Core Insights - Accenture's fiscal Q2 2025 results showed strong performance with revenue and earnings per share exceeding Wall Street expectations, driven by robust demand for consulting and tech modernization services [3][6]. Financial Performance - Revenue increased from $15.8 billion in Q2 FY24 to $16.7 billion in Q2 FY25, marking a 6% year-over-year growth [2]. - Earnings per share rose from $2.63 to $2.82, reflecting a 7% increase [2]. - Free cash flow surged by 35%, from $2.0 billion to $2.7 billion [2]. Market Demand and Bookings - Accenture reported $1.4 billion in new bookings related to generative AI during the quarter, indicating a significant growth driver [3]. - New bookings totaled $20.9 billion, a decrease of 3% year-over-year but flat when adjusted for currency fluctuations [7]. Sector Performance - The financial services sector led growth with an 11% increase year-over-year, while health and public service revenue rose by 10% [4]. - The Western Hemisphere showed the strongest performance with an 11% increase, Europe grew by 8%, and Asia-Pacific saw a modest 1% growth [4]. Shareholder Returns - Accenture generated $3.6 billion in free cash flow in the first half of fiscal 2025, with $2.3 billion used for share repurchases and a 15% increase in dividend payouts totaling $1.9 billion [5]. Future Outlook - The company narrowed its full-year fiscal 2025 guidance, projecting earnings between $12.55 and $12.79 and revenue growth of 5% to 7% [7]. - Accenture's commitment of over $6 billion to acquisitions in fiscal 2024 is expected to enhance its tech capabilities and capitalize on the AI revolution [8].

Financial Data and Key Metrics Changes - Revenue for the quarter was $16.7 billion, reflecting an 8.5% increase in local currency and a 5% increase in U.S. dollars [7][17] - Operating margin was 13.5%, a decrease of 20 basis points compared to the adjusted operating margin from the previous year [15][20] - Diluted earnings per share (EPS) were $2.82, representing a 2% growth over the adjusted EPS from the same quarter last year [21] - Free cash flow for the quarter was $2.7 billion, with a cash balance of $8.5 billion at the end of the quarter [21][22] Business Line Data and Key Metrics Changes - Consulting revenues were $8.3 billion, up 3% in U.S. dollars and 6% in local currency [17] - Managed services revenue was $8.4 billion, up 8% in U.S. dollars and 11% in local currency, driven by double-digit growth in technology managed services [18] - New bookings totaled $20.9 billion, with consulting bookings at $10.5 billion and managed services bookings at $10.4 billion [16][91] Market Data and Key Metrics Changes - In the Americas, revenues grew 11% in local currency, led by banking and capital markets, industrial, health, and consumer goods retail [18] - EMEA saw 8% growth in local currency, driven by public service and life sciences [19] - Asia Pacific revenue grew 1% in local currency, with growth in insurance and utilities, but offset by declines in chemicals and natural resources [19] Company Strategy and Development Direction - The company is focused on reinvention through Gen AI, with significant investments in technology and training [8][24] - A transformative hospitality skilling program was launched in India to prepare disadvantaged youth for jobs in the hospitality sector [8] - The company aims to maintain a diversified portfolio across markets and industries to adapt to changing market conditions [12] Management's Comments on Operating Environment and Future Outlook - Management noted an elevated level of uncertainty in the global economic and geopolitical environment, but remains confident in the fundamentals of the industry [11] - The company expects revenue growth in the range of 5% to 7% in local currency for the full fiscal year 2025 [41] - Operating margin is expected to expand by 10 to 20 basis points for the fiscal year [42] Other Important Information - The company plans to invest $2 billion to $3 billion in acquisitions during the fiscal year [42] - The effective tax rate is expected to be in the range of 22.5% to 24.5% for the fiscal year [42] - The company has been recognized as one of the world's most ethical companies for the eighteenth consecutive year [8] Q&A Session Summary Question: Can you clarify the extent of clients pausing new initiatives? - Management indicated no overall change in client activity, with some discussions about accelerating projects [46][47] Question: What was the growth rate in U.S. Federal revenue? - Specific growth rates for U.S. Federal revenue were not provided, but management expressed confidence in their positioning for larger deals [48][49] Question: How is the margin outlook changing? - The decrease in gross margin was attributed to higher subcontractor costs, but operating margin is expected to expand for the year [55][56] Question: How are budgets set and conversations changing? - Management noted that there was no significant increase in budgets, with clients continuing to prioritize larger transformation projects [65][67] Question: Can you provide insights on the slowdown in recent weeks? - Management clarified that while there is significant uncertainty, they have not seen a slowdown in business activity [81][82]

Accenture (ACN) came out with quarterly earnings of $2.82 per share, missing the Zacks Consensus Estimate of $2.84 per share. This compares to earnings of $2.77 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -0.70%. A quarter ago, it was expected that this consulting company would post earnings of $3.38 per share when it actually produced earnings of $3.59, delivering a surprise of 6.21%.Over the last four quarters, the compa ...

Core Insights - Accenture reported strong revenue growth in Q2 FY25, with revenue of $16.66 billion, exceeding estimates of $16.62 billion, and a year-over-year increase of 5% [2][3] - Earnings per share (EPS) came in at $2.82, slightly above the expected $2.81, reflecting a 7.2% increase from $2.63 in Q2 FY24 [3][7] - The operating margin improved to 13.5%, up 0.5 percentage points from the previous year, despite facing foreign exchange headwinds [3][7] Financial Performance - Free cash flow increased significantly by 34.7% year over year to $2.68 billion, indicating strong cash generation capabilities [3][8] - New bookings for the quarter totaled $20.9 billion, a decrease of 3% year over year, with $1.4 billion attributed to generative artificial intelligence bookings [6][7] Business Overview - Accenture is a global leader in professional services, focusing on consulting, technology, and outsourcing, with over 800,000 employees [4] - The company's strategy emphasizes technology integration, sustainability, and strategic acquisitions, aiming to create 360-degree value for clients [4] Regional Performance - The Americas segment experienced a 9% increase in revenue in U.S. dollars, translating to an 11% rise in local currency, showcasing effective market strategies [5] Strategic Focus - The company has historically relied on strategic acquisitions for growth, with previous investments totaling $6.6 billion, although this quarter saw a decreased focus on new acquisitions [9] - A 15% increase in dividends to $1.48 per share reflects stable financial health and a commitment to shareholder value [9] Future Outlook - Accenture has narrowed its fiscal 2025 revenue growth guidance to 5% to 7% in local currency, indicating a focus on operational efficiencies and consistent growth [10] - Projected third-quarter revenue is expected to be between $16.9 billion and $17.5 billion, suggesting anticipated demand and steady client engagement [11]

Financial Data and Key Metrics Changes - Revenue for the quarter was $16.7 billion, reflecting an 8.5% increase in local currency and a 5% increase in U.S. dollars [17][14] - Operating margin was 13.5%, a decrease of 20 basis points compared to the adjusted operating margin from the previous year [20][15] - Diluted earnings per share (EPS) were $2.82, representing a 2% growth over the adjusted EPS from the same quarter last year [21][15] - Free cash flow for the quarter was $2.7 billion, with a cash balance of $8.5 billion at the end of the quarter [21][22] Business Line Data and Key Metrics Changes - Consulting revenues were $8.3 billion, up 3% in U.S. dollars and 6% in local currency [17] - Managed services revenue was $8.4 billion, reflecting an 8% increase in U.S. dollars and 11% in local currency, driven by double-digit growth in technology managed services [18][17] - New bookings totaled $20.9 billion, with consulting bookings at $10.5 billion and managed services bookings at $10.4 billion [16][15] Market Data and Key Metrics Changes - In the Americas, revenues grew 11% in local currency, led by banking and capital markets, industrial, health, and consumer goods retail [18] - EMEA revenues increased by 8% in local currency, driven by public service, life sciences, and consumer goods [19] - Asia Pacific revenue grew 1% in local currency, with growth in insurance and utilities, partially offset by declines in chemicals and natural resources [19] Company Strategy and Development Direction - The company continues to focus on large-scale transformations for clients, with a strong emphasis on Gen AI as a catalyst for reinvention [6][23] - Significant investments were made in strategic areas, including over $250 million across six strategic acquisitions [8] - The company aims to increase its data and AI workforce to approximately 80,000 by the end of FY 2026 [8] Management's Comments on Operating Environment and Future Outlook - Management noted an elevated level of uncertainty in the global economic and geopolitical environment, but remains confident in the fundamentals of the industry [11][12] - The company expects revenue growth in the range of 5% to 7% in local currency for the full fiscal year 2025 [39] - Operating margin is expected to expand by 10 to 20 basis points for the fiscal year [40] Other Important Information - The company has been recognized as one of the world's most ethical companies for the eighteenth consecutive year [8] - A transformative hospitality skilling program was launched in India in collaboration with Marriott International [8] Q&A Session Summary Question: Are clients hitting the pause button on new initiatives? - Management indicated that there has been no overall change in client activity, with some discussions focusing on accelerating initiatives [45][46] Question: What was the growth rate in U.S. Federal revenue? - Specific growth rates for U.S. Federal revenue were not provided, but management expressed confidence in the overall positioning of the business [47][48] Question: How is the margin outlook changing? - The decrease in gross margin was attributed to higher subcontractor costs and business optimization actions, with expectations for a slight expansion in operating margin for the year [54][55] Question: How are budgets being set in the current environment? - Management noted that there has not been a meaningful increase in budgets for services, with discretionary spending remaining constrained [64][66] Question: How is the company managing its workforce mix? - The company added over 2,000 employees in Q2 and continues to manage its supply and demand effectively, maintaining a utilization rate of 91% [92]

Financial Performance - Revenues for the second quarter of fiscal 2025 were $16.7 billion, representing a 5% increase in U.S. dollars and an 8.5% increase in local currency compared to the second quarter of fiscal 2024[73]. - Diluted earnings per share increased by 7% to $2.82, compared to $2.63 in the second quarter of fiscal 2024[73]. - Operating margin improved to 13.5%, up from 13.0% in the second quarter of fiscal 2024[73]. - Operating income for the second quarter of fiscal 2025 increased by $198 million, or 10%, compared to the same period in fiscal 2024, with an operating margin of 13.5%[101]. - For the six months ended February 28, 2025, operating income rose by $582 million, or 13%, with an operating margin of 15.1%[101]. - Interest income for the second quarter of fiscal 2025 was $76 million, an increase of $11 million, or 17%, compared to the second quarter of fiscal 2024[108]. - Interest expense for the second quarter of fiscal 2025 was $65 million, an increase of $54 million compared to the same period in fiscal 2024[109]. - The effective tax rate for the second quarter of fiscal 2025 was 20.4%, up from 18.4% in the same quarter of fiscal 2024[111]. Revenue Breakdown - Consulting revenues grew by 3% in U.S. dollars and 6% in local currency, driven by strong growth in the Americas and EMEA[75]. - Managed services revenues increased by 8% in U.S. dollars and 11% in local currency, supported by demand for application modernization and cloud enablement[76]. - Revenues in the Americas increased by 9% in Q2 fiscal 2025 compared to Q2 fiscal 2024, driven by growth in Insurance and Utilities[87]. - Revenues for Q2 fiscal 2025 increased to $16.659 billion, a 5% increase from $15.800 billion in Q2 fiscal 2024[85]. Bookings and Workforce - New bookings totaled $20.9 billion, reflecting a 3% decrease in U.S. dollars and flat growth in local currency[73]. - Total new bookings for Q2 fiscal 2025 were $20.9 billion, a decrease of 3% compared to $21.6 billion in Q2 fiscal 2024[82]. - The workforce increased to approximately 801,000, up from approximately 742,000 a year earlier, reflecting hiring to meet demand[78]. - For Q2 fiscal 2025, annualized attrition was 13%, consistent with Q2 fiscal 2024[79]. Expenses and Margins - Operating expenses for Q2 fiscal 2025 increased by $662 million, or 5%, totaling $14.415 billion[90]. - Cost of services for Q2 fiscal 2025 increased by $763 million, or 7%, and represented 70.1% of revenues[93]. - Gross margin for Q2 fiscal 2025 decreased to 29.9% from 30.9% in Q2 fiscal 2024[93]. - Sales and marketing expenses for Q2 fiscal 2025 increased by $46 million, or 3%, totaling $1.677 billion[95]. - General and administrative costs for Q2 fiscal 2025 decreased by $32 million, or 3%, totaling $1.053 billion[96]. Shareholder Returns - Cash returned to shareholders amounted to $2.4 billion, including $929 million in dividends and $1.4 billion in share repurchases[73]. - During the six months ended February 28, 2025, Accenture plc repurchased a total of 6,527,646 shares for $2,342 million, including 4,611,999 shares purchased in open-market transactions for $1,656 million[123]. - The company plans to continue utilizing a significant portion of cash generated from operations for share repurchases throughout fiscal 2025, with the number of shares repurchased depending on various market conditions[125]. Cash and Liquidity - As of February 28, 2025, cash and cash equivalents totaled $8.5 billion, up from $5.0 billion as of August 31, 2024[117]. - Net cash provided by operating activities for the six months ended February 28, 2025 was $3,876 million, an increase of $1,276 million from the prior year[117]. Corporate Governance and Risk - Accenture's management has evaluated the effectiveness of its disclosure controls and procedures, concluding they were effective at the reasonable assurance level as of the end of the reporting period[129]. - There have been no changes in internal control over financial reporting that materially affected the company during the second quarter of fiscal 2025[130]. - There were no material changes to market risk exposure during the six months ended February 28, 2025, as disclosed in the Annual Report for the year ended August 31, 2024[128]. - The company has not been required to make significant payments under indemnification arrangements with clients[127].

Financial Performance - New bookings for Q2 FY25 were $20.9 billion, a decrease of 3% in U.S. dollars and flat in local currency compared to Q2 FY24[8]. - Revenues for Q2 FY25 were $16.7 billion, an increase of 5% in U.S. dollars and 8.5% in local currency, at the top end of the guided range[10]. - Generative AI new bookings reached $1.4 billion, reflecting strong demand in this segment[3]. - Operating margin for Q2 FY25 was 13.5%, an increase of 50 basis points compared to the previous year[14]. - Diluted earnings per share for Q2 FY25 were $2.82, a 7% increase from $2.63 in Q2 FY24[18]. - Free cash flow for Q2 FY25 was $2.68 billion, up from $1.99 billion in Q2 FY24[19]. - The company expects full-year revenue growth to be between 5% and 7% in local currency[6]. - Operating margin guidance for FY25 is updated to 15.6% to 15.7%, reflecting a 10 to 20 basis points expansion over adjusted operating margin[6]. Shareholder Returns - Accenture repurchased 4.0 million shares for a total of $1.4 billion during Q2 FY25[23]. - Cash dividends per share increased to $1.48 for the three months ended February 28, 2025, up from $1.29 in the same period of 2024[35]. - The company paid cash dividends of $928,992 thousand during the three months ended February 28, 2025, compared to $812,578 thousand in the same period in 2024, representing an increase of approximately 14.3%[45]. Income and Expenses - Total operating expenses for the three months ended February 28, 2025, were $14,414,587, which is an increase from $13,753,087 in the same period of 2024[35]. - The cost of services represented 70.1% of revenues for the three months ended February 28, 2025, compared to 69.1% for the same period in 2024[35]. - Operating income for the three months ended February 28, 2025, was $2,244,714, which is 13.5% of revenues, compared to 13.0% for the same period in 2024[35]. - Total revenues for the three months ended February 28, 2025, were $16,659,301, representing a 5% increase compared to $15,799,514 for the same period in 2024[37]. - Operating income for the six months ended February 28, 2025, was $5,193,191, with a margin of 15.1%, compared to $4,611,314 and a margin of 14.4% in the prior year[39]. Net Income - Net income attributable to Accenture plc for the three months ended February 28, 2025, was $1,788,075, a 6.8% increase from $1,674,859 in the same period of 2024[35]. - Net income for the three months ended February 28, 2025, was $1,822,441, compared to $1,709,202 in the same period last year, resulting in an increase of $87,331[41]. - Net income for the three months ended February 28, 2025, was $1,822,441 thousand, compared to $1,709,202 thousand for the same period in 2024, reflecting an increase of about 6.6%[45]. Cash Flow and Assets - The total cash balance at February 28, 2025, was $8.5 billion, compared to $5.0 billion at August 31, 2024[20]. - Cash and cash equivalents rose to $8,490,438 thousand at the end of the period, up from $5,004,469 thousand, marking a significant increase of approximately 69.5%[45]. - The company reported net cash provided by operating activities of $2,853,400 thousand for the three months ended February 28, 2025, compared to $2,101,043 thousand for the same period in 2024, an increase of approximately 36%[45]. - Long-term debt increased significantly to $5,042,111 thousand from $78,628 thousand, indicating a strategic shift in financing[43]. - Total assets increased to $59,869,756 thousand as of February 28, 2025, up from $55,932,363 thousand on August 31, 2024, representing a growth of approximately 5.3%[43]. Strategic Insights - The company anticipates continued growth in client demand for its services and solutions, particularly in response to evolving technology trends[33]. - Accenture's profitability may be impacted by competitive pressures and the need to adapt to changes in the technological environment[33]. - Purchases of businesses and investments net of cash acquired amounted to $250,795 thousand for the three months ended February 28, 2025, compared to $2,121,455 thousand in the same period last year, indicating a strategic reduction in acquisition spending[45]. - The Asia Pacific region experienced a decrease in operating income for the three months ended February 28, 2025, with $365,036 compared to $434,158 in the prior year, a decline of $69,122[38]. - The effective tax rate for the three months ended February 28, 2025, was 20.4%, compared to 18.4% for the same period in 2024[41].

Group 1 - The article highlights a 'Strong Buy' rating on Accenture (NYSE: ACN) due to its strong capabilities in AI and cloud computing [1] - Accenture's stock price has faced pressure amid a broader sell-off in growth stocks, raising concerns among investors [1] - The investment strategy focuses on fundamental, bottom-up, long-term growth, targeting companies with strong growth potential and reasonable valuations [1] Group 2 - The analyst holds a beneficial long position in Accenture shares, indicating confidence in the company's future performance [2] - The article emphasizes that past performance does not guarantee future results, reflecting a cautious approach to investment recommendations [3]

Accenture plc (ACN) is set to report second-quarter fiscal 2025 results on March 20, before market open.See Zacks Earnings Calendar to stay ahead of market-making news.The Zacks Consensus Estimate for earnings is pegged at $2.84 per share, indicating 2.5% growth from the year-ago quarter’s reported level. The consensus estimate for revenues is $16.6 billion, indicating 4.9% year-over-year growth.Two consensus estimates for earnings per share in the second quarter of fiscal 2025 moved north in the past 60 da ...

Wall Street analysts expect Accenture (ACN) to post quarterly earnings of $2.84 per share in its upcoming report, which indicates a year-over-year increase of 2.5%. Revenues are expected to be $16.58 billion, up 4.9% from the year-ago quarter.Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted downward by 0.3% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.Prior to a company's earnings rel ...