French IT consulting firm Capgemini has reported weak revenue growth in the first quarter of 2023 ended in March.
Capgemini has reported its revenue at 5.73 billion euros (6.35 billion USD) in the reporting period, which is 10.9 % above for the same period last year.
During the same quarter of 2022, the company had posted 21 % revenue growth over the year. For 2023, the company guided for 4-7 % revenue growth in constant currency, similar to the guidance shared by the Indian IT firm Infosys.
"The appetite for clients around all the transformation required to move to the digital and sustainable economy is still there. But they are delaying some of the decisions by several months, said CEO Aiman Ezzat during the earnings call.
He added that despite slower decision-making, the deal pipeline remains strong.
Capgemini recorded comparatively moderate growth of 6.1 % in the North American region at constant exchange rates. While the manufacturing and services sectors were particularly dynamic, the financial services and consumer goods sectors trailed, with growth rates lagging behind other regions.
The telecom, media, and technology sector experienced a slight contraction.
Ezzat added that growth in North America slowed due to the higher mix of financial services and TMT business in the region.
"It is true that some clients are more into cost-cutting compared to what we saw two quarters ago, which was what we anticipated. We see more consolidation and cost cutting, definitely in financial service, but even beyond, added Ezzat.
Deal bookings for the quarter were at 5867 million euros in the first quarter, up 6.5 % year-on-year at constant exchange rates against a particularly high comparison base, with 26 % growth in Q1 of 2022.
As of March 31, 2023, Capgemini's total headcount stood at 357000, up 5 % year-on-year.
The attrition rate was down 340 basis points over the year to 22.9 %.
