• Revenue: $16.7 billion, 8.5% growth in local currency.
• Bookings: $20.9 billion, including 32 clients with bookings over $100 million.
• EPS: $2.82, reflecting 2% growth over adjusted EPS last year.
• Operating Margin: 13.5%, a decrease of 20 basis points from last year's adjusted margin.
• Free Cash Flow: $2.7 billion.
• Shareholder Returns: $2.4 billion returned through repurchases and dividends.
• Consulting Revenue: $8.3 billion, 6% growth in local currency.
• Managed Services Revenue: $8.4 billion, 11% growth in local currency.
• Geographic Revenue Growth: Americas 11%, EMEA 8%, Asia Pacific 1% in local currency.
• Gross Margin: 29.9% compared to 30.9% last year.
• Cash Balance: $8.5 billion as of February 28.
• Dividend: Quarterly cash dividend of $1.48 per share, a 15% increase over last year.

• Warning! GuruFocus has detected 4 Warning Sign with ACN.

Release Date: March 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Accenture PLC (NYSE:ACN) reported strong quarterly bookings of $20.9 billion, with 32 clients having bookings over $100 million.
• Revenue grew by 8.5% in local currency, reaching $16.7 billion, which was at the top end of their guided range.
• The company achieved significant growth in GenAI, with $1.4 billion in new bookings and approximately $600 million in revenue.
• Accenture PLC (NYSE:ACN) continues to invest in strategic areas, deploying over $250 million across six strategic acquisitions.
• The company increased its data and AI workforce to approximately 72,000, progressing towards its goal of 80,000 by the end of FY 2026.

Negative Points

• Operating margin contracted by 20 basis points compared to the adjusted operating margin last year.
• The federal business is facing challenges due to slowed procurement actions and contract reviews by the General Service Administration.
• There is an elevated level of uncertainty in the global economic and geopolitical environment, impacting business outlook.
• Gross margin for the quarter decreased to 29.9% from 30.9% in the same quarter last year.
• The company noted a competitive market environment, which affects pricing stability and contract profitability.

Q & A Highlights

Q: Can you clarify if there are any signs of clients pausing new initiatives outside the US? A: Angie Park, CFO, stated that there has been no change overall in client activity. Julie Sweet, CEO, added that while discussions are ongoing, particularly around cost acceleration, there are no pauses currently observed.

Q: What was the growth rate for US Federal revenue in the quarter, and what are the expectations for the second half of the year? A: Angie Park, CFO, explained that specific federal growth rates are not provided during the year. However, the guidance reflects current estimates and assumptions about potential impacts from federal and overall environment changes.

Q: How is the margin outlook affected by organic versus inorganic factors? A: Angie Park, CFO, noted that the decrease in gross margin is primarily due to contractor costs and business optimization actions. The operating margin is expected to expand by 10 to 20 basis points for the year, with a focus on pricing, contract delivery, and operational efficiency.

Q: How have client budget conversations evolved from January to March? A: Julie Sweet, CEO, mentioned that there was no significant increase in budgets for services as the year began. Conversations now focus on accelerating cost-cutting and growth initiatives, with discretionary spending remaining constrained.

Q: How is Accenture managing its workforce mix, particularly subcontractors versus employees? A: Angie Park, CFO, stated that the workforce mix can fluctuate based on client work. The company added over 2,000 people in Q2, maintaining a utilization rate of 91%, which is within their desired range.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.