the results of it these last several quarters.
Stephanie Price: Great. Thank you very much.
Operator: Your next question comes from Suthan Sukumar with Stifel. Your line is now open.
Suthan Sukumar: Good morning, gents. First question I have is, I guess, on your partner ecosystem. I’ve been seeing more headlines in recent years about partnerships. Just curious on what role your partner ecosystem has been having on your business and in terms of driving client relationships and growth overall?
George Schindler: Yeah. No it’s a good question. They’re an important element and increasingly important element in the ecosystem and certainly for CGI. It’s why we elevated that whole process several years ago and that continues to pay dividends. You saw that the bookings from that network is up double digit in the quarter and will continue to play an important role. And we have a unique position with some of those partners in that we do have those 150-plus intellectual property solutions, which are attractive. They’re synergistic working together on those. So they’re not generic announcements. They’re very specific opportunities. Having said that, you’ve seen that we’ve made some of those announcements in the past you’ll expect to see more of those types of partnerships because I think they are an important part of the ecosystem. Now having said that it’s we’ll continue to be agnostic and work with our clients and what the right solution is for them.
Suthan Sukumar: Great. Thank you. Next question I guess is just more on capital allocation optionality. Just in terms of returning cash back to shareholders beyond the NCIB would a dividend ever be an option you would consider longer term?
George Schindler: Well, given where we are and what I just shared with you with the voice of the clients, the AI as a catalyst for growth, the opportunity that continues to be out there, M&A [ph] for position. That’s not the number one place that we would go to drive the accretion, we believe shareholders are looking for. And that’s we review it regularly with the Board. That’s the current thinking of the Board, but that were if that were to change we’d share it, but not right now.
