By Steve Goldstein
Capgemini reported results that came in ahead of guidance, but its stock is still down by more than 25% this year.
Capgemini shares have lost a quarter of their value this year, sending its price-to-earnings ratio down to single digits, as investors fear the impact of artificial intelligence on the technology consultant's business.
Those investors want to know what is the point of a company like the technology consultant if artificial intelligence can answer the same questions at a fraction of the cost.
But the CEO of Capgemini, Aiman Ezzat, insists that's not what its actual paying customers are saying.
&#34;I don't think clients are thinking this way about reduction, etcetera,&#34; he said after the company's fourth-quarter earnings presentation, according to a transcript from FactSet. &#34;Clients are looking at how critical it is for them to adopt AI and where it can have an impact.&#34;
For now, Capgemini's clients are not communicating any plans to stop or reduce activity with them. &#34;I think clients are really around, you know, where is the value creation? This is moving fast, how I can adopt it, where can I deploy it, how do I get benefit out of it whether it's savings or, you know, time to market, innovation, better customer relationship, etcetera. And this is really what the focus is a lot more, than predicting what they will do in three or four years,&#34; he said.
Capgemini (FR:CAP) shares rose 5% in Paris trade, though the stock is still down 26% this year.
The company said its &#34;normalized&#34; earnings per share grew 6% to EUR12.95 as revenue at constant currencies rose 3.4% to EUR22.47 billion. Analysts polled by the company expected normalized earnings of EUR12.17 on revenue of EUR22.3 billion.
It's forecasting revenue growth between 6.5% and 8.5% on an operating margin between 13.6% and 13.8%. UBS said expectations were for 7.6% growth and 13.6% margins.
Capgemini said its headcount was 423,400 at the end of last year after adding 82,300 offshore workers.
-Steve Goldstein
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02-13-26 0615ET

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Capgemini's CEO Aiman Ezzat reassured skeptical investors that AI is a catalyst for growth, not a threat. Despite a 26% drop in stock value this year, the company reported better-than-expected earnings, with normalized EPS rising 6% to EUR12.95 and revenue increasing 3.4% to EUR22.47 billion. Ezzat emphasized that clients are focused on AI adoption and value creation rather than reducing their reliance on Capgemini. The company forecasts revenue growth of 6.5% to 8.5% and an operating margin of 13.6% to 13.8%.

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Capgemini CEO has a message for skeptical investors: AI is a catalyst, not a killer