Capgemini (CAP) Q2 2026 earnings summary

Executive summary

• H1 2026 revenues reached €12,082 million, up 8.8% year-over-year (11.3% at constant currency), driven by strong AI demand and recent acquisitions, notably WNS and Cloud4C.

• North America, UK & Ireland, and APAC led growth, with North America up 19.8% and UK/Ireland up 21.1% at constant currency.

• Bookings totaled €12.6 billion, with a book-to-bill ratio of 1.04, reflecting robust commercial momentum.

• Integration of WNS and Cloud4C and the launch of Intelligent Business Operations drove double-digit growth and expanded the opportunity pipeline to €13.3 billion.

• Fit-for-Growth restructuring initiatives increased costs but are expected to deliver margin improvements from H2 2026 onward.

Financial highlights

• Operating margin was 12.5% (up 10 bps year-over-year); gross margin was 26.1%, down 30 bps due to underutilization in France and Europe.

• Operating profit declined 10.1% to €878 million, mainly due to €628 million in restructuring charges.

• Net profit (Group share) fell 31.3% to €498 million; basic EPS at €2.96, normalized EPS at €5.29, both down year-over-year.

• Organic free cash flow was €37 million, consistent with seasonal patterns but down from €60 million in H1 2025.

• Net debt increased to €6.5 billion, reflecting bond issuance, refinancing, and acquisitions.

Outlook and guidance

• 2026 revenue growth target raised to 8.5%-9.0% at constant currency (previously 6.5%-8.5%), with inorganic contribution estimated at 5 points.

• Operating margin guidance confirmed at 13.6%-13.8%; organic free cash flow target reaffirmed at €1.8-1.9 billion, factoring in €200 million higher restructuring outflows.

• 2028 ambition: 3-year revenue CAGR of 5.5%-7.5%, operating profit margin before acquisition-related expenses at 12.1%-12.3%, and cumulative organic free cash flow above €6 billion for 2026-2028.