Market Overview - U.S. stocks traded lower, with the Nasdaq Composite falling more than 1% on Thursday, Dow down 0.64% to 45,824.16, NASDAQ down 1.19% to 22,229.54, and S&P 500 down 1% to 6,571.28 [1] - Energy shares increased by 0.5%, while health care stocks decreased by 1.4% [1] Company Earnings - Accenture (NYSE: ACN) reported better-than-expected fourth-quarter 2025 results, with earnings of $3.03 per share, exceeding the analyst consensus estimate of $2.96, and sales of $17.60 billion, slightly above the consensus estimate of $17.36 billion [2] Stock Movements - PepGen Inc. (NASDAQ: PEPG) shares surged 89% to $5.03 after announcing a $100 million public offering at $3.20 per share [8] - SciSparc Ltd. (NASDAQ: SPRC) shares increased by 101% to $7.71 following the announcement of a quantum computing-enabled 3D protein modeling initiative [8] - Plus Therapeutics, Inc. (NASDAQ: PSTV) shares rose 30% to $0.5264 after a national coverage agreement with UnitedHealthcare [8] - Stitch Fix, Inc. (NASDAQ: SFIX) shares fell 14% to $4.88 after releasing fourth-quarter results [8] - CarMax, Inc. (NYSE: KMX) shares dropped 23% to $43.86 after reporting second-quarter EPS and sales below estimates [8] - Cemtrex, Inc. (NASDAQ: CETX) shares declined 31% to $0.4359 after a 1-for-15 reverse stock split approval [8] Commodity Prices - Oil traded down 0.2% to $64.88, gold down 0.2% to $3,761.50, silver up 1.2% to $44.725, and copper down 1% to $4.7660 [5] European Market Performance - European shares were lower, with the eurozone's STOXX 600 down 0.52%, Spain's IBEX 35 down 0.18%, London's FTSE 100 down 0.24%, Germany's DAX 40 down 0.62%, and France's CAC 40 down 0.46% [6] Asian Market Performance - Asian markets closed mostly lower, with Japan's Nikkei 225 gaining 0.27%, while Hong Kong's Hang Seng declined 0.13%, China's Shanghai Composite fell 0.01%, and India's BSE Sensex fell 0.68% [7] Economic Indicators - U.S. wholesale inventories declined by 0.2% month-over-month to $898.8 billion, against market estimates of a 0.1% increase [11] - U.S. durable goods orders increased by 2.9% month-over-month to $312.1 billion, compared to a revised 2.7% decline in July [11] - The U.S. trade deficit in goods shrank by $17.3 billion month-over-month to $85.5 billion, compared to market estimates of $95.65 billion [11] - Initial jobless claims decreased by 14,000 to 218,000, against market estimates of 235,000 [11] - The U.S. economy grew at an annualized rate of 3.8% in the second quarter, up from 3.3% in the second estimate [11]

Core Insights - The introduction of a $100,000 H-1B application fee by President Trump poses significant challenges for consulting firms in talent acquisition, similar to those faced by tech companies [1][7] - Nearly 50% of H-1B applications are linked to professional, scientific, and technical services, highlighting the reliance of consulting firms on foreign skilled workers [2] - The H-1B program has been a crucial source of mid-level consultants with specialized skills, which are hard to find in the domestic market [4] Industry Impact - Consulting firms like Deloitte, EY, and Accenture are among the largest employers of H-1B visa holders, with Deloitte hiring 7,535 workers in the last three years, representing about 1% of its US workforce [5] - Accenture and EY have also significantly relied on H-1B visa holders, with 5,862 and 5,298 hires respectively, accounting for nearly 10% of their US headcounts [5] - The new application fee is expected to increase competition for talent and may lead to accelerated offshoring strategies among consulting firms [7] Strategic Responses - Consulting leaders express concern that the increased costs associated with H-1B visas will add friction to an already competitive talent market [4][6] - Major firms are anticipated to absorb some of the higher visa costs while adjusting their staffing models to maintain continuity [6] - Smaller consulting firms will need to enhance their ability to attract domestic talent, particularly for mid-level positions, to cope with the changes [6]

Core Insights - Accenture reported earnings per share (EPS) of $3.03, exceeding estimates of $2.98, reflecting a 9% increase in EPS [2][6] - Revenue grew by 7% to $17.6 billion, surpassing the estimated $17.4 billion, despite challenges in the consulting sector [2][6] - The company's strong performance is largely attributed to the growing demand for artificial intelligence (AI), with AI-related bookings accounting for $1.8 billion of total bookings of $21.3 billion [3][6] Financial Metrics - Accenture's price-to-earnings (P/E) ratio is approximately 18.78, indicating market valuation of its earnings [4] - The price-to-sales ratio stands at about 2.17, reflecting its market value relative to revenue [4] - The enterprise value to sales ratio is around 2.12, providing insight into its valuation compared to sales [4] Financial Health - The company has a low debt-to-equity ratio of 0.19, indicating conservative use of debt [5] - A current ratio of 1.46 suggests a solid ability to cover short-term liabilities with short-term assets [5] - Accenture's earnings yield of about 5.33% presents an attractive return on investment for investors [5]

Core Insights - The company exceeded earnings and revenue estimates for the fourth quarter, but shares are down 1.3% to $235.99, despite a rise in bookings for generative AI services [1] - A lackluster fiscal 2026 sales outlook was issued alongside a six-month, $865 million restructuring plan to meet rising AI demand [1] Stock Performance - Shares are struggling to recover from a four-year low of $238.59, with a year-to-date decline of 29.7% [2] - The $260 level has emerged as a resistance layer, while the 20-day moving average is exerting overhead pressure [2] - Analysts remain bullish, with 14 out of 23 firms rating the stock as "buy" or better, and a 12-month consensus target of $302.66, representing a 28.5% premium to current levels [2] Options Activity - Options traders are active, with 11,000 calls and 9,311 puts exchanged, which is triple the intraday average volume [3] - The most popular contract is the weekly 9/26 240-strike call, indicating new positions are being opened [3] - Accenture stock's Schaeffer's Volatility Scorecard (SVS) is at 87 out of 100, suggesting it has outperformed volatility expectations over the past year [3]

Core Insights - Accenture is consolidating its business around large-scale digital transformation projects to address challenges in generating returns from investments in generative AI technologies [3] - The company is focused on alleviating the AI talent shortage faced by enterprise customers, with nearly two-thirds of executives indicating that their generative AI plans are hindered by a lack of in-house skills [4] Business Strategy - Accenture's new model aims to simplify the selling and delivery of its offerings while embedding more AI and data into its services, with nearly 80% of large deals involving multiple services [3] - The company has invested $1 billion in a skill-building platform for enterprise customers and acquired learning platform Udacity to enhance its AI talent pool [5] Talent Development - Accenture has nearly doubled its staff of AI and data professionals to 77,000 in two years, with over 550,000 employees trained in generative AI fundamentals [6] - The firm is actively upskilling employees, as evidenced by a partnership with S&P Global to train 35,000 employees in AI [5] Financial Performance - During Q4 2025, Accenture reported significant growth in its AI business, with generative and agentic AI revenues tripling to $2.7 billion and bookings nearly doubling to $5.9 billion year over year [7] - The company's total revenue grew 7% to nearly $70 billion, with revenue split almost equally between consulting and managed services [7]

Financial Data and Key Metrics Changes - In fiscal year 2025, the company achieved a revenue growth of 7%, adding $5 billion in revenue, with over $80 billion in bookings [5][22] - Adjusted earnings per share (EPS) for Q4 was $3.03, reflecting a 9% growth compared to the previous year [15][21] - Free cash flow for Q4 was $3.8 billion, and for the full year, it was $10.9 billion, up 26% year over year [15][23] Business Line Data and Key Metrics Changes - Consulting revenues for Q4 were $8.8 billion, up 6% in U.S. dollars and 3% in local currency [17] - Managed services revenues for Q4 were also $8.8 billion, reflecting an 8% increase in U.S. dollars and 6% in local currency [18][23] - The capital projects business grew 49% year on year, reaching $1.2 billion [9] Market Data and Key Metrics Changes - In the Americas, revenue grew 5% in local currency, with significant contributions from banking and capital markets [18] - EMEA delivered 3% growth in local currency, driven by insurance and life sciences [18] - Asia Pacific revenues grew 6% in local currency, led by banking and capital markets [19] Company Strategy and Development Direction - The company aims to be the number one partner for the tech ecosystem, with 60% of revenue coming from partnerships with top technology companies [7] - A significant investment of $3 billion in Gen AI is expected to drive future growth, with revenue from advanced AI reaching $2.7 billion in FY25 [8][9] - The company is focusing on a three-pronged talent strategy to upskill its workforce and enhance operational efficiency [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for FY26, citing strong bookings and a solid pipeline for large transformation deals [46] - The overall market conditions have not shown significant changes, and the company remains focused on delivering results [25][26] - The management highlighted the importance of AI in driving growth and productivity, emphasizing that AI is seen as expansionary rather than deflationary [48][49] Other Important Information - The company initiated a business optimization program with an expected total cost of approximately $865 million, aimed at talent rotation and divestiture of non-aligned acquisitions [16] - The company plans to return at least $9.3 billion to shareholders through dividends and share repurchases in FY26, reflecting a 12% increase from FY25 [43] Q&A Session Summary Question: Visibility on revenue growth and discretionary spending - Management indicated strong demand for large transformation deals and a solid backlog, with guidance for FY26 reflecting a range of 2% to 5% growth [46] Question: Thoughts on AI-driven productivity and potential deflationary effects - Management does not see AI as deflationary but rather as expansionary, with savings being reinvested into new priorities [48][49] Question: Balance between Gen AI and managed services - Both consulting and managed services are expected to grow in the low to mid-single-digit range, with managed services becoming increasingly strategic [54][56] Question: Details on CapEx investments - The company expects about $1 billion in CapEx for FY26, primarily for expanding real estate and leasehold improvements [63] Question: Client behavior in using Gen AI - Many clients initially attempted to implement Gen AI independently but later sought assistance for scaling, highlighting the need for change management and process reinvention [78] Question: Expected savings from the business optimization program - The company anticipates savings of over $1 billion from the optimization program, which will be reinvested in the business and workforce [81]

Financial Data and Key Metrics Changes - In fiscal year 2025, the company achieved a revenue growth of 7%, adding $5 billion in revenue, with over $80 billion in bookings [6][7] - Adjusted earnings per share (EPS) for Q4 was $3.03, reflecting a 9% growth compared to the previous year [16][22] - Free cash flow for Q4 was $3.8 billion, and for the full year, it was $10.9 billion, up 26% year over year [16][24] Business Line Data and Key Metrics Changes - Consulting revenues for Q4 were $8.8 billion, up 6% in U.S. dollars and 3% in local currency [18] - Managed services revenues for Q4 were also $8.8 billion, reflecting an 8% increase in U.S. dollars and 6% in local currency [19][24] - The capital projects business grew 49% year on year, reaching $1.2 billion [10] Market Data and Key Metrics Changes - In the Americas, revenue grew 5% in local currency, with significant contributions from banking and capital markets [19] - EMEA delivered 3% growth in local currency, driven by insurance and life sciences [19] - Asia Pacific revenues grew 6% in local currency, led by banking and capital markets [20] Company Strategy and Development Direction - The company aims to be the number one partner for the tech ecosystem, with 60% of revenue coming from partnerships with top technology companies [8] - A significant investment of $3 billion in Gen AI is expected to drive future growth, with revenue from advanced AI reaching $2.7 billion in FY25 [9][10] - The company is focusing on reinvention services, integrating all capabilities into a single unit to enhance service delivery [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for FY26, citing strong bookings and a solid pipeline for large transformation deals [47] - The overall market conditions remain stable, with no significant changes anticipated [26] - The company expects revenue growth in FY26 to be in the range of 2% to 5% in local currency, with an estimated 1% to 1.5% impact from federal business [41][42] Other Important Information - The company initiated a business optimization program with a total expected charge of approximately $865 million, aimed at talent rotation and divestiture of non-strategic acquisitions [17] - The board declared a quarterly cash dividend of $1.63 per share, a 10% increase over the previous year [44] Q&A Session Summary Question: Visibility on revenue growth and discretionary spending - Management indicated strong demand for large transformation deals and a solid backlog, with guidance reflecting a range of discretionary spending scenarios [46][47] Question: AI-driven productivity and potential deflationary effects - Management does not view AI as deflationary but rather expansionary, with efficiency gains being reinvested into new priorities [48][49] Question: Balance between Gen AI and managed services - Both consulting and managed services are expected to grow in the low to mid-single-digit range, with managed services becoming increasingly strategic [54][55] Question: CapEx investments and their allocation - The company expects about $1 billion in CapEx, primarily for expanding real estate and leasehold improvements [63][64] Question: Client behavior regarding Gen AI and agentic solutions - Many clients initially attempted to implement Gen AI independently but later sought assistance for scaling their efforts [82][83] Question: Expected savings from the business optimization program - The company anticipates over $1 billion in savings from the optimization program, which will be reinvested in the business and talent [85]

Financial Data and Key Metrics Changes - In fiscal year 2025, the company achieved a revenue growth of 7%, adding $5 billion in revenue, with over $80 billion in bookings [6][24] - Adjusted earnings per share (EPS) for Q4 was $3.03, reflecting a 9% growth compared to the previous year [18][23] - Free cash flow for Q4 was $3.8 billion, with a total of $10.9 billion for the fiscal year, marking a 26% year-over-year increase [18][25] Business Line Data and Key Metrics Changes - Consulting revenues for the year were $35.1 billion, up 6% in U.S. dollars and 5% in local currency, while managed services revenues reached $34.6 billion, up 9% in both U.S. dollars and local currency [25] - The capital projects business grew 49% year-over-year, reaching $1.2 billion, largely driven by organic growth [11] Market Data and Key Metrics Changes - Revenue growth in the Americas was 5% in local currency, with significant contributions from banking and capital markets, while EMEA and Asia Pacific saw growth rates of 3% and 6% respectively [21][22] - The company added 37 clients with quarterly bookings greater than $100 million in Q4, totaling a record of 129 such bookings for the year [10] Company Strategy and Development Direction - The company aims to be the number one partner for the tech ecosystem, with 60% of its revenue derived from partnerships with top technology companies, which grew 9% in FY 2025 [9] - A significant focus is placed on advanced AI, with a $3 billion multi-year investment leading to a tripling of revenue from Gen AI to $2.7 billion [10][11] - The company is implementing a refreshed talent strategy to upskill its workforce, with over 550,000 employees trained in Gen AI fundamentals [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for FY 2026, citing strong bookings and a solid pipeline for large transformation deals [46] - The company anticipates revenue growth of 2%-5% in local currency for FY 2026, with an estimated 1%-1.5% impact from its federal business [41][42] Other Important Information - The company initiated a business optimization program with a total expected cost of approximately $865 million, aimed at talent rotation and divestiture of non-strategic acquisitions [19] - The board declared a quarterly cash dividend of $1.63 per share, a 10% increase over the previous year, and approved an additional $5 billion for share repurchases [43] Q&A Session Summary Question: Visibility on revenue growth and discretionary spending - Management indicated strong demand for large transformation deals and a solid backlog, with guidance reflecting a range of discretionary spending scenarios [45][46] Question: Thoughts on AI-driven productivity and potential deflationary effects - Management does not view AI as deflationary but rather as expansionary, with efficiency gains being reinvested into new priorities [47][48] Question: Balance between Gen AI and managed services - Management sees both consulting and managed services growing in the low to mid-single-digit range, emphasizing the strategic importance of managed services [53][54] Question: Details on CapEx investments - The company expects about $1 billion in CapEx, primarily for expanding real estate and leasehold improvements [61][62] Question: Client behavior regarding Gen AI adoption - Many clients initially attempted to implement Gen AI independently but later sought assistance for scaling, highlighting the need for change management and process reinvention [80][81] Question: Expected savings from the business optimization program - The company anticipates over $1 billion in savings from the optimization program, which will be reinvested in the business and workforce [83]

Core Viewpoint - Accenture's stock declined following the release of its fourth-quarter 2025 results, despite exceeding earnings and sales expectations [1][5]. Financial Performance - Quarterly earnings were reported at $3.03 per share, surpassing the analyst consensus estimate of $2.96 [1]. - Sales reached $17.60 billion, slightly above the analyst consensus estimate of $17.36 billion [1]. - Sales increased by 7% in U.S. dollars and 4.5% in local currency [2]. - Consulting revenues were $8.77 billion, a 6% increase in U.S. dollars and 3% in local currency [2]. - Managed Services revenues were $8.82 billion, an 8% increase in U.S. dollars and 6% in local currency [2]. - Products revenues reached $5.38 billion, up 9% in U.S. dollars and 5% in local currency [3]. - Health & Public Service revenues decreased by 1% in U.S. dollars and 3% in local currency to $3.56 billion [3]. - Financial Services revenue was $3.32 billion, up 15% in U.S. dollars and 12% in local currency [3]. - Resources revenue was $2.39 billion, up 8% in U.S. dollars and 5% in local currency [3]. - Communications, Media & Technology revenue was $2.95 billion, up 7% in U.S. dollars and 5% in local currency [3]. New Bookings and Margins - New bookings for the quarter totaled $21.31 billion, a 6% increase in U.S. dollars and 3% in local currency [4]. - Generative AI new bookings reached $1.8 billion in the quarter [4]. - Operating margin was reported at 11.6%, a decrease of 270 basis points, while adjusted operating margin increased by 10 basis points to 15.1% [4]. Cash Flow and Dividends - The company held $11.5 billion in cash and equivalents as of August 31 and generated $3.81 in free cash flow during the quarter [5]. - Accenture increased its quarterly dividend by 10% to $1.63 per share, payable on November 14, 2025 [6]. Outlook - For fiscal 2026, Accenture projected sales between $71.07 billion and $73.16 billion, exceeding the $69.43 billion consensus estimate [7]. - Expected GAAP EPS for fiscal 2026 is between $13.19 and $13.57, compared to the $12.88 analyst consensus [7]. - The company anticipates fiscal adjusted EPS of $13.52 to $13.90 [7]. - First-quarter sales are projected to be between $18.10 billion and $18.75 billion, against an $18.451 billion analyst estimate [7].

Financial Data and Key Metrics Changes - In fiscal year 2025, the company achieved a revenue growth of 7%, adding $5 billion in revenue, with over $80 billion in bookings [5][23] - Adjusted earnings per share (EPS) for Q4 was $3.03, reflecting a 9% growth compared to the previous year [15][24] - Free cash flow for the quarter was $3.8 billion, and for the full year, it was $10.9 billion, up 26% year over year [22][24] Business Line Data and Key Metrics Changes - Consulting revenues for Q4 were $8.8 billion, up 6% in U.S. dollars and 3% in local currency [19] - Managed services revenues for Q4 were also $8.8 billion, reflecting an 8% increase in U.S. dollars and 6% in local currency [20] - The capital projects business grew 49% year on year, reaching $1.2 billion [10] Market Data and Key Metrics Changes - Revenue growth in the Americas was 5% in local currency, driven by banking and capital markets, while EMEA saw 3% growth led by insurance and life sciences [20] - Asia Pacific revenues grew 6% in local currency, with significant contributions from banking and capital markets [21] Company Strategy and Development Direction - The company aims to be the number one partner for the tech ecosystem, with 60% of revenue coming from partnerships with top technology companies [7] - A significant investment of $3 billion in Gen AI is expected to drive future growth, with revenue from advanced AI reaching $2.7 billion in FY25 [9][10] - The company is focusing on reinvention services to streamline operations and enhance service delivery [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for FY26, citing strong bookings and a solid pipeline for large transformation deals [44] - The company anticipates revenue growth of 2% to 5% in FY26, with an estimated 1% to 1.5% impact from federal business [39][40] - Management highlighted the importance of AI in driving growth and productivity, emphasizing that AI is seen as expansionary rather than deflationary [46][47] Other Important Information - The company initiated a business optimization program with an expected total charge of approximately $865 million, aimed at talent rotation and divestiture of non-strategic acquisitions [18] - The board declared a quarterly cash dividend of $1.63 per share, a 10% increase over the previous year [41] Q&A Session Summary Question: Visibility on revenue growth and discretionary spending - Management noted strong bookings of $80.6 billion in FY25 and a solid pipeline for large transformation deals, with discretionary spending assumptions allowing for potential deterioration [44] Question: Thoughts on AI-driven productivity and potential deflationary effects - Management does not see AI as deflationary but rather as expansionary, with savings being reinvested into new priorities [46][47] Question: Balance between Gen AI and managed services - Both consulting and managed services are expected to grow in the low to mid-single-digit range in FY26, with managed services becoming increasingly strategic [52][54] Question: Details on CapEx investments - The company expects about $1 billion in CapEx for FY26, primarily for expanding real estate and leasehold improvements [57] Question: Client behavior in seeking Gen AI solutions - Many clients initially attempted to implement Gen AI independently but later sought assistance for scaling, highlighting the need for change management and process reinvention [71]