Capgemini reports €22.1bn revenue in 2024, sees AI as key growth driver

Capgemini, a global leader in digital transformation, reported €22.1 billion in revenue for 2024, marking a 1.9% decline year-over-year. While the company faced market challenges across key sectors, its operating margin stability at 13.3% and strong generative AI growth showcased its ability to navigate economic headwinds. The company experienced headwinds in the Manufacturing sector and the French market, yet Financial Services, Public Sector, and Consumer Goods & Retail displayed resilience.

Despite a tough macroeconomic environment, Capgemini saw a continued appetite for digital transformation services, particularly in Cloud, Data & AI solutions. Generative AI growth played a significant role in bookings, accounting for 5% of Q4 contract signings, demonstrating increasing client demand for AI-powered operational efficiency.

What Factors Contributed to Capgemini’s Revenue Decline?

The revenue decline impact was largely driven by weaker demand in Manufacturing, alongside client spending cuts in discretionary IT projects. North America, Capgemini’s largest market, saw a 4.1% revenue drop, reflecting a slowdown in Manufacturing and Public Sector engagements. France, which accounts for 20% of the company’s revenue, also experienced a 3.5% decline, particularly in the Manufacturing sector.

However, there were positive trends in Financial Services, Consumer Goods & Retail, and Public Sector engagements, where AI-driven automation and cloud adoption remained strong. The Rest of Europe market remained stable, while Asia-Pacific and Latin America showed resilience, with certain regions witnessing double-digit growth in specific verticals.

How Is Capgemini Leveraging AI to Drive Future Growth?

Capgemini’s focus on high-value technology services, particularly in AI, cloud, and data analytics, continues to shape its business transformation strategy. The company’s generative AI growth has played a critical role in securing new contracts, with AI-driven projects accounting for an increasing share of client investments.

The acquisition of Syniti further strengthened Capgemini’s data transformation capabilities, enabling AI-powered automation and advanced analytics solutions. This strategic move aligns with Capgemini’s broader push toward intelligent supply chain solutions, digital core modernization, and AI-driven customer experience enhancements.

The book-to-bill ratio of 1.08 for 2024, including 1.22 in Q4, highlights the company’s ability to secure future revenue streams, despite prolonged client decision cycles. AI-driven projects were particularly strong, accounting for nearly 5% of total Q4 bookings and approximately 4% for the full year.

What Is Capgemini’s Financial Standing and Cash Flow Position?

Capgemini’s operating margin stability at 13.3% reflects its strong cost-management strategy despite revenue pressures. The company generated organic free cash flow of €1.96 billion, aligning with expectations and allowing continued investments in acquisitions and share buybacks.

While net profit rose marginally by 0.5% to €1.67 billion, earnings per share increased by 1.2% to €9.82, reflecting a stable financial position. The company’s balance sheet remained strong, with cash reserves of €3.1 billion, although net debt increased slightly to €2.1 billion, largely due to capital deployment in acquisitions, dividends, and share buybacks.

A dividend of €3.40 per share has been proposed for 2024, representing 35% of net profit, in line with Capgemini’s historical payout ratio. The company’s commitment to capital returns remains intact, reinforcing shareholder confidence despite market challenges.

Which Regions and Sectors Drove Capgemini’s 2024 Performance?

Capgemini’s regional performance varied, with some markets showing resilience while others faced sharp slowdowns. North America revenues declined by 4.1%, with improved trends in Financial Services and Consumer Goods & Retail but continued weakness in Manufacturing and Public Sector engagements. The United Kingdom and Ireland region was more stable, posting a modest 1.0% decline, supported by a rebound in Financial Services and strong Energy & Utilities demand.

In France, revenue dropped 3.5%, impacted by slowing demand in Manufacturing, though Financial Services exhibited a clear recovery trend. The Rest of Europe remained flat, with growth in Public Sector and Energy & Utilities offsetting a Manufacturing slowdown. The Asia-Pacific and Latin America markets showed resilience, with 4.6% growth in Q4, driven by strong demand in Public Sector and Consumer Goods & Retail.

What Is Capgemini’s ESG Progress and Workforce Strategy?

Capgemini continued its corporate responsibility initiatives, achieving notable progress in environmental, social, and governance (ESG) goals. The company reduced Scope 1 & 2 emissions by 93% since 2019, with 98% of its electricity sourced from renewables in 2024. Capgemini remains on track to achieve 100% renewable energy use by 2025 as part of its net-zero commitment.

In workforce development, employee learning hours increased to 77 hours per person, reflecting the expansion of generative AI training programs. The company also made progress in gender diversity, with women representing 39.7% of its workforce—nearing its 40% target for 2025.

Capgemini’s headcount remained stable at 341,100 employees, with offshore workforce growth of 1.2%. The company’s continued investment in talent development and digital skills training positions it well for future technological advancements.

What Are Capgemini’s Expectations for 2025?

Looking ahead, Capgemini remains cautiously optimistic, setting a revenue growth target between -2.0% and +2.0% at constant exchange rates for 2025. The company expects operating margin stability between 13.3% and 13.5%, reinforcing its focus on cost efficiency and operational resilience.

The demand for AI-driven automation and cloud transformation is expected to be a key growth driver, with generative AI adoption likely to increase in 2025 bookings. However, uncertainties in global economic conditions, prolonged client decision cycles, and continued softness in Manufacturing may pose challenges to top-line growth.

Capgemini’s strong commercial pipeline, expanding AI capabilities, and strategic acquisitions will remain crucial as the company navigates a complex digital transformation landscape in 2025.