George D. Schindler: Yes. What we see is government tends to be a bit countercyclical. So, when you go into times of periods of economic slowdown, what you see is governments get very active. They get active around policy initiatives to spur the economy to help the citizens, etcetera. And so, it’s a lot of activities around us helping government implement their policy initiatives which by the way always incorporate IT. And then, the more you get of those policy initiatives, quite frankly, it puts a more of a spotlight on kind of some of the modernization that has to happen, so that they can actually implement those quicker. And so, governments get more active on that front. And then finally, in general, governments do look to stimulate the economy.
And so, that’s what we’ve kind of see. We’re in a period of that. And that’s governments around the globe, at least in the geographies that we’re in, we’re seeing that strength in governments both in North America and across Europe.
Richard Tse: Okay. And then when you look at the existing base, it seems to be that it’s still contributing a fair amount of growth here. So, my guess is that some of these existing deals are expanding at a larger size or there’s sort of add-ons there. Are there any sort of commonalities to sort of that that expansion in terms of like the product area or service that we’re looking for?
George D. Schindler: Well, actually, one of the common areas and we did have a pretty strong new business in the quarter of 37% was new business. But you’re right, there’s a significant number of add-ons. A lot of that is clients looking to consolidate their partners for both quality and efficiency purposes. And so, it’s not necessarily focused on a specific function. It’s more about adjacencies to the work that we’re doing to expand that consolidate some of their partners again for both quality, which CGI is known for. And then also the efficiency purposes, which include us being able to as a bigger partner, with bigger volumes, be able to provide a better cost savings to the client.
Richard Tse: Okay. And just one last quick one for me, in terms of capital allocation, you’ve been fairly active on the buyback. Do you think a dividend is sort of entering the next year over the next 12 months as part of that capital allocation?
George D. Schindler: Yes, we look at that capital allocation at the Board meeting when we look at our NCIB and our use of cash. So, it continues to be a discussion. Right now, given what I just described about the outlook not just this current environment, but the wave of growth, particularly around AI and the opportunities in M&A. I don’t see that right now, but of course, we’ll have that discussion.
Steve Perron: Yes. Usually, we are renewing our NCIB program early Feb. So, we’ll come back to that obviously with the Board and discuss that at the Board meeting in February.
George D. Schindler: But, what I can say in the meantime is, we will be active in returning cash through the, returning cash to our shareholders through the stock buyback program.
Richard Tse: That’s great. Thank you.
George D. Schindler: Yes.
Operator: Your next question comes from Divya Goyal from Scotiabank. Please go ahead.
Divya Goyal: Good morning, everyone. George and Steve, if you could provide some color specifically on the geographic segments, we noted the big U.S. commercial and the western and southern Europe segment, saw a decline in revenues. If you could provide some directional guidance on how do you see some of these segments trending? I know last quarter, Canada was the weaker segment, how do you see some of these segments, progressing on a go-forward basis?
George D. Schindler: Yes, and thanks for the question, Divya and thanks for noting that, as we talked about Canada has returned back to growth in the quarter. On U.S. Commercial and State Government, maybe I’ll take that one first. Certainly, what we do see is that some of the growth that we would naturally have is masked by some of it moving on the managed services side to global delivery. So you saw, again, some growth there, strong growth in global delivery. So, we’re moving more of that U.S. work to global delivery. And in fact, we’re seeing a lot of interest, continued interest in global delivery. In fact, I was just in India last month with clients. I can tell you that the interest is palpable right now. In fact, our Q4, client visits to the India offices just the India offices alone this quarter, if we go back, and I didn’t go back a year ago, and of course, it’s higher, but I went all the way back to 2019, which is the last quarter prior to the pandemic.
That’s a good benchmark quarter for us, twice as many client visits to our India offices. So, a lot of movement towards global delivery, of course, that masks some of the segment growth. And then, we had strong IP growth, but we’re moving IP more to a software as a service. That’s up in the quarter, as Steve mentioned, and so that actually maximum growth. Having said that, I think we’ll still see some softness in SI&C, particularly in the financial services area, those furloughs I mentioned in the year, we’ll still head us this next quarter. But, as we move throughout the year, I think you’ll see the growth there in the U.S. commercial. Similar story a bit in western and southern Europe, maybe one caveat, the one day probably hit them a little harder in the quarter.
So, again, I think you’re going to see these are traditionally very strong, well-managed organizations with a good diverse portfolio of clients. So, I’m not very concerned about that.
Divya Goyal: That’s helpful. And maybe if I may ask a question on the M&A, I know it’s been an important strategic priority for CGI, but could you give some color on the M&A pipeline? And I know it’s a slightly different question, but how are you prioritizing M&A as compared to the $1 billion investment allocation in AI on the side as well?
George D. Schindler: Yes. Well, here’s how I look at that. We’re prioritizing them both. And they kind of come together where some of those M&A will provide us AI capabilities and skills. And so, that’s something that where they kind of converge. But, the billion is really over, a period of three years focus right now more on the training the partnerships. I just announced the partnership with Google, but, it’s the partnership with the alliances, and it’s our intellectual property. On the M&A side, it’s really about building out that scale through additional relationships with clients. So, they’re both prioritized. You saw the cash generation we had. We’ve got plenty of cash generation to invest in both as a priority elements in our go-forward plan.
