Accenture: Strong AI Demand Fuels Beat

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$6 billion to acquisitions in fiscal 2024 is expected to enhance its tech capabilities and capitalize on the AI revolution [8].